The rise of global value chains (GVCs)is one of the most important transformation in global tradeand investment occurred in the last decades. Onceconcentrated among a few large economies, global flows ofgoods, services, and capital now reach an ever larger numberof economies worldwide. Falling transport costs due toimportant innovations such as containerization, lower tradecosts achieved both through a general reduction in tariffsworldwide and by the proliferation of trade and investmentagreements, the Information and Communication Technologies(ICT) revolution, and trends in global business tooutsource, non-core business functions paired with a drivetowards cutting costs on goods produced for export, have ledto, second unbundling of globalization in the 1990s and2000s (Baldwin and Lopez-Gonzalez 2015). Nepal’s NationalTrade Integration Strategy 2015 (NTIS 2015) was developedwith the objective of enhancing the contribution of thetrade sector to growth and to overcome the constraints andchallenges associated with trade development and exportpromotion. This note explores some stylized facts aboutNepal’s integration in GVCs and identifies policyrecommendations in cross-cutting areas that relate to mostof the export sectors prioritized by the NTIS 2015. Theserecommendations are not meant to be specific to individualvalue chains or products and are based on the challengesidentified through data analysis and interviews with firmsin key export sectors and based on good practices observedelsewhere. The report is structured in three sections besidethe introduction. The second section presents five stylizedfacts about Nepal’s exports that are related to GVCparticipation. The third section proposes some policyrecommendations to address the issues highlighted in theanalysis. The last section concludes.
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