Regional Integration in Latin America - The Pacific Alliance a Way Ahead
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Regional Integration in Latin America - The Pacific Alliance a Way Ahead
Journal Articles, Spanish

Inter-Regional Trade in Manufactured Goods in the Pacific Alliance Countries According to Linder’s Theory

Abstract:
Derived from the economic restructuring of the late twentieth century, the logic of the market and trade liberalisation have become the guiding principles of the capitalist system. The reduction of barriers to international trade and trade agreements are mechanisms for promoting free trade. The Pacific Alliance is a regional integration initiative recently created, and with five years of existence, a preliminary evaluation is in order.

The objective of this article is to analyse the evolution of trade in manufactured goods between the member countries of the Pacific Alliance. To achieve this aim, the study is based on the theory of Linder stating that trade in manufactured goods will be intensive among countries with similar per-capita income.

A descriptive study is conducted with data from UNCTAD, and a modified gravity model is used subsequently. Based on the empirical evidence, the study establishes that trade in manufactured goods between the member countries of the Pacific Alliance is in fact low. However, the member countries of the Alliance have increased trade with other countries, mainly with the United States and China, even if the geographical distance with these countries is wider.

Resumen:
Derivadas de la restructuración económica de finales del siglo XX, la lógica del mercado y la apertura comercial se han convertido en los ejes rectores del sistema capitalista.

La disminución de las barreras al comercio internacional y los acuerdos comerciale son mecanismos que permiten la promoción del libre comercio. La Alianza del Pacífico representa una iniciativa de integración regional de reciente creación y a cinco años de su firma es necesaria una evaluación.

El objetivo de esta investigación es analizar la evolución del comercio de bienes manufacturados entre las naciones de la Alianza del Pacífico. Para alcanzar dicho objetivo, esta investigación se basa en la Teoría de Linder que establece que el comercio de bienes manufacturados será más intensivo entre países de similar ingreso per cápita. Se realizó un estudio descriptivo con datos de la United Nations Conference on Trade and Development (UNCTAD) y posteriormente se empleó un modelo gravitacional modificado. Con base en la evidencia empírica se establece que el comercio de bienes manufacturados entre las naciones de la Alianza del Pacífico es marginal.

Los países signatarios presentan mayor comercio con otras naciones, principalmente Estados Unidos y China, aun cuando las distancias geográficas con estos países son mayores.

Authors: Wendy Ovando Aldana, Rosa AzaleaCanales García and Gabriela Munguía Vásquez
Spanish Title: Comercio Interregional de Bienes Manufacturados en los Países de la Alianza del Pacífico desde la Teoría de Linder
Full document: 2017, Ovando et al, Comercio Interregional de Bienes Manufacturados en los Países de la Alianza del Pacífico desde la Teoría de Linder

August 13, 2016by Ana Maria Palacio
English, Working Papers

The Pacific Alliance and its Economic Impact on Regional Trade and Investment –Evaluation and Perspectives

Abstract:
The entry into force of the Additional Protocol of the Framework Agreement of the Pacific Alliance in May 2016 marked an important step towards the regional integration efforts of its four members: Chile, Colombia, Mexico and Peru. In addition to promoting trade and investment linkages among its members, a core objective of the Pacific Alliance —and what distinguishes it from other regional integration efforts in Latin America— is to serve as a platform for economic and commercial integration between Latin America and the Asia-Pacific. It is, therefore, of particular interest to evaluate current economic developments taking part in modern Latin America and their impact upon these integration efforts.

The data of bilateral flows of trade in goods at the product and sector level, together with the study of trade in services as well as foreign direct investment, reflect the strong links within the Pacific Alliance. It also reveals the potential to further increase its members’ participation in regional and global value chains.

The Additional Protocol will serve not only to eliminate tariffs for nearly 95% of intraregional imports but also to foster economic integration through cumulation of origin and trade facilitation.
The Pacific Alliance faces several challenges in the medium-term. First, it must successfully incorporate Costa Rica as a full member, the first accession since the Pacific Alliance was established.
Further, it must define how to fulfil one of its driving forces: to serve as a bridge between Asian and Latin American countries on both sides of the Pacific.

Authors: José Durán Lima and Daniel Cracau
Institutional author: Economic Commission for Latin America and the Caribbean (ECLAC)
Full document: 2016, Duran & Cracau, The Pacific Alliance and its economic impact on regional trade and investment

March 10, 2016by Ana Maria Palacio

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Hello my name is Ana Maria Palacio. I have a PhD from the University of Melbourne. This blog is about my thesis project, the Pacific Alliance.

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