International Trade

Working Paper - Link (English) - 2024

United States-Latin America and the Caribbean Trade Developments provides an overview of selected developments in trade relations between the United States and Latin America and the Caribbean.

Journal Article - Link (English) - 2024

This article investigates export competition between China and Latin America and the Caribbean (LAC) in the United States market between 2002 and 2022. Using a sample of 33 exporters and 10-digit Harmonised Tariff Schedule (HS) data, a structural gravity model is estimated. A first-order Taylor-series expansion à la Baier and Bergstrand (Journal of International Economics, 2009a, 77, 77) is used to approximate the multilateral price terms pointed out by Anderson and Van Wincoop (American Economic Review, 2003, 93, Article 1). The results show that the impact of Chinese exports on United States imports from LAC is negative and statistically significant across several model specifications, levels of aggregation, and sectors. A percentage increase in imports from China decreased imports from LAC by 0.75%. The displacement effect is 0.32 for manufacturing products, 1.01 for resource-based products, 1.33 when estimated only for South America, 0.25 for the Caribbean, and not significant for Central America.

Book Chapter - Link (Spanish) - 2024

This chapter analyzes the impact of the U.S.-China trade tensions on the displacement of LAC's exports by China in the U.S. market. Using an augmented gravity model of trade, the degrees of displacement before and since the beginning of trade tensions are estimated and subsequently investigated for structural breaks. The model features both non-linear and linear fixed effects specifications to account for endogeneity, zero trade flows, and multilateral resistance terms (MRTs). The LAC region is represented by thirty-three countries. The analysis makes contributions to three strands of literature. Firstly, the assessment of the impacts of the trade dispute on export competition adds to the literature on economic spillover effects following geopolitical tensions. Secondly, the estimation of the displacement effect contributes to the work on export competition between LAC and China in the U.S. market. Thirdly, the estimation strategy and gravity model results add to the wider augmented gravity model literature on Chinese export competition.

Working Paper - Link (English) - 2023

United States-Latin America and the Caribbean Trade Developments provides an overview of selected developments in trade relations between the United States and Latin America and the Caribbean.

Working Paper - Link (English) - 2022

This paper uses an augmented gravity trade model to examine the impact of Chinese exports to the United States on Latin America and the Caribbean (LAC) exports to the same market over the last two decades. The analysis relies on a sample of 33 LAC countries and trade data disaggregated to the 10-digit Harmonized Tariff Schedule (HTS) level. The results show that the impact of Chinese exports on US imports from LAC is negative and statistically significant across model specifications and levels of aggregation in the trade data. The estimations show a displacement of LAC exports by China’s exports in the period under analysis of between 0.25 and 1.26 percent per percentage change in Chinese exports. In addition, the model suggests that after accounting for such export competition, Free Trade Agreements with the United States, on average, increased imports from LAC countries by up to 1.5 percent. That is, countries with a trade agreement with the US have an advantage over those without, particularly in the manufacturing sector.

Working Paper - Link (English) - 2021

This research examines the export trajectory of Latin America and the Caribbean in the U.S. market over nearly two decades following China's accession to the WTO, comparing it with China and other regions. Using product-level import data from the U.S. Census Bureau, covering over 30,000 products annually from nearly 200 countries, the study finds that most Latin American countries lost market share between 2002 and 2018. Mexico, however, increased its share by 17 percentage points. Asia, now the second-largest exporter region to the U.S. after the OECD, significantly increased its market presence. China and Mexico gained the most market share. Additionally, Latin American exports differ from China's in the U.S. market, suggesting limited direct competition. Latin America also specializes more in high-value segments than China.

Journal Article - Link (English) - 2015

The role of China in the world economy has grown substantially in recent decades, turning it into a strategic trading partner for much of Latin America (bilateral trade totaled US$120 billion in 2009). This article analyzes the income elasticity of the region’s exports to China. The findings show that assuming a GDP growth in China of about 7% per year, the value of Latin American exports to China (at 2005 prices) can be expected to increase by an average of 10% per year between 2014 and 2019. In a more conservative scenario of 4.5% average annual growth in the Chinese economy, exports would rise by about 7% per year.