Latin American and Caribbean trade in 2016 and 2017 amid the tensions of globalization

The 2017 edition of Latin America and the Caribbean in the World Economy reviews international and regional developments from a trade perspective. Globalization has become increasingly questioned in the past few years, particularly in the developed countries. The slowdown in trade, foreign direct investment and other financial flows reflects lacklustre global economic growth in the post-crisis period and has led to high unemployment and wage stagnation, particularly in Europe. In this global context, Latin America's participation in the global economy continues to lag: its share in global exports of goods and services remains stagnant and it has lost ground in trade of high-technology goods and modern services. Although the share of Latin America and the Caribbean in global foreign direct investment flows has risen, its low-technology specialization has deepened. The region’s participation in global value chains has increased this century, but remains below the global average and consists mainly of providing raw materials for third countries’ exports. Poor digital connectivity also hampers the region’s capacity to enter new dynamic sectors. Amid still-sluggish regional and global economic growth, the Latin American and Caribbean region’s exports and imports will fall for the fourth year running in 2016. Thereafter, a modest upturn is projected in regional trade in 2017-2020.