Presentation

The global trade performance in 2019 was the worst since the international financial crisis. Chapter I of this edition of International Trade Outlook for Latin America and the Caribbean analyses that performance, as well as the mounting trade tensions and their repercussions for the region’s own trade. The heavy slowdown in global trade is the result of the build-up of trade barriers since 2018, as well as longer-standing factors, including weaker global demand, increasing import substitution in some economies, the smaller share of Chinese production going for export, the shrinking of global value chains and the emergence of new technologies that impact the very nature of trade. The trade tensions reflect economic and technological competition between China and the United States, the rupture of the pro-globalization consensus of the 1990s and 2000s, and growing criticism of the functioning of the World Trade Organization (WTO). The uncertainty caused by the current tensions is adversely impacting the economies most bound into global value chains, especially in Europe and East Asia. In this context, the value of the region’s merchandise trade will likely drop by 2% on the export side and 3% in the import side in 2019, although this pattern will be highly uneven from one subregion to another. Meanwhile, the value of intraregional trade will tumble by some 10%, continuing the procyclical pattern of the region’s trade seen in recent years, whereby it amplifies the drop in the region’s overall exports.

Sustainable Development Goals:

Decent Work and Economic Growth

Industry, Innovation and Infrastructure

Reduced Inequalities