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Latin American Agriculture in a World of Trade Agreements
Author(s) -
Josling Tim,
Paggi Mechel,
Wainio John,
Yamazaki Fumiko
Publication year - 2015
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aau116
Subject(s) - international trade , latin americans , free trade , international free trade agreement , trade diversion , international economics , china , european union , rules of origin , general partnership , trade barrier , business , transatlantic trade and investment partnership , market access , commercial policy , bilateral trade , agriculture , economics , geography , political science , archaeology , finance , law
Latin American and Caribbean (LAC) countries are members of 29 distinct free trade agreements with other Latin American partners, and 44 such agreements exist between an LAC country and other countries. Among the LAC countries linked by an Free Trade Agreement (FTA), a large percentage of trade is already duty free though many trade barriers in agriculture persist. There is a significant difference in the trade patterns among the LAC countries. The Southern Cone countries, for example, have extensive agricultural exports to Asia and to the European Union (EU), and have few FTAs with regional countries. By contrast, countries in Central America and the Andean region have extensive trade agreements with each other, and have fewer exports outside the region. Meanwhile, other regions are negotiating ambitious mega‐agreements, particularly the Trans Pacific Partnership (TPP) and the Trans‐Atlantic Trade and Investment Partnership (T‐TIP). These could have significant impacts on the region, including trade diversion and preference erosion in major import markets. Several possible avenues exist for Latin American countries to accomplish the following: counter the impact of a TPP and T‐TIP on agricultural exports; strengthen existing bilateral trade agreements within the region; link existing multi‐country agreements such as Mercado Común del Sur (MERCOSUR) and the Pacific Alliance to North American Free Trade Agreement (NAFTA); consolidate the current trade agreements with the EU; or “sign on” to the TPP. This last option would be more attractive if China were to become a TPP participant. If China is not interested in joining the TPP, then for some countries a direct FTA with China could be contemplated.