Far from champions, close to midgets : international production sharing in Central and South America

Abstract

This paper assesses the relative participation of Argentina, Brazil, Guatemala and Nicaragua in fragmented world production. Based on trade statistics from 2000 to 2004, it analyses whether the trade flows of these economies have evolved towards production sharing schemes, and how great this type of trade is, in order to sustain their presence in the world economy. Guatemala and Nicaragua have reached a moderate insertion in a production sharing scheme, following a North-South trade pattern. Nonetheless, their participation is still small, being threatened not only by international competition, but also by their dependence on a unique market. Brazil has consolidated participation in a few chains, showing a more diversified North–South trade pattern. Argentina has attained insertion in the automotive chain of production, whereas its participation in other ones seems still quite limited. The country has a more South-South trade pattern, which exposes it to a certain degree of dependence.