Central America, Panama, and the Dominican Republic: Trade Integration and Economic Performance
IMF Working Papers, September 27, 2012
Source details
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- Central America, Panama, and the Dominican Republic: Trade Integration and Economic Performance
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Bibliographic details
- Authors: Andrew J Swiston, Luis D Barrot
- Published: September 27, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475510843.001
Summary / Main findings
- The paper studies the potential for the export sector to play a more important role in promoting growth in Central America, Panama, and the Dominican Republic (CAPDR) through deeper intra-regional and global trade integration.
- CAPDR countries have enacted many free trade agreements and other regional integration initiatives in recent years, but their exports remain below the norm for countries of their size.
- Several indexes of outward orientation are constructed and suggest that:
- The breadth of geographic trading relationships in CAPDR is less conducive to higher exports and growth than in fast-growing, export-oriented economies.
- The depth of integration into global production chains in CAPDR is less conducive to higher exports and growth than in fast-growing, export-oriented economies.
- The degree of technological sophistication of exports in CAPDR is less conducive to higher exports and growth than in fast-growing, export-oriented economies.
Indexes, metrics, and analytical approach
- Multiple indexes of outward orientation are constructed to evaluate:
- Geographic breadth of trading relationships.
- Depth of integration into global production chains.
- Technological sophistication of exports (sophistication index, structure variable).
- Export performance is assessed relative to norms for countries of comparable size and relative to fast-growing, export-oriented economies.
Policy recommendations
- To boost exports and growth, CAPDR should implement policies to facilitate economic integration, particularly:
- Building a customs union.
- Harmonizing trade rules.
- Improving logistics and infrastructure.
- Enhancing regional cordination.
Keywords and subject areas emphasized
- Subjects: Customs unions, Economic integration, Exports, International trade, Regional integration, Service exports, Tariffs, Taxes
- Keywords: CAPDR country, CAPDR economy, CAPDR trade, CAPDR's export, Central America, Costa Rica, country, Customs unions, Dominican Republic, East Asia, Economic growth, El Salvador, export, export ratio, export structure variable, Exports, exports of manufacture, exports-to-GDP ratio, Free trade agreements, Global, Guatemala, Honduras, Integration, Nicaragua, outward orientation, Panama, Regional integration, Service exports, services export, sophistication index, structure variable, Tariffs, WP