Trade and Integration Monitor 2017: Beyond the Recovery: Competing for Market Share in the Digital Era

Abstract

Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. The report argues that, having overcome the longest trade contraction in recent history, the outlook for LAC countries is substantially less favorable than the one that prevailed before the crisis. In this context, the region's competitiveness limitations become more pervasive and magnify the impact of exogenous factors, such as the decline in commodity prices and the emergence of protectionist tendencies that could restrict access to key markets. The value of exports from Latin America and the Caribbean (LAC) started to recover in 2016, and increased a notable 13.2% year-on-year in the first half of 2017. The regional recovery, however, was driven by a volatile increase in prices associated with a fragile expansion of export volumes, concentrated moreover in a few economies.Despite the recent trend reversal, in a medium-term perspective, the region has lost participation in several markets, particularly the intraregional one, and mostly due to low competitiveness. Coming out of the longest trade recession in its recent history, LAC faces a global scenario in which the tailwinds that sustained the pre-crisis growth have run out, and uncertainty regarding access to external markets has increased. This outlook underscores the urgent need of adopting policies to stimulate productivity and improve the region's competitive position in international markets, and to take advantage of the opportunities generated by disruptive technologies such as electronic commerce.This edition of the Trade and Integration Monitor identifies the factors that drove the recent recovery in LAC exports, examines their sustainability and, looking forward, maps the region's competitiveness in the digital era.The recovery of regional exports of goods has been primarily driven by a rebound in commodity prices, while trade in services has been displaying greater resilience. Projections for the second half of 2017 nonetheless point to a growth slowdown.LAC benefited from increases in the price of oil and other mineral commodities, but From a medium-term perspective, Latin American and Caribbean expor...

Digital trade in Latin America: mapping issues and approaches

“…This is one of the major challenges that emerges from the interviews and is addressed in the recommendations of the Americas Business Dialogue 2018-2021. These findings for e-commerce match many of the interviewees comments and regional studies (Giordano et al , 2017), according to whom the countries in the region face significant hurdles for the development of modern institutional and regulatory frameworks that favor the development of the digital economy. A first look at the regional environment regarding data protection laws and general freedom (Appendix), to address two of these dimensions from UNCTAD (2015), suggests that these correlate with “trade facilitation performance” as measured by the OECD, 2017 in the same Appendix.…”

“…14. 59% (17) of the free trade agreements from countries in LAC contain rules regarding electronic commerce. These provisions are not usually found in special e-commerce chapters, but are incorporated into chapters related to trade facilitation and customs administration (Giordano et al , 2017). …”

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