Latin America and the Caribbean in the World Economy 2008-2009
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2008-2009 Latin America and the Caribbean in the World Economy Crisis and opportunities for regional cooperation Alicia Bárcena Executive Secretary Laura López Secretary of the Commission Osvaldo Rosales Director of the Division of International Trade and Integration and coordinator of the document Susana Malchik Officer-in-Charge Documents and Publications Division Latin America and the Caribbean in the World Economy is an annual report prepared by the Division of International Trade and Integration of ECLAC. The Statistics and Economic Projections Division, the Economic Development Division, the Natural Resources and Infrastructure Division, ECLAC subregional headquarters for the Caribbean and the Commission’s country office in Washington, D.C. assisted with the preparation of this year’s edition. The production of the report was overseen by Osvaldo Rosales, Director of the Division of International Trade and Integration. Mikio Kuwayama, Chief of the International Trade Unit, was responsible for its technical coordination. In addition to Osvaldo Rosales and Mikio Kuwayama, the following assisted in the preparation of the chapters: Hugo Altomonte, Mariano Alvarez, Raquel Artecona, Inés Bustillo, Claudia de Camino, Jaime Contador, José Elías Durán, Myriam Echeverría, Sebastián Faúndez, Rex García, Sebastián Herreros, German King, Ekaterina Krivonos, Marcelo LaFleur, Roberto Machado, José Carlos Mattos, Graciela Moguillansky, Nanno Mulder, César Ortega, Andrea Pellandra, Gabriel Pérez, Neil Pierre and Ricardo Sánchez. Several chapters of this edition have drawn on the reports “Trends in US Trade and Trade Policy towards Latin America and the Caribbean”, prepared by Craig Van Grasstek, a consultant, and “Global Economic Crisis: CARICOM Impacts and Responses”, by Professor Clive Y. Thomas, Director of the Institute of Development Studies of the University of Guyana. The statistical appendix was prepared by Jaime Contador with the assistance of Andrés Yáñez. It is appended to this document as a CD–ROM and is also available online at: http://www.eclac.org/Comercio/paninsal/Anexo2008_2009/ingles/. Notes As used in this report, the term “country” refers to a territorial entity that is either a State as understood by international law and practice or a territorial entity that is not a State but for which statistical data are maintained on a separate and independent basis. The word “dollars” refers to United States dollars, unless otherwise specified. In the tables, three dots (…)indicate that data are not available or are not separately reported; a dash (-) indicates a nil or insignificant quantity; and a full stop (.)is used to indicate decimals. United Nations Publication ISBN: 978-92-1-121710-0 ISSN printed version: 1680-8657 ISSN CD-ROM: 1811-6205 LC/G.2413-P Sales No.: E.09.II.G.62 Copyright © United Nations, December 2009. All rights reserved Printed in Santiago, Chile Requests for authorization to reproduce this work in whole or in part should be sent to the Secretary of the Publications Board, Headquarters, New York, N.Y. 10017, United States of America. Member States and their governmental institutions may reproduce without prior authorization, but are requested to mention the source and to inform the United Nations of such reproduction. Latin America and the Caribbean in the World Economy • 2008-2009 3 Contents Foreword............................................................................................................................................................... 7 Summary .............................................................................................................................................................. 9 Chapter I The crisis and its future impact on the global economy ......................................................................... 17 A. Introduction ................................................................................................................................................... 17 B. From financial crisis to global crisis ............................................................................................................. 18 1. The global crisis and the outlook today................................................................................................... 18 2. The financial crisis .................................................................................................................................. 19 3. The recessionary shock and the global economy .................................................................................... 21 C. Economic policy to the rescue ....................................................................................................................... 23 1. United States ........................................................................................................................................... 23 2. The European Union ............................................................................................................................... 24 3. China ....................................................................................................................................................... 24 D. Impact of the crisis on world trade ................................................................................................................ 25 1. The downslide in the world goods trade.................................................................................................. 25 2. Trade in (modern) services is faring better than trade in goods .............................................................. 28 E. The new role of China and the other BRICs in the world economy ............................................................. 29 1. China: the economic star of the decade ................................................................................................... 29 2. The BRICs and changes in global governance ........................................................................................ 32 F. Containing protectionist pressures and concluding the Doha Round............................................................ 33 1. Subsidies as a form of protectionism ...................................................................................................... 34 2. Protectionism in government procurement ............................................................................................. 35 3. Other protectionist measures ................................................................................................................... 35 4. Responses by the World Trade Organization and incentives to avoid protectionism .............................. 36 5. The Doha Round ..................................................................................................................................... 37 G. Combating climate change and resisting ecological protectionism .............................................................. 38 1. At the multilateral level ........................................................................................................................... 38 2. At the national level ................................................................................................................................. 39 3. World Trade Organization rules .............................................................................................................. 41 H. Perspectives and long-term impact of the economic and financial crisis ...................................................... 41 1. The impact of the crisis will be felt for some time .................................................................................. 41 2. The impact on trade and the organization of global production .............................................................. 43 Bibliography ......................................................................................................................................................... 46 4 Economic Commission for Latin America and the Caribbean (ECLAC) Chapter II The effects of the crisis on regional trade .................................................................................................. 49 A. Introduction ................................................................................................................................................... 49 B. General trends in the regional trade in goods ................................................................................................ 50 C. Regional trade patterns, by origin and destination ........................................................................................ 55 D. Regional trade patterns, by product group .................................................................................................... 60 E. General trends in the trade in services........................................................................................................... 62 F. Trends in the other components of the balance of payments ........................................................................ 65 G. Regional trade-policy responses ................................................................................................................... 66 1. Brief assessment by subregion ................................................................................................................ 70 H. Conclusions ..................................................................................................................................................