By: Staff Writer
February 5, 2021
Regional trade for the Caribbean is projected to fall by 20 percent in a “worrying” report from the United Nations Economic Commission for Latin America (ECLAC) and the Caribbean details and urges greater trade facilitation within the region.
ECLAC, in their report titled “International Trade Report for Latin America and the Caribbean,” said: “For the year overall, the Economic Commission for Latin America and the Caribbean (ECLAC) projects falls of 13% and 20%, respectively, in the value of regional exports and imports of goods. Intraregional trade, which will be particularly badly affected, is projected to fall by 24% in value terms, with highly adverse impacts on the region’s manufacturing exports.”
The also estimate that the region’s trade performance is worst since the global financial crisis of 2008/2009, something they have blamed on the COVID-19 pandemic as governments worldwide have struggled to combat the spread of the disease through closing borders and other various means of economic shutdowns.
The report also said that intraregional trade was falling since 2014 and is projected to fall by another 12 percent in 2020 as the value chains are limited and concentrated in a few countries.
To help with greater trade facilitation, ECLAC proposes targeting three fronts: convergence in trade facilitation; improvement of regional transport and logistics infrastructure to support a shift in investment towards more resilient, efficient and sustainable works; and cooperation on digital matters.
The report also said, “Between January and July, there were sharp falls in the value of shipments from Latin America and the Caribbean to the United States (-20 percent), the European Union (-15 percent) and especially within the region itself (-27 percent). By contrast, shipments to Asia have shown greater resilience (-5 percent). In particular, exports to China increased by 1 percent. The contraction in intraregional trade has been particularly evident in manufacturing. The sector that has been hit hardest is the automotive sector, with a fall of around 55 percent in the value of intraregional exports in the first half-year, followed by the textiles, clothing and footwear sector (down 37 percent). Trade in agro-industrial products alone recorded a modest expansion (3 percent). As a result, the intraregional trade ratio fell to 12 percent, its lowest value since 1990.
There was some improvement in in both exports and imports in goods for the month of June, 2020 with stronger performance for goods.
To deal with this precipitous drop, ECLAC proposes several things regional government’s must do in order to stop the slide.
ECLAC at first encourages regional governments to increase gender equality, for which the report said essentially that the increase in diversity has been significantly correlated with an increase in economic performance, particularly with a “persistent sexual division of labour.”
