Central America, Panama, and the Dominican Republic: Trade Integration and Economic Performance

41 Pages Posted: 1 Nov 2012

See all articles by Stephanie C. Medina Cas

Stephanie C. Medina Cas

International Monetary Fund (IMF)

Andrew J. Swiston

International Monetary Fund (IMF)

Luis-Diego Barrot

World Bank

Date Written: September 2012

Abstract

This paper studies the potential for the export sector to play a more important role in promoting growth in Central America, Panama, and the Dominican Republic (CAPDR) through deeper intra-regional and global trade integration. CAPDR countries have enacted many free trade agreements and other regional integration initiatives in recent years, but this paper finds that their exports remain below the norm for countries of their size. Several indexes of outward orientation are constructed and suggest that the breadth of geographic trading relationships, depth of integration into global production chains, and degree of technological sophistication of exports in CAPDR are less conducive to higher exports and growth than in fast-growing, export-oriented economies. To boost exports and growth, CAPDR should implement policies to facilitate economic integration, particularly building a customs union, harmonizing trade rules, improving logistics and infrastructure, and enhancing regional coordination.

Keywords: Bilateral trade agreements, Central America, Dominican Republic, Economic growth, Export sector, International trade agreements, Panama, Trade integration, Exports, Integration, Central America, Free trade agreements, Economic growth, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama

JEL Classification: F13, F14, F15, F43, O11

Suggested Citation

Medina Cas, Stephanie C. and Swiston, Andrew J. and Barrot, Luis-Diego, Central America, Panama, and the Dominican Republic: Trade Integration and Economic Performance (September 2012). IMF Working Paper No. 12/234, Available at SSRN: https://ssrn.com/abstract=2169777

Stephanie C. Medina Cas (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Andrew J. Swiston

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Luis-Diego Barrot

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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