Latin American Agriculture in a World of Trade Agreements

Latin American and Caribbean (LAC) countries are members of 29 distinct free trade agreements with other Latin American partners, and 44 such agreements exist between an LAC country and other countries. Among the LAC countries linked by an Free Trade Agreement (FTA), a large percentage of trade is already duty free though many trade barriers in agriculture persist. There is a significant difference in the trade patterns among the LAC countries. The Southern Cone countries, for example, have extensive agricultural exports to Asia and to the European Union (EU), and have few FTAs with regional countries. By contrast, countries in Central America and the Andean region have extensive trade agreements with each other, and have fewer exports outside the region. Meanwhile, other regions are negotiating ambitious mega-agreements, particularly the Trans Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (T-TIP). These could have significant impacts on the region, including trade diversion and preference erosion in major import markets. Several possible avenues exist for Latin American countries to accomplish the following: counter the impact of a TPP and T-TIP on agricultural exports; strengthen existing bilateral trade agreements within the region; link existing multi-country agreements such as Mercado Común del Sur (MERCOSUR) and the Pacific Alliance to North American Free Trade Agreement (NAFTA); consolidate the current trade agreements with the EU; or "sign on" to the TPP. This last option would be more attractive if China were to become a TPP participant. If China is not interested in joining the TPP, then for some countries a direct FTA with China could be contemplated.