The Latin America and the Caribbean region (LAC) is looking to consolidate its recovery from the COVID-19 crisis. Vaccination is well-advanced in most of the region, the region is on track to recovering previous levels of GDP and employment, schools are opening, and firms are hiring. However, growth forecasts of 2022 and 2023 growth remain modest, at 2.5 percent and 1.9 percent respectively. Long-term structural bottlenecks remain, and are compounded by looming challenges, such as recurrences of the virus, rising inflation, the instability generated by the war in Ukraine, and the pressures on supply chains emanating from the war and the pandemic.
Policymakers must address the novel nature of these supply shocks and look at reforms that can build resilience and boost competitiveness into their trading regimes. Against this background, better trade integration in global value chains (GVCs) via Deep Trade Agreements (DTAs) can be a useful tool for the region.
A new World Bank publication helps to illustrate why DTAs matter for LAC and which elements countries should consider when outlining a future trade agenda that can help create the conditions for firms to improve their productivity and stimulate job creation. The study is a handy and important compilation of potential reforms that policymakers, practitioners, and private sector can consider and consult.