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

148 Chapter III Economic Commission for Latin America and the Caribbean (ECLAC)
agricultural trade, although it has been substantial in all cases. 10 A study based on a set
of 53 trade agreements signed around the world between 1992 and 2009 concluded
that inter-regional agreements (i.e. negotiated between countries or groupings of two
separate regions) achieved an average proportion of duty-free agricultural tariff lines of
82%, at full implementation (OECD, 2015). That list includes all the agreements signed
until then by countries of the region with Canada, China, the United States, Japan, the
Republic of Korea and the European Union.
Table III.5
Latin America and
the Caribbean: trade
agreements between
countries and groupings
of the region with
selected partners,
as of August 2017
Most countries of the region have signed trade agreements with partners
beyond the region
Partner
Canada
China
United States
India
Japan
Republic of Korea
European Union
Countries and groupings of the region with trade agreements
Chile, Colombia, Costa Rica, Honduras, Panama, Peru (all in force)
Chile, Costa Rica, Peru (all in force)
Chile; Colombia; Panama; Peru; Mexico (North American Free Trade Agreement, NAFTA); Costa
Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua (Free Trade Agreement
between the Dominican Republic, Central America and the United States) (all in force)
Chile, MERCOSUR a (both in force)
Chile, Mexico, Peru (all in force)
Chile, Colombia, Peru (in force)
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua (negotiations concluded)
Chile, Colombia, Ecuador, Mexico, Peru, Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, Panama, CARIFORUM b (in force)
MERCOSUR a (negotiations under way)
Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of Organization of American States (OAS),
Foreign Trade Information System [online] http://www.sice.oas.org.
a
Southern Common Market.
b
Caribbean Forum of African, Caribbean and Pacific States.
In the context of regional integration, the countries of Latin America and the Caribbean
have also made considerable progress in removing tariffs applicable to intra-regional
agricultural trade. In effect, the study mentioned above concluded that agreements
between countries of the region would reach a 95% proportion of duty-free tariff lines
at full implementation (OECD, 2015).
With the current renegotiation of the North American Free-Trade Agreement
(NAFTA), there is now an emphasis on the potential to expand trade in foodstuffs
between Mexico and the rest of the region. In 2016, only 9% of Mexican agricultural
imports came from Latin America and the Caribbean, compared to the 70% sourced in
the United States. This is due in large part to geographic proximity, which translates into
lower transportation costs compared to more distant suppliers. However, the duty-free
access that nearly all agricultural exports from the United States enjoy under NAFTA
also plays a role. On the contrary, within the region, it is only Mexico’s partners in the
Pacific Alliance (Chile, Colombia and Peru) and in Central America that have high levels
of preferential access for their agricultural exports to Mexico.
Neither of the region’s two main agricultural exporters, Brazil and Argentina, has
a comprehensive trade agreement with Mexico, hence the majority of the agricultural
products they export to this country enter with no tariff preferences (ECLAC/FAO/
ALADI, 2016). Thus, their shipments of maize face an MFN (most-favoured-nation) tariff
of 20%; wheat exports, 15%; rice, between 9% and 20%; beef and pork, on average,
20%; and poultry meat, between 80% and 100% (Michalczewsky, 2017). In the current
climate of uncertainty created by the United States decision to renegotiate NAFTA, it is
10
In general, the agreements signed by countries of the region with Canada, China and the United States achieve a greater
degree of reciprocal liberalization in the agricultural sector than those signed with India, Japan, the Republic of Korea and the
European Union.