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Does tariff liberalization promote trade? Latin America in the long run (1900-2000)

Author

Listed:
  • Carlo Pietrobelli
  • Silvia Nenci

    (Department of Law, Università degli Studi Roma Tre)

Abstract

This paper estimates the effect of trade liberalisation on import performance of selected Latin American countries. The novelty of this study is that it applies a long-term approach covering the whole XX century using times series and panel data analyses. The empirical exercise shows that the relationship between tariffs and import growth in Latin America cannot be taken for granted - as it often happens – and anyway that it is not always quantitatively substantial. In particular, our analysis shows the existence of a long run relationship between tariffs and imports only from the second half of the XX century. It follows that trade liberalisation appears effective in fostering Latin America's trade growth only when integrated within a wider process, implying a multilateral and negotiated approach to trade policy. In this sense, multilateral and regional agreements (e.g. Mercosur) appear to have played a key role not only through tariff reduction but remarkably thanks to the creation of a rule-based system governing global trade relations. This result would confirm the thesis of those who endorse the existence of a formalized trading system to guarantee tariff liberalization and foster trade growth.

Suggested Citation

  • Carlo Pietrobelli & Silvia Nenci, 2007. "Does tariff liberalization promote trade? Latin America in the long run (1900-2000)," Working Papers 0704, CREI Università degli Studi Roma Tre, revised 2007.
  • Handle: RePEc:rcr:wpaper:07_04
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Tariffs liberalization; trade growth; trade integration process; time series; Latin America;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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