ECLAC Notes Nº 34

Latin American and Caribbean Exports Grow by 8.3% in 2003 Costs and Benefits of Growing Trade with China OPINION: Repercussions of the Free Trade Agreement between Central America and the USA (CAFTA), by José Luis Machinea HIGHLIGHTS: Attracting FDI and Benefiting from It INDICATORS Environmental Problems and Small Businesses Incentives Work Better than Sanctions RECENT TITLES CALENDAR

ECLAC Notes Nº 48

International Trade from the Region Continues to Grow in 2006-2007 China and India: New Opportunities for Latin American Exports Op-ed by ECLAC's Executive Secretary, José Luis Machinea: ECLAC Urges Deepening of Regional Integration Highlights. Five Ways to Improve Poverty Programmes from a Social Capital Approach Indicators Women and Employment: Reform of the Health Sector in Argentina Recent Titles Calendar

Economic Survey of the Caribbean 2013: Improved economic performance with reduced downside risks

Includes bibliography.

United States Trade Developments 2012-2013

Includes bibliography.

Upgrading value chains through professional and supporting services: Lessons from three agro-industry chains in El Salvador and Guatemala

Includes bibliography

The international trade position of Argentina. Towards a process of export diversification?

Includes bibliography.

NAFTA's uninvited guest: China and the disintegration of North American trade

Includes bibliography.

The international asparagus business in Peru

Includes bibliography.

Institutionality, logistics and international cooperation for the economic and social development: The case of the Plurinational State of Bolivia

Includes bibliography.

Panorama da Inserção Internacional da América Latina e Caribe 2014: integração regional e cadeias de valor num cenário externo desafiante. Documento informativo

A edição 2014 do Panorama da Inserção Internacional da América Latina e do Caribe, “Integração regional e cadeias de valor num cenário externo desafiante”, se divide em quatro capítulos. O primeiro capítulo examina os principais aspectos da conjuntura internacional e suas repercussões no comercio mundial e regional. O segundo capítulo apresenta uma análise da participação da América Latina e do Caribe nas cadeias globais de valor. Esse capítulo também analisa três aspectos microeconômicos centrais relativos à contribuição que a participação nas cadeias de valor podería representar para a mudança estrutural com maior inclusão. O capítulo três identifica diversos âmbitos em que a integração e a cooperação regional podem contribuir para fortalecer a integração produtiva entre as economias da América Latina e do Caribe. Finalmente, o quarto capítulo analisa as relações intrarregionais e extrarregionais dos países da Comunidade do Caribe (CARICOM), considerando a necessidade de fortalecer a integração regional no âmbito produtivo mediante o aproveitamento de outros vínculos além dos meramente comerciais. Também se examinam as diferenças existentes entre os países em matéria de renda, população e estrutura produtiva e exportadora, no contexto de uma acentuada vulnerabilidade macroeconômica.

Panorama de la Inserción Internacional de América Latina y el Caribe 2014: integración regional y cadenas de valor en un escenario externo desafiante

La edición 2014 del Panorama de la Inserción Internacional de América Latina y el Caribe “Integración regional y cadenas de valor en un escenario externo desafiante”, se divide en cuatro capítulos. En el primer capítulo, se revisan los principales rasgos de la coyuntura internacional y sus repercusiones en el comercio mundial y regional. En el segundo capítulo se presenta un análisis de la participación de América Latina y el Caribe en las cadenas internacionales de valor. En este capítulo también se analizan tres aspectos microeconómicos centrales relativos al aporte que representa la participación en las cadenas de valor para el cambio estructural con mayor inclusión. En el capítulo tres se identifican diversos ámbitos en que la integración y la cooperación regionales pueden contribuir a fortalecer la integración productiva entre las economías de América Latina y el Caribe. Finalmente, en el cuarto capítulo se analizan las relaciones intrarregionales y extrarregionales de los países de la Comunidad del Caribe (CARICOM), considerando la necesidad de fortalecer la integración regional en el ámbito productivo mediante el aprovechamiento de vínculos más allá de los meramente comerciales. También se pasa revista a las diferencias existentes entre países en materia de ingresos, población y estructura productiva y exportadora, en el contexto de una marcada vulnerabilidad macroeconómica.

Latin America and the Caribbean in the World Economy 2014: Regional integration and value chains in a challenging external environment

The 2014 edition of Latin America and the Caribbean in the World Economy: Regional integration and value chains amid challenging external conditions has four chapters. Chapter I examines the main features of the international context and their repercussions for world and regional trade. Chapter II looks at Latin American and Caribbean participation in global value chains and confirms that the region, with the exception of Mexico and Central America, has only limited linkages with the three major regional value chains of Asia, Europe and North America. This chapter also looks at how participation in value chains may contribute to more inclusive structural change, by analysing three core microeconomic aspects. Chapter III identifies various spheres in which regional integration and cooperation can help strengthen production integration between the economies of Latin America and the Caribbean. The fourth chapter explores the intra- and extraregional trade relations of the countries of the Caribbean Community (CARICOM) and considers how to strengthen production integration in the subregion by taking advantage of linkages beyond trade and building on commercial and production complementarities among the members. The chapter also reviews the differences between the countries in terms of income, population and production and export structure, in a context of marked macroeconomic vulnerability.

