Governing Competition Along Global Value Chains: The Case of Biodiesel Produced in Argentina and Consumed in the European Union

STARICCO, JUAN IGNACIO

Virtual

Conferencia; 33rd Annual SASE Meeting; 2021

Society for the Advancement of Socio-Economics

Wallerstein insightfully highlighted that inequality between central and peripheral productive processes in the capitalist world-system depends on economic actors and political entities? capacity to successfully limit competition. Dynamic valorization and accumulation of capital takes place under (quasi) monopolistic conditions, while markets in which competition is fierce, instead, tend to squeeze profits and limit the prospects for valorization and accumulation. Competition, in this way, constitutes an arena of struggle in which producers, buyers and political authorities take part actively, attempting to influence its regulation in their favor. While Wallerstein compared alternative production processes or global value chains (GVC), these insights are also relevant when we examine the dynamics established within a single GVC, as conditions of free or monopolistic competition have important consequences for the relations between actors and their capacity to produce and appropriate value along the chain.In this paper, I propose to empirically analyze the struggle around the regulation of competition that takes place within a GVC. To do so, I will build on a relatively recent strand in the GVC literature that has sought to more systematically and explicitly theorize and account for the notion of power in the analyses of GVC dynamics and governance. Such conceptualization of power, when combined with the understanding of competition developed by world-systems theory, will provide analytically useful to account for, on the one hand, the power factors that allow some actors (and not others) to successfully intervene in the regulation of competition and, on the other hand, to identify the ways in which different conditions of competition may enhance or devaluate the power of key actors in a GVC.My empirical analysis is based on the case of the biodiesel GCV between Argentina and the European Union. This is an interesting case for three reasons: in the first place, because it connects two geopolitical entities that, in world-systems theory terms, occupy unequal structural positions: core and periphery. This contrast is, a priory, potentially relevant for the analysis of power relations. In the second place, the case of biodiesel is interesting for the literature of GVC because this commodity, as an industrialized product, is usually portrayed as a successful example of industrial upgrading in a peripheric country that is heavily specialized in soy production. The analysis of this concrete industry, hence, will shed light on the way in which power relations impact on the creation and appropriation of value that stems from such processes of upgrading. In the third place, the struggle around the regulation of competition in the chosen GVC involves an important variety of actors: soy producers, crushers, biodiesel producers, business associations, national states, supranational political entities and private multi-stakeholder initiatives. This means that the proposed analysis will go beyond the mere interactions between firms, accounting for the complex constellation of actors, forms of power and types of regulation that constitute this GVC?s governance.