Abstract
Regional value chains (RVCs) and South–South trade are increasingly considered key features of 21st-century globalisation. This article investigates how RVCs are shaped by the interaction of private and public governance. It evaluates how this interaction unfolded in Southern Africa’s apparel RVCs, exploring trade, investment and labour regimes across three levels of analysis: national, regional, and global. The paper draws on trade data, secondary literature, and interviews with suppliers and institutions in Eswatini and Lesotho (the largest exporters to the region), and lead firms in South Africa (the largest regional importer). The findings underline the critical role of public governance in shaping retailers’ and suppliers’ participation in RVCs through: (i) regional ‘trade regimes’ protecting regional exporters from global competitors, and recent shifts in global trade regimes; (ii) national and regional ‘investment regimes’ facilitating investment flows from South Africa to Lesotho and Eswatini, and the more recent shift of US-oriented suppliers towards regional markets; and (iii) ‘labour regimes’, including lower wages, less comprehensive labour legislation and weaker trade unions in Lesotho and Eswatini compared to South Africa. The article concludes by considering the policy implications of the interaction of private and public governance for existing and future RVCs in Sub-Saharan Africa.
Highlights
Recent studies show that South–South trade exceeds North– South trade, and that intra-regional commerce accounts for a large share of the global South’s improved trade performance (Horner & Nadvi, 2018)
What is less well understood is what factors determine the dynamics of Regional value chains (RVCs)
Traditional international business and economic geography scholarships have historically focused on the centrality of lead firms who exercise private governance to shape global and regional value chain linkages
Summary
Recent studies show that South–South trade exceeds North– South trade, and that intra-regional commerce accounts for a large share of the global South’s improved trade performance (Horner & Nadvi, 2018). In the context of the regional apparel value chain in Southern Africa, Staritz (2011, 85) argued that territorial proximity and lower labour costs in Lesotho and Eswatini played a role in motivating South African manufacturers to relocate production to these neighbouring countries.
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