China-US economic war: opportunities for the Andean Community beyond the decoupling process

Daniel Agramont Lechín

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Following Xi Jinping’s lead, China is heading towards a new modernization with the ambitious goal of becoming the leader in technological development. This has not gone unnoticed in the West, especially in the US. Tensions have increased, and a bilateral escalation is underway in what has already been dubbed as a return to great power competition. As a result, warnings are being voiced concerning a deepening of the deglobalization process, reinforced by an ongoing decoupling process between the two largest economies. This process is of special significance for the Andean Community, given that the contenders are its two largest trading partners. A first finding is that the Andean nations are far more dependent on trade with them than the other way around. This contradicts any notion that the Andean nations have a strong position in the world commodities trade. Nevertheless, several trade opportunities were found that stem from the trade tensions between China and the US. More importantly, it is shown that possibilities indeed exist to increase exports to both China and the US of non-traditional products over and above the usual commodity sales. Colombia has the largest opportunities in both destination markets, but one unexpected finding is that Ecuador has the second largest, with several such non-traditional products. Plus, Peru and Bolivia have several opportunities for diversification of exports to the US.

Keywords: foreign policy; trade wars; China; Latin America; US; Andean region; primary dependence (search for similar items in EconPapers)
JEL-codes: F00 F50 F59 N26 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022
New Economics Papers: this item is included in nep-cna and nep-int
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