CEPAL Review

Cepal Review is the leading journal for the study of economic and social development issues in Latin America and the Caribbean. Edited by the Economic Commission for Latin America, each issue focuses on economic trends, industrialization, income distribution, technological development and monetary systems, as well as the implementation of economic reform and transfer of technology. Written in English and Spanish (Revista de la Cepal), each tri-annual issue offers approximately 12 studies and essays undertaken by authoritative experts or gathered from conference proceedings.

English Spanish

Chile and its “lateral” trade policy

This article looks at the bases, objectives and results of the “lateral” trade policy adopted by Chile in the 1990s. In particular, it seeks to give a clearer idea of the role of bilateral agreements and to incorporate into the discussion the empirical evidence observed in the case of Chile. It concludes that the criticisms levelled at this policy, especially by those who advocate unilateral trade openness rather than other options, are based on an incomplete analysis of basic international trade theory. It is therefore argued that the economic concepts taken into account in evaluating the economic and political rationality of this strategy must be expanded to acknowledge the complementarity of the available options and to incorporate the analysis of game theory, the existence of economies of scale, the transaction costs existing in the functioning of international markets, and foreign policy elements. Through this multidimensional strategy, Chile has sought to overcome various problems and to stimulate the areas of its economy which have been most dynamic in the 1990s: exports of products with greater added value, services and capital. By traditional standards of appraisal, the results obtained do not reflect any negative impacts but they do show positive effects.

English Spanish

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