Trade Agreements Of Latin 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. When the trade boom began in the early 1990s, Latin America`s production economy began to decline steadily. This is not only the basis of trade agreements – China`s rise has been the main driver of this change, because it has bought raw materials to avoid its growth and flooded the global market with cheap manufactures – but they have played a role. World Bank data show a downward trend in the region`s manufacturing industry as a percentage of GDP, which is only 13.72 per cent in 2016, up from an average of 24.5 per cent in 1989. The biggest challenge for UK plc is to successfully manufacture and sell the products and products that Latin America wants. Brazil is currently Britain`s largest trading partner, but the target is only 0.63% of exports. Mexico stands at 0.42%, followed by Chile with 0.15%. Meanwhile, the UK`s largest import source is Brazil with 0.51%. A trade deal would be nice, but as China has shown, you can do good business with Latin America without an agreement. The evidence is mixed here.
For example, in 2016, goods traded under NAFTA increased to $1.1 trillion from $191 billion in 1993, an increase of 267%. This is impressive, of course — but less so when you consider that U.S. trade with non-NAFTA countries has increased by 242% over the same period. The strong Latin American presence within the CPTPP continues a long tradition of free trade agreements with non-Latin American countries and regional trading blocs. In Latin America, Mercosur is the largest bloc whose full members are freely negotiable, Argentina, Brazil, Paraguay and Uruguay, and implement common external tariffs on imports from outside the bloc. They have a common GDP of $2.9 trillion. In addition, free trade agreements lead to an increase in foreign direct investment, attracted by free access to the ESTV Member States. For example, Japanese automakers can set up plants in Mexico because NAFTA allows them to export goods to the United States duty-free. For Latin American countries, historically isolated from global trade routes and with a productivity deficit, free trade agreements can act as catalysts for investment and productivity growth. This study contributes to the understanding of bilateral trade relations between China and Latin American countries and demonstrates the extent of the effects of free trade agreements.