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International Trade Outlook for Latin America and the Caribbean

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International Trade Outlook for Latin America and the Caribbean 2019 International Trade Outlook for Latin America and the Caribbean Adverse global conditions leave the region lagging further behind Thank you for your interest in this ECLAC publication ECLAC Publications Please register if you would like to receive information on our editorial products and activities. When you register, you may specify your particular areas of interest and you will gain access to our products in other formats. www.cepal.org/en/publications ublicaciones www.cepal.org/apps 2 Contents Economic Commission for Latin America and the Caribbean (ECLAC) Alicia Bárcena Executive Secretary Mario Cimoli Deputy Executive Secretary Raúl García-Buchaca Deputy Executive Secretary for Management and Programme Analysis Ricardo Pérez Chief, Publications and Web Services Division International Trade Outlook for Latin America and the Caribbean, 2019 is an annual report prepared by the Division of International Trade and Integration of the Economic Commission for Latin America and the Caribbean (ECLAC). The production of the report was overseen by Mario Cimoli, Officer in Charge of the Division of International Trade and Integration of ECLAC. Keiji Inoue, Senior Economic Affairs Officer with that Division, was responsible for its technical coordination. José Elías Durán, Sebastián Herreros, Jeannette Lardé, Nanno Mulder, Gabriel Pérez-Salas, Ricardo Sánchez, Fabio Weikert and Dayna Zaclicever, staff members of the Division, and Mariano Álvarez, Alicia Frohmann and Ximena Olmos, consultants, assisted in the preparation and drafting of the chapters. The authors are grateful for inputs provided by Eliana P. Barleta, Cristóbal Budnevich, Sebastián Castresana, Pablo Chauvet, Marcelo Dolabella, Maria Isabel Echeverria, Isabel Jarrett, Javier Meneses, Andrés Mondaini, Gastón Rigollet, Jonathan Saalfield, Mario Saeteros and Silvana Sánchez Di Doménico. Thanks are also extended to the Central American Secretariat for Economic Integration (SIECA) and the General Secretariat of the Andean Community, which provided valuable statistical information. United Nations publication ISBN: 978-92-1-122027-8 (print) ISBN: 978-92-1-047950-9 (pdf) ISBN: 978-92-1-358264-0 (ePub) Sales No: E.19.II.G.5 LC/PUB.2019/20-P Distribution: G Explanatory notes: Copyright © United Nations, 2019 - Three dots (...) indicate that data are not available or are not separately reported. - A dash (-) indicates that the amount is nil or negligible. All rights reserved - A full stop (.) is used to indicate decimals. - The word “dollars” refers to United States dollars, unless otherwise specified. Printed at United Nations, Santiago - A slash (/) between years (e.g. 2013/2014) indicates a 12-month period falling between the two years. S.19-00747 - Individual figures and percentages in tables may not always add up to the corresponding total because of rounding. This publication should be cited as: Economic Commission for Latin America and the Caribbean (ECLAC), International Trade Outlook for Latin America and the Caribbean, 2019 (LC/PUB.2019/20-P), Santiago, 2019. Applications for authorization to reproduce this work in whole or in part should be sent to the Economic Commission for Latin America and the Caribbean (ECLAC), Publications and Web Services Division, [email protected]. Member States and their governmental institutions may reproduce this work without prior authorization, but are requested to mention the source and to inform ECLAC of such reproduction. International Trade Outlook for Latin America and the Caribbean • 2018 Contents 3 CONTENTS Presentation................................................................................................................................................................ 9 Summary.................................................................................................................................................................... 13 Capítulo I Mounting trade tensions and shrinking regional trade .................................................................................... 25 Introduction ........................................................................................................................................................... 27 A. Trade tensions increase .................................................................................................................................. 28 1. Tensions between China and the United States are intensifying ........................................................... 28 2. Background criticism of the multilateral trading system ....................................................................... 31 B. Trade tensions are affecting the real economy .............................................................................................. 35 1. As the trade slowdown intensifies, the economies of China and the United States are decoupling ........ 35 2. The trade slowdown is having an impact on manufacturing industry .................................................... 43 C. Weak world trade is a continuing after-effect of the financial crisis ............................................................ 49 1. Several factors contribute to this weakness ........................................................................................... 49 2. New technologies are having mixed effects on trade ............................................................................ 59 D. After two years of recovery, regional trade is faltering again ....................................................................... 62 1. Exports of goods and services contract in the first half of the year ....................................................... 62 2. Regional trade is expected to decline in 2019, albeit with significant disparity between subregions ........... 68 3. Intraregional trade is contracting the most ............................................................................................. 78 Bibliography ........................................................................................................................................................... 81 Annex I.A1 ............................................................................................................................................................. 84 Chapter II Enhancing trade’s contribution to environmental sustainability...................................................................... 87 A. The interdependency between trade and climate change ............................................................................. 89 B. An overview of the environmental footprint of Latin America’s international trade .................................... 93 1. There is more carbon embedded in the region’s consumption than in its production ............................ 93 2. The largest Latin American economies are net carbon importers .......................................................... 98 C. The links between trade governance and environmental sustainability are increasing ............................. 104 1. Greater coherence is needed between multilateral regimes for trade and the environment .............. 104 2. Modern trade agreements incorporate new environmental provisions ................................................ 109 3. Nationally determined contributions to the Paris Agreement still contain few trade measures ......... 115 D. The region’s weak performance in global trade in environmental goods .................................................... 118 E. Trade improves environmental performance in some exporting sectors ..................................................... 126 1. Growing awareness of the environmental impact of export activity .................................................... 126 2. The increasing diffusion of sustainability standards in trade ............................................................... 127 3. Public-private challenges for enhancing environmental sustainability at the local level .................... 130 F. Pathways to strengthen trade’s contribution to environmental sustainability ............................................ 133 Bibliography ......................................................................................................................................................... 135 Chapter III Logistics and infrastructure for trade, production and integration ............................................................... 139 A. Infrastructure and logistics are crucial for trade and production ................................................................. 141 B. Maritime logistics in Latin American and Caribbean foreign trade ............................................................. 142 C. The infrastructure gap hinders competitiveness and productivity ............................................................... 148 4 Contents Economic Commission for Latin America and the Caribbean (ECLAC) D. Infrastructure must be resilient, efficient and sustainable .......................................................................... 153 1. Resilience as a fundamental characteristic of infrastructure ............................................................... 153 2. Infrastructure resilience in Latin America and the Caribbean ............................................................. 154 3. Global value chain resilience ................................................................................................................. 157 E. Deficient regulation can
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