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China and Latin America and the Caribbean: Exports competition in the United States market

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China and Latin America and the Caribbean: Exports competition in the United States market

Author: Artecona, Raquel - Perrotti, Daniel E. - Welslau, Lennard Physical Description: 42 p. Editorial: ECLAC Date: October 2022 ECLAC symbol: LC/WAS/TS.2022/4

Description

This paper uses an augmented gravity trade model to examine the impact of Chinese exports to the United States on Latin America and the Caribbean (LAC) exports to the same market over the last two decades. The analysis relies on a sample of 33 LAC countries and trade data disaggregated to the 10- digit Harmonized Tariff Schedule (HTS) level. The results show that the impact of Chinese exports on US imports from LAC is negative and statistically significant across model specifications and levels of aggregation in the trade data. In addition, the model suggests that after accounting for such export competition, Free Trade Agreements with the United States, on average, increased imports from LAC countries by up to 1.5 percent. That is, countries with a trade agreement with the US have an advantage over those without, particularly in the manufacturing sector.

Table of contents

Abstract. -- Introduction. I. Export competition between China and Latin America and the Caribbean .-- II. Similarity of Latin American and Chinese export structures. -- III. Gravity models of trade. -- IV. Augmented gravity models and export competition. -- V. Estimation approach. --
VI. Data .-- VII. Results. A. Baseline gravity model. B. Specification tests. C. Instrumental variable results. D. Industry results .-- VIII. Conclusions.