Negotiated preferences and their evolution over time: Are the explicit trade objectives of the Chile-China and Peru-China FTAs achieved?
Download
Abstract
Empirical analyses of preferential agreements have mostly focused on short-term/static changes, examining trade patterns and flows. However, empirical studies evaluating the baskets of products traded between contracting partners and
the evolution of preferential trade are scarcer.
Bearing in mind the importance of China for Latin America in the present century and the current discussion on the reorientation of trade, an empirical and comparative analysis is on the first Free Trade Agreements (FTAs) with the Asian power on the region.
Considering the explicit trade objectives of Chile and Peru,
the descriptive statistical analysis provides an approach to the evolution of liberalised trade with different degrees of protection, in accordance with the schedule of tariff reduction and examining its composition in terms of technological intensity.
The study is organised as follows: Section 2 discusses
the literature evaluating Preferential Agreements (PAs) and
empirical studies on the relationship with China; Section 3
outlines the methodological design; Section 4 presents the
structured bilateral comparison (market access, trade flows and diversification); Section 5 outlines the similarities and differences between the cases analysed, and Section 6 presents
the main conclusions.
As a general result, market access was improved and an expansion of bilateral trade was assessed, but without significant diversification. The study provides new evidence to argue that the existing pre-agreement pattern of trade was reinforced, with trade being mainly in primary products or natural resource-based manufactures for manufactures of
all categories of technological intensity. This results are in
line with the literature discussing deindustrialisaton and the extractivist/unsustainable growth pattern.
Keywords:
EN , Preferential agreements (PAs) , tariff relief , preferential trade , technology intensity clasification , pattern of tradeReferences
Aghion, P., Antràs, P., & Helpman, E. (2007). Negotiating free trade. Journal of International Economics, 73(1), 1-30. https://doi.org/10.1016/j.jinteco.2006.12.003
Baldwin, R. (2016). The World Trade Organization and the future of multilateralism. The Journal of Economic Perspectives, 30(1), 95–115. http://dx.doi.org/10.1257/jep.30.L95
Baldwin, R., & Jaimovich, D. (2012). Are Free Trade Agreements contagious? Journal of International Economics, 88(1), 1-16. https://doi.org/10.1016/j.jinteco.2012.03.009
Baldwin, R., & Seghezza, E. (2010). Are trade blocs building or stumbling blocs? Journal of Economic Integration, 25(2), 276–297. https://www.jstor.org/stable/23000977
Bernard, A., J.B. Jensen, S. Redding y P. Schott (2007). “Firms in International Trade”. Journal of Economic Perspectives 21(3): 105–30.
Bértola, L., & Ocampo, J. A. (2022). La economía latinoamericana durante las primeras décadas del siglo XXI. El Trimestre Económico, 89(353), 39–71. https://doi.org/10.20430/ete.v89i353.1425
Bhagwati, J. N. (1991). The World Trading System at Risk. Princeton University Press. http://www.jstor.org/stable/j.ctt7tmjp
Bhagwati, J. N. (2011). Termites in the trading system
how preferential agreements undermine free trade. Oxford University Press. https://doi.org/10.1093/acprof:oso/9780195331653.001.0001
Dosi, G., Riccio, F., & Virgillito, M. E. (2021). Varieties of
deindustrialization and patterns of diversification: Why microchips are not potato chips. Structural Change and Economic Dynamics, 57, 182-202. https://doi.org/10.1016/j.strueco.2021.01.009
Dosi, G., Riccio, F., & Virgillito, M. E. (2022). Specialize or diversify? And in What? Trade composition, quality of specialization, and persistent growth. Industrial and Corporate Change, 31(2), 301-337. https://doi.org/10.1093/icc/dtac008
Dramani, J. B., Duodu, E., Tetteh, B., Ntsiful, E., & Frimpong, P. B. (2025). Trade Policy Uncertainty, Trade, and Economic Growth in Africa: What Can the African Continental Free Trade Area (AfCFTA) Offer The International Trade Journal, 1-26. https://doi.org/10.1080/08853908.2025.2538861
Dür, A., Baccini, L., & Elsig, M. (2014). The design of international trade agreements: Introducing a new dataset. The Review of International Organizations, 9(3), 353–375. https://doi.org/10.1007/s11558-013-9179-8
Estevadeordal, A., Freund, C., & Ornelas, E. (2008). Does regionalism affect trade liberalization toward nonmembers? The Quarterly Journal of Economics, 123(4), 1531–1575. https://www.jstor.org/stable/40506216
Fairlie Reinoso, A. (2010). Relaciones económicas Perú-China. Revista del Centro Andino de Estudios Internacionales, pp. 11–35.
