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

This first edition of International Trade Outlook for Latin America and the Caribbean, which is the continuation of Latin America and the Caribbean in the World Economy with a new title, covers 2017 and contains three chapters. The first chapter describes the current international context and the recovery of trade in the region. Chapter II reviews the region’s performance in global trade in services in general and in modern services in particular, since 2005. Chapter III provides an overview of Latin America and the Caribbean’s share of the world agricultural trade since 2000 and offers some policy recommendations for increasing the sector’s contribution to regional development.

This first edition of International Trade Outlook for Latin America and the Caribbean, which is the continuation of Latin America and the Caribbean in the World Economy with a new title, covers 2017 and contains three chapters. The first chapter describes the current international context and the recovery of trade in the region. Chapter II reviews the region’s performance in global trade in services in general and in modern services in particular, since 2005. Chapter III provides an overview of Latin America and the Caribbean’s share of the world agricultural trade since 2000 and offers some policy recommendations for increasing the sector’s contribution to regional development.

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6 Contents<br />

Economic Commission <strong>for</strong> <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong> (ECLAC)<br />

Figure II.16 ASEAN (8 countries) <strong><strong>an</strong>d</strong> <strong>Lat<strong>in</strong></strong> <strong>America</strong> (7 countries): types of services <strong>in</strong>corporated<br />

<strong>in</strong>to m<strong>an</strong>ufactur<strong>in</strong>g exports, 1995 <strong><strong>an</strong>d</strong> 2011.................................................................................. 102<br />

Figure II.17 Selected countries: share of domestic <strong><strong>an</strong>d</strong> <strong>for</strong>eign services <strong>in</strong> gross value<br />

of m<strong>an</strong>ufactur<strong>in</strong>g exports, 1995 <strong><strong>an</strong>d</strong> 2011..................................................................................... 103<br />

Figure II.18 <strong>Lat<strong>in</strong></strong> <strong>America</strong> (7 countries), ASEAN, Ch<strong>in</strong>a <strong><strong>an</strong>d</strong> India: position <strong>in</strong> global r<strong>an</strong>k<strong>in</strong>gs<br />

of 138 countries, 2016................................................................................................................... 104<br />

Figure II.19 <strong>Lat<strong>in</strong></strong> <strong>America</strong>: import<strong>an</strong>ce of determ<strong>in</strong><strong>an</strong>ts of competitiveness <strong>in</strong> bus<strong>in</strong>ess services<br />

exports, 2014................................................................................................................................. 107<br />

Figure II.20 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong> (17 countries): digitalization of production, 2015.................... 112<br />

Figure III.1 World agricultural exports, 2000-2015.......................................................................................... 124<br />

Figure III.2 Composition of world agricultural exports, 2015.......................................................................... 124<br />

Figure III.3 Ten lead<strong>in</strong>g agricultural export<strong>in</strong>g <strong><strong>an</strong>d</strong> import<strong>in</strong>g countries worldwide, 2015 ............................ 125<br />

Figure III.4 Monthly real <strong>in</strong>dex of food prices, J<strong>an</strong>uary 1990 to July 2017..................................................... 127<br />

Figure III.5 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: agricultural trade with <strong>the</strong> rest of <strong>the</strong> world, 2000-2016...... 128<br />

Figure III.6 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: share of regional agricultural exports <strong>in</strong> world agricultural<br />

exports <strong><strong>an</strong>d</strong> <strong>in</strong> <strong>the</strong> region’s total merch<strong><strong>an</strong>d</strong>ise exports to <strong>the</strong> world, 2000-2016......................... 128<br />

Figure III.7 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: trade bal<strong>an</strong>ce <strong>in</strong> <strong>the</strong> agriculture sector<br />

with selected partners, 2000-2015................................................................................................ 129<br />

Figure III.8 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: composition of agricultural trade by subregion, 2000-2015...... 130<br />

Figure III.9 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: agricultural trade bal<strong>an</strong>ces by subregion, 2000-2015............ 131<br />

Figure III.10 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong> (31 countries): agricultural trade bal<strong>an</strong>ces by country,<br />

average 2015-2016........................................................................................................................ 132<br />

