Cover IMF Working Papers
Buy Book in Print
The Dynamics of Trade Integration and Fragmentation in LAC
Author:
Rafael Machado Parente
Search for other papers by Rafael Machado Parente in
Current site
Google Scholar Close
and
Flavien Moreau
Search for other papers by Flavien Moreau in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2024: Issue 253
Language:
English
Publication Date:
13 Dec 2024
DOI:
https://doi.org/10.5089/9798400296093.001
ISBN:
9798400296093
ISSN:
1018-5941
Pages:
38
Keywords:
Latin America and the Caribbean; Trade barriers; Gravity; Geoeconomic fragmentation; fragmentation scenario; trade performance; import tariff; goods imports; LAC's trade; Trade balance; Exports; Tariffs; Imports; Trade policy; Global; Central America; Caribbean; South America; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (6.5 MB) Download Epub
Trade barriers and poor infrastructure play an important role in limiting trade integration in Latin America and the Caribbean (LAC). Closing half of the infrastructure gap between LAC and advanced economies could lift exports by 30 percent. Reducing import tariffs could boost LAC’s trade, but its responsiveness is lower than in other EMDEs, particularly in the long run, due to the region’s specialization in agricultural exports with inelastic demand and supply constraints like growing cycles and weather conditions. Amid deepening global trade tensions, LAC is well placed to withstand a mild trade fragmentation scenario, in which trade barriers are erected only among large economies. However, the region’s output losses could be sizable in more extreme scenarios, where the global economy splinters into competing economic blocs and LAC loses access to important markets. Boosting trade, including regional trade, could pay a double dividend of lifting growth in the region while mitigating risks from global fragmentation.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund