Trade Integration as a Pathway to Development?.

After a period of rapid economic growth associated with high commodity prices, the Latin America andCaribbean region has again entered a phase of lackluster performance. Overall this slowdown seems moreself-inflicted than imported, and the outlook for the region is not encouraging either. A tepid exportresponse constrains the prospect of growing through external demand whereas limited fiscal space leaveslittle room to stimulate domestic demand. The outlook could deteriorate further if the internationalenvironment became less conducive.This report explores whether inward-looking development strategies could be one of the reasons for slowgrowth in Latin America and the Caribbean. Trade barriers are higher than in other developing regions, andwhile numerous preferential trade agreements have been signed, many of them are intra-regional. Thereport shows that South-North agreements are associated with increases in economic complexity andfaster economic growth than South-South agreements. It illustrates the point by assessing the economic,social, spatial and environmental impacts of two major: South-North agreements signed over the last year.

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