Trade integration strategies and welfare. A comparative study of six selected Latin-American countries

Latin America has historically been a region not very open to international trade. However, since the early 1990s, a change in trend has been observed, although it was not homogeneous neither it took place at a similar pace when comparing among countries in the region. In this paper, we estimate and compare the effects that different preferential trade integration strategies have had on consumer welfare, through changes in the prices of the goods and services consumed. Three channels are identified, changes in unit values, and in the quality and variety of the goods that are consumed. For the six countries analyzed here, which correspond to the region's main economies, the results show differences in the effects, both in terms of their magnitude and the channel through which they materialized. Argentina is the worst performer, while Mexico is at the opposite end. Except for Chile, countries that followed a more aggressive integration policy show better results.