ABSTRACT
Latin American trade has boomed substantially in recent years, particularly intra-Latin trade. This chapter focuses on the possible role of the commodity composition of Latin American trade in the recent Latin American export boom. Historically, these countries have specialized in primary product exports, and while substantial diversification has taken place a good deal of primary product specialization remains. In order to analyze secular shifts in comparative advantage, the chapter analyzes aggregate Latin American exports to the world, constructing export similarity indices (ESIs) for seventeen Latin American and Caribbean countries. The pace of diversification has been most rapid for countries specializing in mining and tropical agriculture, moderate for countries specializing in temperate agriculture, and relatively slow for oil exporters. The question of whether the recent boom in intra-Latin trade reflects structural transformation in the region's economies, trade diversion, or both, remains an open one.