Una promesa y un suspirar: políticas de innovación para PYMES en América Latina

A partir del levantamiento realizado en cuatro países de la región (Argentina, Colombia, México y Uruguay), el presente documento examina las principales reformas y políticas de innovación y pymes realizadas en los últimos años. De este análisis se desprende la escasa vinculación que existe entre estos ámbitos de acción, lo que, dados los rets que enfrenta el mundo de hoy, deben ser vinculados más estrechamente con la sustentabilidad ambiental.

Capital Flows to Latin America and the Caribbean: Recent Developments

For six years, the global economy has been driven by the U.S. Federal Reserve’s policies of easy money. Liquidity has flowed from developed to developing economies, financing infrastructure and corporate investment and allowing consumers to indulge in credit-fuelled retail spending. Thus the effective ending of the Fed’s third round of asset purchases (QE3) at the end of October represents both a watershed and the beginning of a new stage in the world economy. The end of asset-purchases comes at a challenging time for emerging markets, with China’s economy slowing, the Euro zone struggling to avoid a recession and the Japanese economy already in recession. The unwinding of the U.S. monetary stimulus, while the European Central Bank and the Bank of Japan step up their monetary stimulus, has underpinned an appreciation by the U.S. dollar, in which most commodities are priced. An appreciated dollar makes dollar-denominated commodities more expensive to buyers, thereby creating pressure for sellers to lower their prices. Latin American markets ended the third quarter of 2014 under pressure from a stronger U.S. dollar. In this changing external context, there are many signs that a slowdown in Latin American and Caribbean (LAC) financial markets, particularly debt markets, which have been breaking issuance records for the past six years, may slowdown from now on. Commodity prices – including those of oil, base metals and some goods – are in a prolonged slump. The Bloomberg commodity price index, a benchmark of commodity investments, has fallen to a five-year low as China’s economy slows down, and with it the demand for commodities. Investment into the LAC region has decelerated, in large part because of a deceleration of mining investments. Latin American currencies have suffered depreciations, as current account deficits have widening for a number of countries. And LAC companies, having issued record amounts of foreign currency bonds may now struggle to service their debt. In October, credit-rating agency Moody’s downgraded the bonds of Brazil’s Petrobras to tow notches above speculative grade because of the impact of falling oil prices and the weaker real on its debt. Growth prospects look brighter in 2015 relative to 2014, but a strengthening U.S. dollar, uneven global growth and weakness in commodity prices are skewing the risk toward the downside for the 2015 forecasts across the region. The Institute of International Finance expects the strengthening of the dollar to have a divergent impact across the region, however, depending on trade and financial linkages. The Institute of International Finance, Capital Flows to Emerging Markets, October 2, 2014. A stronger dollar lifts U.S. purchasing power, supporting exports, growth and capital inflows in countries with close trade links to the U.S. economy. However, rising dollar financing costs will increase pressure on countries with weak external positions. Given the effects of falling oil prices and a stronger dollar, some companies in the region, having issued record amounts of foreign currency bonds, may now struggle to service their debts. Prospects of Fed rate hikes resulting in tighter global liquidity amid the rapid rise in the corporate external bond stock has indeed raised concerns over some companies. However, there is still a shortage of bonds at a global level and the region still enjoys good economic policy management for the most part, so LAC debt markets may continue to enjoy momentum despite occasional bursts of high volatility – even if not at the record levels of recent years.

Latin America’s competitive position in knowledge-intensive services trade

This study presents a dynamic analysis of Latin America's competitiveness in trade in knowledge-intensive services. The methodology used to undertake this analysis is based on the Tradecan approach developed by the Economic Commission for Latin America and the Caribbean (ECLAC), which provides a means of assessing different countries' competitiveness by looking at their exports to the fastest-growing markets. (In the past, it has usually been applied primarily to exports of goods.) The results suggest that, although some Latin American countries have made inroads in knowledge-intensive service segments and have comparative advantages in them, the percentage of "rising stars" (dynamic sectors in which a country or region is gaining in market share) is still low, while there is a high percentage of "missed opportunities" (dynamic sectors in which a country or region is losing market share). This points up the existence of areas in which the region's competitive position is weak and in which policies are needed to leverage its competitive advantages and remove the obstacles that are holding it back from establishing a more advantageous position in knowledge-intensive service markets.