Saturday, September 20, 2014

Trade Within Latin America

Shannon O'Neil notes the increase in "South-South" trade, meaning between Latin American countries. Two points in particular are worth briefly expanding on:

First, it is true that trade with China with increasing. But so is trade with a lot of countries. If you cherry pick China numbers only, then you end up with all the op-eds about China gaining power (she does not actually make this point--it's just my pet peeve). When you look at the bigger picture, what you see is diversification, which is a positive development. As she notes, Latin America has more to gain with intra-regional trade than with China.

Second, the glass half empty part of the equation is that trade diversification is not the same as product diversification. While it's good to have more diverse trading partners, it's not as valuable in the long-term when you're exporting soy (or whatever) to all of them.


  © Blogger templates The Professional Template by 2008

Back to TOP