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

International Trade Outlook for Latin America and the Caribbean • 2017
Chapter I
31
Figure I.2
China: share of parts and components in total imports (excluding oil) from the rest of the world
and selected partners, 2000-2016
(Percentages)
China gradually replaces imported parts and components with local output
70
65
60
55
50
45
40
35
30
Asia
World
United States
European Union (28 countries)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of the United Nations Commodity Trade Statistics Database (COMTRADE).
The rate of trade liberalization has slowed since the start of the crisis. Prospects for
two of the main trade initiatives launched during the present decade —the Trans-Pacific
Partnership Agreement (TPP) and the Transatlantic Trade and Investment Partnership
(TTIP)— are uncertain on account of the dramatic turn taken by United States trade
policy under the current Administration. This is compounded by the difficulties facing
WTO and the uncertainty caused by Brexit and the renegotiation of NAFTA (see
section B.2). No consensus exists, however, regarding the impact of reduced trade
liberalization (or the rise of protectionism) on global trade performance in recent years,
which is largely due to problems in establishing precise and quantifiable metrics. While
one study concludes that the slower rate of trade liberalization could explain about 25%
of the reduction in trade growth over 2011-2015 compared to 1991-2007 (OECD, 2016),
another finds that the contribution of a potential increase in protectionism is small and
statistically insignificant (Auboin and Borino, 2017).
In the area of technology, continued progress with automation, particularly in
advanced countries, could undermine the dynamism of global trade over the coming
years. Inasmuch as automation reduces incentives to transfer production to developing
countries in search of lower labour costs, this would put a brake on the expansion of
global value chains and, as a result, to trade associated with them (see section B.3).
Finally, it should be noted that in an increasingly digital world economy, the
statistics available for measuring trade suffer from obvious limitations. The emergence
of digital platforms allows trade —including cross-border trade— in a growing range of
services previously deemed not tradable, as well as in digital goods such as e-books,
video games and downloads of music and films. In some sectors, digital goods have
practically displaced their physical counterparts from the market. In those cases,
“observable” trade (i.e. trade that crosses borders physically) may be falling, but that
could at least partly reflect an increase in digital trade, which the statistics currently
available are unable to capture accurately. There is therefore a clear need to develop
new methodologies for measuring the digital trade in goods and services.