Latin American Journal of Trade Policy

Divergent Development experiences: A general outlook of China and Latin America’s Development trends

Jael Cortes Rondoy — Sat, 31 Dec 2022 00:00:00 +0000

Following a definition of development that brings back the role of productive capabilities and endorses structural change, this paper examines two key elements and their trends: industrialization and trade patterns. Through the analysis of economic factors covering the period 1980-2019, this paper aims to offer insights into the elements that have led to divergent development outcomes in China and Latin America, paying particular attention to the cases of Chile and Mexico. Indicators including yearly GDP growth, the share of the world GDP, and per-capita GDP will be used to show that China has outpaced Latin America in terms of growth. Moreover, it will also be demonstrated that while Latin America is experiencing a deindustrialization trend, evidenced by a decline in the manufacturing sector and low levels of high-technology exports, China has experienced rapid industrialization. Moreover, China's exports serve as an illustration of a country that transitioned from producing and exporting low-value manufactured items to more complex goods with higher added value, while Chile has not been able to leave behind its reliance on natural resources. In the case of Mexico, although its exports are not concentrated in primary commodities, they are built on a maquiladora model that relegates it to the bottom of industrial value chains.

Belt and Road Initiative Impact on Bilateral Trade Flows

Ismail Amani, Dr., Nadjet Kaci, Dr. — Sat, 31 Dec 2022 00:00:00 +0000

This study aims to assess Belt and Road Initiative impact on bilateral trade between China and the partner countries. Thus, a Panel EGLS gravity model on data of 123 countries from 2012 to 2019 has been elaborated including standard gravity model variables as geographical and socio-cultural distance, local income. This model has been enhanced by introducing a dummy variable representing the membership of the partner country in the BRI and/or in WTO. Results show that standard gravity variables have their usual effects, a negative impact of distance while local incomes and sharing a common language have a positive effect. WTO membership has a positive impact too on bilateral trade between the considered countries. BRI also has a positive impact on bilateral trade between China and partner countries, hence its benefits for both. This positive impact is higher in BRI main road’s regions, Middle East, Europe, South and East Asia, while it lower in other regions as Latin America and North Africa.

Measuring value circulation in regional chains

Alvaro Lalanne — Sat, 31 Dec 2022 00:00:00 +0000

Since Hummels, Ishii and Ye (2001) seminal work there have been lots of proposals for measuring participation in global value chains with input-output tables. Conjointly to the development of measures, several projects created Inter-Country Input-output tables. To the extent that integrating data of different origins requires strong assumptions and confidence in sources, some projects keep more detailed inter country input-output tables at a regional level. In this paper I adapt two of the most complete methods conceived for global Input-output tables to the case of regional tables, and I use them to analyze the intraregional value chain trade of South America. Besides characterizing the trade in this region, this paper identifies and asses the differences between adaptations of Borin and Mancini (2019) source-based decomposition of gross exports and the Wang, Wei and Zhu (2018) method.

Evolution of Mercosur intra-regional trade from 2016 to 2020

Sat, 31 Dec 2022 00:00:00 +0000

The first attempts at the Latin American integration process showed a highly pragmatic character, without many concerns for medium and long-term projects. The main concern was to expand intra and extra-regional trade. However, since the 1980s (the decade considered the lost decade for Latin America), when the external debt crises and the adjustment policies recommended by the International Monetary Fund (IMF) led the region to a higher poverty rate due to the social costs of such policies, Latin America has been rethinking its integration.

The creation of LAIA (Latin American Integration Association), in 1980, replacing LAFTA (Latin American Free Trade Association), in 1960, and its sub-regional integration have changed Latin America’s economic growth trajectory from the 1990s.

Within the scope of LAIA, Mercosur was created in 1991, with the objective of promoting intra and extra-regional trade expansion through the elimination of tariff barriers among its members, implementing a Common External Tariff. The full members of Mercosur are Argentina, Brazil, Paraguay and Uruguay. The bloc also has associated members: Bolivia, Chile, Peru, Colombia, Ecuador, Guyana and Suriname and observer members, namely Mexico and New Zealand. This work was developed to verify whether Mercosur, with the elimination of tariff barriers between full members and the Common External Tariff, has been able to meet its main objective, which is to expand intraregional trade among its members. Therefore, the main objective was to verify whether there was trade expansion between the bloc's full partners between the years 2016 and 2020.

