Trade exchange in the region reaches 47% of GDP

He International Monetary Fund (IMF) warned that most Latin American and Caribbean countries are not “taking advantage of the full potential of international trade,” considered by the organization as an important engine of growth in emerging markets.

The international organization assures that although the region has made some progress in terms of trade openness, remains held back mainly by poor infrastructurecumbersome customs procedures and relatively high tariff and non-tariff barriers to trade.

Thus, the sum of exports and imports of goods and services, an important indicator of trade openness, amounts to only 47% of the gross domestic product (GDP), approximately 20 percentage points below its level in other emerging markets around the world.

They also warn that “trade between the countries of the region is lagging behind below 20% of the total trade of Latin America.” This is equivalent to less than half the level of intraregional trade in Eastern Europe and Central Asia, and a third of that in East Asia.

“Latin America’s participation in global value chains is equally limited. This is because many countries are more focused on the export of raw materials than on intermediate or final goods, although the much more integrated Mexican economy is a noteworthy exception, mainly due to its close ties with the United States. ”, maintains the IMF.

Reduce obstacles

For the organization, Latin America would obtain great economic benefits if commercial infrastructure is improved transportation and customs. Among the suggestions are simplifying customs procedures, promoting public-private partnerships in the logistics sector and “reducing bureaucratic obstacles.”

The greater demand for products from the region would increase GDP by up to 7%.

The data

Impact. Halving the infrastructure gap between the region and advanced economies could reduce trade costs and increase exports by 30%.