China’s trade policy towards Latin America: an analysis of free trade agreements policy
Asian Education and Development Studies
ISSN: 2046-3162
Article publication date: 3 June 2020
Issue publication date: 18 June 2021
Abstract
Purpose
The emergence of China in the international trading system has shifted its gravity center, as the country has become one of the mayor actors in international economic relations. Through the subscription of preferential agreements, China is building a network of strategic partnerships worldwide, including Latin America. The purpose of this paper is to answer the questions: Do free trade agreements (FTAs) between China and Latin American countries contribute to expand trade flows and enhance products diversification?
Design/methodology/approach
Three countries have an FTA with China, Chile (2005), Peru (2009) and Costa Rica (2010). Through an econometric estimation based on a gravity model, the authors expect to determine the impact of these agreements over both trade flows and products.
Findings
The study shows that FTAs have a positive impact on both bilateral trade flows and on the number of exchanged products. Nevertheless, this impact is positive but diminishes in time. The authors confirm that these agreements allowed for a substantive expansion of trade between Latin American economies and China, becoming relevant for policymakers regarding the bi-regional relation.
Originality/value
The study contributes to the understanding of the bilateral trade relations between China and Latin American countries, giving evidence of the magnitude of the impact of FTAs. Through new data, at a six-digit level of detail, this study improves current knowledge regarding bilateral economic relations.
Keywords
Acknowledgements
Funding: FDDI–Fudan University FDDI Visiting Scholar Fellowship and Fondo Nacional de Desarrollo Científico y Tecnológico No. 11170126.
Citation
Lopez, D. and Munoz, F. (2021), "China’s trade policy towards Latin America: an analysis of free trade agreements policy", Asian Education and Development Studies, Vol. 10 No. 3, pp. 399-409. https://doi.org/10.1108/AEDS-08-2019-0133
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited