Latin America’s Advanced Industry Decline: What Explains the Region’s Poor Performance in Growing, or Even Retaining, Its Global Competitiveness in Advanced Industries?

The 1990s were a time of economic optimism for much of Latin America. Incomes were rising, industries were becoming more competitive on the global stage and much of the region was gradually building up an advanced industry base. Today, at least with respect to advanced industry competitiveness, the picture is less than rosy. The region has lost global market share in advanced industries, losing out on the jobs, exports and incomes associated with that. Some of that lost opportunity stems from the failure of many nations in the region to make the right economic and trade policy reforms. But much of it comes from China’s mercantilist trade and economic policies which made it virtually impossible for Latin America to grow its advanced industries. China’s unfair growth sucked the air out of regions nascent advanced industry growth shoots, with the result that the region is now extremely weak.

But as Rob Atkinson writes in Latin Trade Magazine, using OECD data available on seven Latin America nations (Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Peru) that collectively account for around 90% of the region’s GDP, the data shows that the region’s relative performance in advanced industries is weak and declining, especially over the last 15 years.