IADB: Trade liberalisation has boosted LatAm and Caribbean economies
The Latin America and Caribbean region saw faster economic and wage growth thanks to a lowering of trade barriers, a new report by the Inter-American Development Bank shows.
The average tariff cut of 56% that took place in the region between 1990 and 2010 accelerated the region’s average annual per capita GDP growth by 0.6 percentage points. While the results are positive, the region harbors skepticism on the benefits of more openness, in part because initial expectations were so high, according to Trading Promises for Results: What Global Integration Can do for Latin America and the Caribbean.
The study also provides policy recommendations to ensure the region is better positioned to take advantage of trade liberalization and make its benefits more tangible to citizens.
The report looked at the level of support for free trade. Latin Americans back more trade by big margins though support drops sharply when presented with information emphasizing negative consequences such as job losses in vulnerable sectors.
Almost three out of every four of those surveyed said they favoured increasing trade with other countries, with support running highest in Venezuela, Honduras and Uruguay. Almost six out of every ten Latin Americans equate trade with more jobs. However, providing information about potential job losses in vulnerable sectors reduced support for trade to 46%, from 73%.
