Intra-Latin American trade in the 1990s and its analytical base
Deep trade reforms have been undertaken in Latin America as part of a broad-ranging process of change in which international competitiveness and exports play a leading role. Most countries are looking for export-led development. Nonetheless, in contrast with the experience of East Asian nations, the main instrument of trade reform has been a rather indiscriminate and rapid liberalization of imports (see Chapter 3; and ECLAC, 1995, ch. V). Most LACs introduced reforms that could be described as drastic and sudden. Generally speaking, the tariff protection provided at present differs considerably from its pre-reform levels, and the spread of rates of effective protection has diminished substantially. For instance, the simple average external tariff was reduced from 45 per cent by the mid-1980s to 13 per cent ten years later. No country has yet adopted a zero tariff rate, however. These regional trends in trade policy have been complemented by a drive towards implementing bilateral or multilateral free trade agreements, covering a wide spectrum of items. The fact that tariffs are different from zero but are at moderate levels leaves space for reciprocal tariff preferences but with more limited trade diversion than in earlier trade integration programmes.
KeywordsTrade Diversion Trade Reform Intraregional Trade Transitional Cost East Asian Nation
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