Figure 5 Theoretical Framework for GVC Source: (World Trade Organisation, 2017)
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CHAPTER 3 METHODOLOGY..................22
3.1 METHODOLOGY ....................................... 22
3.1.1 GTAP_VA Model ..................................... 23
3.2 RESEARCH DESIGN ............................ 23
CHAPTER 4 RESULTS AND DISCUSSION..................30
4.1 BASELINE SIMULATION RESULTS .......................................... 32
4.1.1 Domestic and Foreign Content of Bilateral Exports by Sector ..................................... 32
4.1.2 Bilateral direct/indirect domestic value added by originating sector ...................................... 34
CHAPTER 5 CONCLUSION...................50
5.1 CONCLUSION AND RECOMMENDATIONS....................... 50
CHAPTER 4 RESULTS AND DISCUSSION
4.1 Baseline Simulation Results
According to Hertel et al. (2001) the baseline scenario reflects the economic changes in the absence of any policy change and should closely reflect the expected changes that should occur. To obtain the value-added decomposition, the simulation computed the local and global inverse Leontief matrices8 and the results for the indicators were as follows:
4.1.1 Domestic and Foreign Content of Bilateral Exports by Sector
This indicator is represented by the coefficient VADECOMP9 which is defined in terms of the trading sector, exporter, importer and origin of the DVA, FVA and DDC.
Table 4 Domestic and Foreign Content of Bilateral Exports in ZWE’s sectoral Exports to SADC and China (VADECOMP, US$ Millions).
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CHAPTER 5 CONCLUSION
5.1 Conclusion and Recommendations
Trade liberalisation is an important phenomenon that is expected to benefit the countries involved in the trade agreement. Moreover, technology transfer is meant to improve productivity and the economic development of a nation. With the concern that Zimbabwe’s economy continues to face challenges in its agriculture and industrial sectors even though it is involved in various trade agreements and Aid has been received to try and increase productivity, this study proposed to develop and integrate Zimbabwe’s Agriculture and Food Value Chain into Regional and Global Value Chains. As Zimbabwe is part of the SADC and involved in trade agreements with some of the country members and as it faces an opportunity to partner with China under the China-Africa Cooperation, the research narrowed the aggregation to include Zimbabwe, SADC regional members, China and ROW. The study made use of a novel GTAP-VA methodology for GVC analysis with the objective of improving Zimbabwe’s participation in the GVC and to diversify and increase exports through a bilateral FTA and output augmenting technical change on all Agriculture and Food sectors. To achieve that, three scenarios were proposed; baseline scenario for analysing Zimbabwe’s GVC before any policy; bilateral FTA between Zimbabwe and SADC