Fuelled primarily by the removal of tariffs, a LAC-FTA would also increase intra-regional trade in all products by an average of 3.5 per cent, or an additional $11.3 billion, based on 2017 flows. The increase in specific exports would go from 1 per cent in mines in Andean countries to 8 per cent in manufacturing in Mexico and 21 per cent in agriculture in Central America. ATRs are trade agreements – including free trade agreements and customs unions – involving two or more countries. Although the World Trade Organization (WTO) has a principle of non-discrimination between trading partners, ATRs are an exception: they are discriminatory in that they prefer access to non-signatory markets to signatories. In an increasingly practical scenario, the report argues that a regional agreement could prove to be an effective insurance policy against market losses. “Such a free trade agreement could mitigate up to 40 percent of the negative impact of global trade conflicts on LAC exports,” Estevadeordal added. The study shows that free trade agreements have positive effects on both bilateral trade flows and the number of products traded. Nevertheless, these effects are positive, but decrease over time. The authors confirm that these agreements have allowed for a substantial expansion of trade between Latin American economies and China and have become relevant to policy makers in terms of bi-regional relations. The rise of populism, President Donald Trump`s “Make America Great Again” mercantilism, the escalating trade war between the United States and China, and the fear of a global recession indicate a new protectionist era. Nevertheless, new trade agreements are still being signed, perhaps the largest in Latin America, where at least some politicians remain enthusiastic about free trade.
The region reflects the current pressure and the train on the conditions of globalization and on how the ideas that originally pushed it are launched. Three countries have concluded a free trade agreement with China, Chile (2005), Peru (2009) and Costa Rica (2010). Using an econometric estimate based on a gravity model, the authors expect to determine the impact of these agreements on both trade flows and products. The report acknowledges that this type of strategy is likely to raise skepticism about the difficulties faced by previous attempts to reach a single regional free trade agreement. It argues, however, that almost 90% of intra-regional trade is already tariff-free, providing a strong platform for the establishment of a regional free trade area. Moreover, the region has never been closer to the political consensus on the benefits of trade and integration. Lopez, D. and Munoz, F. (2020), “China`s trade policy toward Latin America: an analysis of free trade agreements policy,” Asian Education and Development Studies, Vol. before pressure. doi.org/10.1108/AEDS-08-2019-0133 Latin America and the Caribbean could add $11 billion in annual trade flows by mixing 33 separate agreements into a single regional free trade bloc, according to a study by the Inter-American Development Bank ( BD).
China`s emergence in the international trading system has shifted its focus, as the country has become one of the mayoral actors in international economic relations. By drawing preferential agreements, China is establishing a network of strategic partnerships around the world, including Latin America.