Diverging Trade Strategies in Latin America: An Analytical Framework

Vinod K. Aggarwal and Ralph Espach

The Strategic Dynamics of Latin American Trade, 2004

To explain the rationales that lie behind this increasing divergence among the trade strategies of our four case study countries, we focus primarily on what we term their trade preferences. We can distinguish among four different analytical approaches to trade policies and relations. First, abstract models based on broad economic concepts such as comparative advantage can generate “ideal” trade preferences. An example is classic liberal trade theory, which assumes away political or security concerns and predicts that rational states with perfect information will prefer free trade to any other option. For obvious reasons, ideal trade preferences seldom describe the formulation of trade policies in the real world.

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