The last decade has seen a significant increase in the exports of several Latin American and Caribbean countries to destinations within and beyond the region. The increase in trade links has not, however, been accompanied by a proportional increase in reciprocal investments among the trading partners. This precludes making the most of clear advantages, including the possibility of diversifying and upgrading trade links by overcoming trade barriers imposed by distance and cultural differences, and by the greater availability of capital and knowledge flowing to recipient countries. In these countries, there is the additional creation of new jobs and the mitigation of the social costs generated by mismatches in labor markets that are the result of trade and integration among sometimes widely differing trading partners.
It is also worth remembering that the increase in trade ties and the behavior of investors show important differences among Latin American and Caribbean subregions alike, and also in relation to the rest of the world. From the region’s point of view, these differences are reflected in various different patterns of specialization and modalities of international integration, each of which opens up real and, above all, potential spaces for cooperation and mutual learning. The most dynamic in the last decade has been the export of resource-intensive goods, with low -albeit variable- degrees of processing.
In essence, this pattern of trade relations links several South American economies with Asia and, especially, China. So far, as we have said, reciprocal investments among trading partners do not reach significant amounts. In the South American countries, there have been some attempts at partnership agreements between local companies that exploit these resources and foreign partners, as well as various investment proposals to improve export infrastructure -mainly in power, roads, railways, and ports. In countries of destination, South American investments have been geared to supporting the internationalization of some of their companies, enhancing their marketing channels and networks, and starting up so far minor added-value operations.
Within this framework, the purpose of this 35th issue of the Integration & Trade Journal is to reflect on the Latin American and Caribbean countries’ various patterns of specialization and modalities of international integration, with especial emphasis on countries whose exports are, for the reasons stated above, based on natural resources. The basic idea has been to bring together works that address these recent developments from a variety of approaches and on various levels of analysis.