Abstract
The article discusses issues of international trade theory and current global economic trends to assess the possibility of developing the foreign economic sector in Latin America as a whole, and in particular, Peru. Using development statistics from the foreign trade sector, and considering global trends in international trade over the past decade, an attempt is made to assess the ability of Latin American countries to meet growing differentiated demand and thus specialize in advantageous sectors, allowing them to integrate into global supply chains by providing resources, goods, and services at primary, secondary, and tertiary market levels. By examining the potential of Latin American countries, there is a real possibility of creating value chains around market niches that exist in global trade and applying them to ensure that Latin American products receive international recognition. In this context, the analysis of the dynamics of trade exchange is taken as a basis for comparing Peru with other countries, since according to the IMF, in recent years, Peru is one of the countries with the highest economic growth forecast in Latin America. Peru has great potential in mining (in Ankash, Arequipa and Junin, among other places), commercial fishing (Ankash, Liberty, Piura and others), agriculture (Piura, Liberty, Ica and others), camelid breeding (vicuña, alpaca, etc., in Puno, Junin, Cuzco) and other activities. In 2018, Peru managed to raise total exports up to $47.7 billion USD (+7.5% from 2017), thus achieving a historic record for Peruvian exports. This growth is explained by noticeable growth in the non-traditional sector, which reached $13.2 billion (+12.6% from 2017). The present study uses the theory of comparative advantage to quantify product competitiveness based on global comparison, which helps indicate how to move towards higher levels of specialization in the production and export structure. To analyze international trade data, we used indicators such as the Balance of Trade and the Balassa Index, which allowed us to determine a list of thirty products, of which twenty (traditional and non-traditional) showed a steady increase in exports, and the other ten, mainly non-traditional, despite being lower in ranking, have greater potential for further growth.
Highlights
Despite significant macroeconomic gains recorded over the past decade, the economy still has not broken out of its middle-income trap or significantly elevated its median income range
The progress made by the country in terms of new exported goods and target markets is based on the wide network of trade agreements reached by Peru, such as free trade agreements with the United States, the European Union, China, Mexico and Chile, in particular, which allowed preferential access to Peruvian products, mostly not traditional
In this regard, according to MINCETUR (2017), 89% of Peruvian exports were covered in 2017 by international trade agreements; diversification is an unresolved topic for launching other engines for the economy
Summary
Despite significant macroeconomic gains recorded over the past decade, the economy still has not broken out of its middle-income trap or significantly elevated its median income range. The implementation of structural reforms related to further diversification of the economy in more promising sectors will lead to an increase in new highly qualified jobs and an increase in value-added exports, which will reduce dependence on external demand for raw materials (Lauterbach, 2015). In this context, and given the current composition of the Peruvian export basket, this study seeks to identify export products with potential for international trade. Evaluated secondly are products that have the smallest share in the export basket, but which can continue to grow and gain market dominance over time
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