The methodologies used for this purpose were descriptive statistics and literature review. Aiming to evaluate the annualized rate of change of trade in the period covered, it was decided to use the Compound Annual Growth Rate (CAGR), which is a differential of this research. The results showed that within the bloc, Brazil had Argentina as its main trading partner. It was observed that there was an expansion of intraregional trade between 2016 and 2018, followed by a considerable reduction of this trade during the period 2019-2020, but that Brazil still continued to be the member that obtained the largest intra-regional trade balances. Paraguay, in turn, did not show the same trend of commercial reduction for all other partners in 2019 and 2020. In addition, in 2020, even with the COVID 19 pandemic, Paraguay managed to increase its exports to Brazil and Argentina, showing a contrary trend only to their exports to Uruguay. Uruguay, in turn, expanded its imports from partners throughout the period, except for Paraguay in 2020, where its exports exceeded imports. With regard to Argentina, its exports to members began to fall in 2019 and increased in 2020, especially in relation to Brazil. The country also drastically reduced its imports from Brazil and Paraguay in 2019 and 2020, although it also considerably expanded imports from Paraguay

Intraregional Analysis of the Autoparts and Metalmechanical Sectors of Santander Deparment in the Context of the Pacific Alliance during 2017 and 2021

Sat, 31 Dec 2022 00:00:00 +0000

The aim of this research was to analyze the intra-regional trade conditions of the auto parts and metal-mechanic sectors of Santander department, during the period 2017-2021. In order to achieve the objective, the intraregional trade indicators were applied to the tariff chapters corresponding to the auto parts and metal-mechanic sectors of Santander. The methodology implemented was based on the application of the indicators granted by the Economic Commission for Latin America and the Caribbean (ECLAC) in order to measure the trade dynamism of a region or a country. Among the main conclusions reached by this research, it is highlighted that the tariff chapter with the highest export dynamics is 84 (Nuclear reactors, boilers, machines, apparatus and mechanical devices) with values ranging between US$ 148,717 and US$ 239,507; the only tariff chapter with high export trend from Santander to the countries of the Pacific Alliance is 73 corresponding to manufactures of iron and steel castings, where the years 2017 and 2019. In imports, tariff chapter 73 stands out, which had the highest dynamism between 2017 and 2021, with imports ranging from $68,954 to $124,118 in the period of analysis. The Intraregional Trade Indicator of imports shows that the department of Santander maintains a low level of imports of auto parts and metal-mechanic products from the Pacific Alliance. The tariff chapters where there is a high import trend are 76 (Aluminum and its manufactures). Regarding the trade balance, the behavior of exports of tariff chapters 82 (Cutlery tools and tools) and 84 (Nuclear reactors, boilers, machines, apparatus and mechanical devices) are highlighted, presenting surplus balances between 2017 and 2021.

Una revisión de los debates actuales vinculados al comercio internacional y la sostenibilidad ambiental

Nicolás Albertoni, Javiera Cáceres, Camila Massa — Sat, 31 Dec 2022 00:00:00 +0000

El cambio climático es hoy unos de los principales desafíos globales que enfrenta la humanidad, y por ello uno de los principales temas de discusión en foros y encuentros internacionales. A pesar de que en diferentes rondas multilaterales se ha tratado este tema, incluyendo compromisos firmados como el Acuerdo de París, y que los países han llegado a consensos sobre la necesidad de contener el aumento de temperatura global por debajo de 2 grados Celsius para el año 2030, las emisiones de Gases de Efecto Invernadero (GEI) continúan creciendo y el tiempo para lograr las metas sigue reduciéndose (OCDE, 2021). Mitigar los efectos del calentamiento global (tendencia que ha ocurrido durante los últimos 150 años debido al aumento de emisiones de GEI derivados de la quema de combustibles fósiles) y adaptarse a sus consecuencias requiere una activa participación hacia el desarrollo de actividades económicas que salvaguarden la conservación de la biodiversidad (National Geographic, 2020). En este contexto, se calcula que el 25% de las emisiones de GEI globales están relacionadas al comercio de bienes, con un 7% directamente ligado al transporte de estas mercancías (ITF, 2016). Desde este problema, nace la oportunidad de diseñar e implementar políticas comerciales instrumentales para el diálogo entre el comercio y medio ambiente, y la consecución de objetivos ligados al desarrollo sostenible.