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Free trade agreements in Latin America since 1990: an evaluation of export diversification

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  • Dingemans, Alfonso
  • Ross, César

Abstract

This article explores the previously uncontested claim that the free trade agreements (FTAs) signed by Latin American countries -the cornerstone of their international economic integration strategies since 1990- have led to export diversification in terms of variety of goods and number of trading partners. Using data from the United Nations Commodity Trade Statistics Database (COMTRADE), we show that the bulk of export growth in the region has been in the intensive rather than the extensive margin. Concentration indices support the finding that the expansion of exports into new products and new trading partners has been limited. Latin America's bid to diversify its exports using FTAs (based on a static concept of comparative advantages) instead of more comprehensive strategies has had a negligible impact. Governments should therefore adopt a more dynamic approach to comparative advantages and introduce more active policies. Finally, we pose some open questions for future research.

Suggested Citation

  • Dingemans, Alfonso & Ross, César, 2012. "Free trade agreements in Latin America since 1990: an evaluation of export diversification," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    • Handle: RePEc:ecr:col070:11602
    Note: Includes bibliography
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    References listed on IDEAS

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    1. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    2. repec:umd:umdeco:rodriguez9901 is not listed on IDEAS
    3. Rosemary Thorp, 1998. "Progress, Poverty and Exclusion: An Economic History of Latin America in the 20th Century," IDB Publications (Books), Inter-American Development Bank, number 79303, February.
    4. Francisco Rodríguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338, National Bureau of Economic Research, Inc.
    5. Richard Newfarmer & William Shaw & Peter Walkenhorst, 2009. "Breaking Into New Markets," World Bank Publications - Books, The World Bank Group, number 2616.
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    Cited by:

    1. Coniglio, Nicola D. & Vurchio, Davide & Cantore, Nicola & Clara, Michele, 2021. "On the evolution of comparative advantage: Path-dependent versus path-defying changes," Journal of International Economics, Elsevier, vol. 133(C).
    2. Fredy Cepeda-Lopez & Fredy Gamboa-Estrada & Carlos Leon-Rincón & Hernán Rincon-Castro, 2022. "Colombian Liberalization and Integration into World Trade Markets: Much Ado about Nothing," Revista de Economía del Rosario, Universidad del Rosario, vol. 25(2), pages 1-44, December.
    3. Valenzuela-Klagges, Bárbara & Corvalán-Quiroz, Alejandro & Fuenzalida-O'Shee, Darcy, 2018. "Trade facilitation and its effects on Chile’s bilateral trade between 2006 and 2014," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    4. Roberto Alvarez & Eugenia Andreasen, 2024. "Exploring the Effects of FTAs on Chilean Exports: Heterogeneous responses and Financial Constraints," Working Papers wp555, University of Chile, Department of Economics.

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