Figure III.11 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong> (selected countries): share of <strong>the</strong> agricultural sector<br />

<strong>in</strong> merch<strong><strong>an</strong>d</strong>ise trade, 2000 <strong><strong>an</strong>d</strong> 2016........................................................................................... 133<br />

Figure III.12 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: composition of agricultural exports by dest<strong>in</strong>ation,<br />

2000-2015...................................................................................................................................... 134<br />

Figure III.13 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong> (23 countries): Herf<strong>in</strong>dahl-Hirschm<strong>an</strong> <strong>in</strong>dex<br />

of agricultural exports by dest<strong>in</strong>ation, 2000 <strong><strong>an</strong>d</strong> 2015.................................................................. 135<br />

Figure III.14 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: composition of agricultural imports by orig<strong>in</strong>, 2000-2015..... 135<br />

Figure III.15 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong> (subregions <strong><strong>an</strong>d</strong> selected countries): composition<br />

of agricultural imports by orig<strong>in</strong>, 2015 ......................................................................................... 136<br />

Figure III.16 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: trade bal<strong>an</strong>ce <strong>in</strong> <strong>the</strong> agricultural sector by category,<br />

2000 <strong><strong>an</strong>d</strong> 2015............................................................................................................................... 139<br />

Figure III.17 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong> (20 countries): Herf<strong>in</strong>dahl-Hirschm<strong>an</strong> <strong>in</strong>dex<br />

of agricultural exports by product, 2000 <strong><strong>an</strong>d</strong> 2015........................................................................ 140<br />

Figure III.18 <strong>Lat<strong>in</strong></strong> <strong>America</strong> <strong><strong>an</strong>d</strong> <strong>the</strong> <strong>Caribbe<strong>an</strong></strong>: number of agricultural products exported<br />

to selected dest<strong>in</strong>ations, 2000-2016............................................................................................. 142<br />

Figure III.19 Selected agricultural products: lead<strong>in</strong>g world exporters, 2000 <strong><strong>an</strong>d</strong> 2016.................................... 143<br />

Figure III.20 Selected countries: average value of exports of coffee <strong><strong>an</strong>d</strong> frozen meat of bov<strong>in</strong>e<br />

<strong>an</strong>imals, by orig<strong>in</strong>, 2015................................................................................................................. 145<br />

Figure III.21 Selected countries: average tariffs applied to agricultural <strong><strong>an</strong>d</strong> non-agricultural products, 2016........ 147<br />

Boxes<br />

Box I.1 The impact of trade on <strong>the</strong> region’s productive structure, 2000-2011............................................ 46<br />

Box II.1 Improvements <strong><strong>an</strong>d</strong> challenges <strong>in</strong> <strong>Lat<strong>in</strong></strong> <strong>America</strong>n trade <strong>in</strong> services statistics................................ 92<br />

Box II.2 Empirical studies show <strong>in</strong>termediate services play<strong>in</strong>g a signific<strong>an</strong>t role<br />

<strong>in</strong> m<strong>an</strong>ufactur<strong>in</strong>g competitiveness.................................................................................................. 98<br />

Box II.3 Econometric regressions on <strong>the</strong> role of domestic <strong><strong>an</strong>d</strong> imported services<br />

<strong>in</strong> m<strong>an</strong>ufactur<strong>in</strong>g per<strong>for</strong>m<strong>an</strong>ce...................................................................................................... 105<br />

Diagrams<br />

Diagram II.1 Classification of traditional <strong><strong>an</strong>d</strong> modern services........................................................................... 78<br />

Diagram II.2 Offshore services <strong><strong>an</strong>d</strong> labour dem<strong><strong>an</strong>d</strong>............................................................................................. 95<br />

Diagram II.3 Role of services <strong>in</strong> m<strong>an</strong>ufactur<strong>in</strong>g supply cha<strong>in</strong>s............................................................................ 97<br />

Diagram II.4 <strong>Trade</strong> <strong>in</strong> services: GATS-plus <strong><strong>an</strong>d</strong> GATS-extra discipl<strong>in</strong>es under megaregional<br />

agreements, 2017.......................................................................................................................... 116

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