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IDB report shows 1999 growth of trade within the Americas

Trade within the Americas will grow by 2 percent during 1999, according to preliminary estimates released by the IDB’s Integration and Regional Programs Department in the October 1999 issue of its Periodic Note on Integration and Trade in the Americas.

As has been the case throughout this decade, intrahemispheric exports have remained more dynamic than the hemisphere’s total exports, whose value in 1999 will not exceed that registered in 1998. The continued expansion of trade within the hemisphere is largely explained by growing exports to and within both North American Free Trade Association and the Central American Common Market. Meanwhile, the value of intraregional exports in the Latin American Integration Association (ALADI), Mercosur and the Andean Community is estimated to have declined this year by roughly 30 percent in all three integration groups.

In addition to examining the evolution of trade flows in the Western Hemisphere in 1998 and presenting preliminary estimates for 1999, the Periodic Note also reviews recent advances in all major trade and integration agreements/discussions in the Americas, including those with partners outside the hemisphere.

The report provides a detailed discussion of recent, and very significant, developments that have occurred in regional and subregional integration in the Americas, including the on-going process of the Free Trade Area of the Americas. Multiple trade and integration agreements have led to a substantial liberalization of intra-regional trade flows in the Americas. As a result, the share of intrahemispheric exports grew from 47 percent of total exports in 1990 to 58 percent in 1998. Major advances have also occurred in other areas of integration, including institutional development, trade rules, and infrastructure. Nonetheless, much remains to be done, particularly in macroeconomic convergence and coordination, as well as in managing the protectionist pressures that arise from domestic sectoral and macroeconomic imbalances.

The countries of Latin America and the Caribbean have also sought to strengthen their trade relationship with partners outside the hemisphere. This area of integration widening is also examined in the Periodic Note. While three countries of the region are now members of the Asia-Pacific Economic Cooperation forum, most Latin American and Caribbean countries, either individually or in groups, are discussing a wide range of issues, including the liberalization of trade, with the European Union.

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