Andean countries at a crossroads: Evaluating pro-poor trade integration options

The Andean countries are currently re-evaluating their trade integration strategies in the light of mounting social demands. The policy challenges thereby posed, which are now at the heart of the countries’ development agendas, date back to the early 1990s when the Andean countries began to liberalize their trade regimes and participate in regional integration schemes. While moving forward in the area of trade and integration, however, these countries, like others in Latin America, did not sufficiently examine the impact these policies would have on poverty, income inequality and social cohesion. In fact, despite significant economic growth resulting from trade in recent decades, the Andean countries are still grappling with persistent poverty and highly inequitable income distribution. Social benefits from integration policies have lagged relative to other Latin American countries (ECLAC, 2006). As a result, the challenge of maximizing the social benefits from trade and integration strategies now constitutes a major pillar of the countries’ development agendas.

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