International Trade Outlook for Latin America and the Caribbean: Recovery in an uncertain context

104 Chapter II
Economic Commission for Latin America and the Caribbean (ECLAC)
highly services-intensive. Both countries have the highest shares of both services aimed
at reducing costs and those aimed at adding value to manufacturing exports —“cost
services” and “value services”, respectively (Arbache, Rouzet and Spinelli (2016).
Asian countries also show interesting differences. India and Singapore are the
countries with the highest domestic services value added content of manufacturing
exports in 2011 (almost 20%). While two thirds of this content is concentrated in
distribution services, the business services content of these two countries is also
the highest within this region. This probably reflects the fact that both countries have
the most developed domestic business services sector within the Asian sample. The
business services content in the value of manufacturing exports increased in all countries
between 1995 and 2011 (except Brunei Darussalam), as regional value chains —which
require proportionally more of these services— became deeper. Financial services
and real estate are also important services, particularly in India, Thailand and Malaysia.
In 2011, the imported services content was higher than the domestic content in all
countries, except for India and the Philippines.
3. Domestic intermediate services may contribute
differently to competitiveness than imported ones
International rankings
on the quality of
infrastructure services
and ease of access
to loans show that
several Latin American
countries perform more
poorly than those
in Asia.
Regression results suggest that the total domestic services content of manufacturing
exports is negatively associated with global export market shares, whereas total imported
services content is positively associated. However, some types of domestic business
services seem to contribute positively to changes in global export market shares,
whereas domestic financial and real estate services (and some other services) seem
negatively associated (see box II.3). The poor quality of certain domestic services may
explain why these reduce the competitiveness of the region’s manufacturing goods.
For example, international rankings on the quality of infrastructure services and ease
of access to loans show that several Latin American countries perform more poorly
than those in Asia (see figure II.18).
Figure II.18
Latin America (7 countries), ASEAN, China and India: position in global rankings of 138 countries, 2016
Globally speaking, Latin American countries perform poorly in infrastructure
and financial services
A. Infrastructure quality
140
120
100
80
60
40
20
0
China
Chile
India
ASEAN a
Mexico
Costa Rica
Argentina
Colombia
Peru
Brazil