Fazio Vengoa, H. (1996). Chile: Modelo de desarrollo e inserción internacional. Historia Crítica, 13, 68-89. https://doi.org/10.7440/histcrit13.1996.08
Ferner, A. (1979). The dominant class and industrial development in Peru. The Journal of Development Studies, 15(4), 268-288. https://doi.org/10.1080/00220387908421733
Gachúz, J. C. (2012). Chile’s Economic and Political Relationship with China. Journal of Current Chinese Affairs, 41(1), 133-154. https://doi.org/10.1177/186810261204100105
Gómez-Mera, L., & Barrett, B. (2012). The Political Economy of Preferential Trade Agreements: Latin America and Beyond. Latin American Politics and Society, 54(1), 181-196. https://doi.org/10.1111/j.1548-2456.2012.00147.x
Gonzalez-Vicente, R. (2012). The political economy of Sino-Peruvian relations: A new dependency? Journal of Current Chinese Affairs, 41(1), 97–131. https://doi.org/10.1177/186810261204100104
Gudynas, E. (2023). The sticky myth of economic growth and the critique of development. En B. Bull & M. Aguilar-Støen (Eds.), Handbook on international development and the environment (pp. 2–26). Edward Elgar Publishing.
Hachette, D. (2000). La reforma comercial. In F. Larraíın and R. Vergara, editors, La Transformación Económica de Chile, pages 295–339. Centro de Estudios Públicos, Santiago de Chile
Hausmann, R., Hwang, J., & Rodrik, D. (2007). What you export matters. Journal of Economic Growth, 12(1), 1-25. https://doi.org/10.1007/s10887006-9009-4
Heine, J. (2016). The Chile-China Paradox: Burgeoning Trade,
Little Investment. Asian Perspective, 40(4), 653-673. https://
doi.org/10.1353/apr.2016.0029
International Trade Centre (ITC). (2023). Trade Map. Recuperado de https://www.trademap.org/
Lake, J., & Yildiz, H. M. (2016). On the different geographic characteristics of Free Trade Agreements and Customs Unions. Journal of International Economics, 103, 213- 233. https://doi.org/10.1016/j.jinteco.2016.09.003
Lall, S. (2000). The technological structure and performance
of developing country manufactured exports, 1985–98.
Oxford Development Studies, 28(3), 337–369. https://doi.org/10.1080/713688318
Limão, N. (2007). Are preferential trade agreements with non-trade objectives a stumbling block for multilateral liberalization? The Review of Economic Studies, 74(3), 821–855. http://dx.doi.org/10.2139/ssrn.322061
Lopes, R.R., & Carvalho, C.E. (2010). Acordos bilaterais de comércio como estratégia de inserção regional e internacional do Chile. Contexto Internacional, 32(2), 643-693. https://doi.org/10.1590/S0102-85292010000200011
Manger, M. S. (2009). Investing in protection: The politics of preferential trade agreements between North and South.
Cambridge University Press.
Mansfield, E. D. (1998). The proliferation of preferential trading arrangements. Journal of Conflict Resolution, 42(5), 523–543. http://www.jstor.org/stable/174558
Marchini, G. E. (2017). La Alianza del Pacífico y China: ¿Ha-
cia una relación más diversificada? En E. Dussel (Coord.), América Latina y el Caribe y China: Economía, comercio e inversión (pp. 449–470). Unión de Universidades de América
Latina y el Caribe.
Melitz, M., 2003. The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71 (6), 1695–1725.
Ministerio de Comercio Exterior y Turismo del Perú. (2024). Capítulo 1, TLC Perú-China. https://www.acuerdoscomerciales.gob.pe/en_vigencia/china/Textos_Acuerdo.html
Organización Mundial del Comercio (OMC). (2023). The General Agreement on Tariffs and Trade (GATT 1947). https://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm
Paikin, D., & Albornoz, M. (2023). La inserción internacional de América Latina en el marco del crecimiento chino: El problema de la super elasticidad de importaciones. Latin American Journal of Trade Policy, 6(16). https://doi.org/10.5354/0719-
2023.70045
Pavitt, K. (1984). Sectoral patterns of technical change: Towards a taxonomy and a theory. Science Policy Research Unit, University of Sussex.
Piserà, S., Paltrinieri, A., Galletta, S., & Pichler, F. (2025). Trump’s tariffs: Unpacking the EU’s market reaction. Economics Letters, 252, 112380. https://doi.org/10.1016/j.econlet.2025.112380
Porras, J.I. (2003). La estrategia chilena de acuerdos comerciales:
Un análisis político. CEPAL, División de Comercio Internacional e Integración.
Postigo, A. (2014). Liberalisation and Protection under Overlapping Free Trade Agreements: Dynamic Interplay between Free Trade Agreements and Investment. The World Economy, 37(11), 1612-1633. https://doi.org/10.1111/twec.12234
Quiliconi, C. (2014). Competitive Diffusion of Trade Agreements in Latin America. International Studies Review, 16(2), 240-251. https://doi.org/10.1111/misr.12135
Quiliconi, C. (2017). From open regionalism to neo-extractivism: A new geography of trade in Latin America? En J. Briceño & I. Morales (Eds.), Post-hegemonic regionalism in the Americas. Routledge.
Rodrik, D. (2018). What do trade agreements really do? Journal
of Economic Perspectives, 32(2), 73–90.
Roldán, A., Castro, A.; Pérez, C.; Echavarría, P. y Evan, R. (2016). La Presencia de China en América Latina. Comercio, inversión y cooperación económica. Fundación Konrad Adenauer. Colombia. https://www.eafit.edu.co/centros/asia-pacifico/china-en-america-latina/PublishingImages/Paginas/publicacion1/01- Presencia-China-Completo.pdf
Seidmann, D. J. (2009). Preferential trading arrangements as strategic positioning. Journal of International Economics, 79(1), 143-159. https://doi.org/10.1016/j.jinteco.2009.07.004
Serrano Moreno, J. E., Pérez Ceballos, A., & De Abreu Negrón,
M. G. (2021). Beyond copper: China and Chile relations. Asian Education and Development Studies, 10(3), 359-373. https://doi.org/10.1108/AEDS-08-2019-0132
Silva, V. (2004). Chile: A Multi-Track Market Access Strategy. En M.F. Lengyel & V. Ventura-Dias (Eds.), Trade Policy Reforms in Latin America (pp. 27-46). Palgrave Macmillan UK. https://doi.org/10.1057/9780230523760_2
Simmons, B., Dobbin, F., & Garrett, G. (2006). Introduction: The international diffusion of liberalism. International Organization, 60(4), 781–810.
Solís, M., Stallings, B., & Katada, S.N. (2009). Competitive regionalism: FTA diffusion in the Pacific Rim. Palgrave Macmillan. UK. https://doi.org/10.1057/9780230234239_12
Subsecretaría de Relaciones Económicas Internacionales. (2024). Capítulo 1, TLC Chile-China. https://www.subrei.gob.cl/
acuerdos-comerciales/acuerdos-comerciales-vigentes/china
Svampa, M. (2019). Neo-extractivism in Latin America: So-
cio-environmental conflicts, the territorial turn, and new political narratives. Cambridge University Press.
Pavitt, Keith (1984) “Sectoral patterns of technical change: Towards a taxonomy and a theory”. University of Sussex.
Trommer, C. J. V. (2015). El Tratado de Libre Comercio Chile-China y su incidencia en las exportaciones chilenas. Universidad de Chile. Facultad de economía y negocios, escuela de economía y administración.
UNCTAD. (2022). Guide on trade impact assessments. https://
unctad.org/system/files/official-document/ditctab2022d3_
en.pdf
Viner, J., & Oslington, P. (2014). The customs union issue. Oxford University Press.
Wise, C. (2012). Tratados de libre comercio al estilo chino: los TLC Chile-China y Perú-China. Apuntes. Revista de Ciencias Sociales, 39(71), 161–188. https://doi.org/10.21678/apuntes.71.664
World Bank. (2023a). UN Comtrade via WITS. Recuperado de https://wits.worldbank.org/
World Trade Organization. (1997). Article XXIV of the General Agreement on Tariffs and Trade. https://www.wto.org/english/tratop_e/region_e/region_art24_e.htm
