On the macro and microeconomic determinants of Latin America Protectionism: An Exploratory Note

Lima

Conferencia; Analyzing Contemporary Protectionism: Implications for Latin America; 2012

Center por Economic Policy Research (CEPR)- Latin American Trade Network (LATN)

The aim of this study is twofold. First, to provide a brief and updated description of the stock of discriminatory policy instruments in Latin America and the sectors on which these measures are more likely to be imposed. Second, to develop an empirical model exploring the determinants of the measures that Latin American countries recently imposed on different trading partners. Despite the growing performance of the economies after 2008 global financial crisis, the paper finds an increase in the use of discriminatory measures. In the post-crisis period, Latin American economies did not lower their tariffs and feel the pressure to raise them, but intra-industry trade is not associated with an increase in tariffs. While exporting sectors in Brazil?s partner countries appear to have a strong influence on lowering Brazilian tariffs ant this source of anti-protectionism is also evident in Bolivia, Ecuador and México, and to a lesser extent Paraguay, Peru and Venezuela, in the case of Argentina, Chile and Uruguay, domestic exporters are the prime movers in demanding a lower protection on imported goods they intensively use.