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Colombian liberalization and integration to world trade markets: Much ado about nothing

Freddy Cepeda-Lopez (), Fredy Gamboa-Estrada (), Carlos León () and Hernan Rincon-Castro ()
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Freddy Cepeda-Lopez: Banco de la República de Colombia

Borradores de Economia from Banco de la Republica de Colombia

Abstract: The objective of this paper is to study the evolution of Colombian liberalization and integration to world trade from 1995 to 2016. We achieve our objective by measuring Colombia’s importance in the world trade network. We employ several types of network centrality metrics to measure importance (i.e. degree, strength, hub, authority), and examine their dynamics against a set of regional peers that serve as benchmark countries. Consistent with previous literature, more than two decades of dedicated trade policies and institutional changes resulted in increased exports and imports. However, when compared to regional peers such as Chile, Brazil, Mexico, and Peru, and China and the United States as trade leading countries, Colombia’s centrality in the world trade network did not improve accordingly. Absolute changes in the evolution of trade did not materialize in an enhanced integration to world markets. Colombia’s ranking in the world trade network did not improve materially, whereas that of some of her regional peers did manifestly (i.e. Peru and Chile). Results highlight the perils of analyzing a country’s trade dynamics in isolation, and emphasizes the usefulness of examining the world trade network. From the economic policy and institutional perspectives, results underscore the challenges ahead to better integrate to world markets and to achieve long-term economic growth from trade. **** RESUMEN: El objetivo del documento es estudiar la evolución de la apertura e integración de Colombia al comercio mundial entre 1995 y 2016 y evaluar su importancia en la red de comercio mundial. El documento emplea varios tipos de métricas de centralidad de red (es decir, grado, valor de los flujos de comercio, centro, autoridad), y examina su dinámica y las compara con las de pares regionales que sirven como países de referencia. De acuerdo con la literatura colombiana, más de dos décadas de políticas comerciales y cambios institucionales resultaron en un aumento de las exportaciones e importaciones. Sin embargo, en comparación con Chile, Brasil, México y Perú, y China y Estados Unidos como países líderes en el comercio mundial, la centralidad de Colombia en la red mundial no mejoró. Los cambios absolutos en los flujos de exportaciones e importaciones no se materializaron en una mayor integración a los mercados mundiales. La posición de Colombia en la red de comercio mundial no mejoró sustancialmente, mientras que la de algunos de sus pares regionales sí lo hizo (es decir, Perú y Chile). Desde una perspectiva de política económica e institucional, los resultados resaltan los desafíos futuros de Colombia para integrarse mejor en los mercados mundiales y lograr un mayor crecimiento económico de largo plazo derivado del comercio internacional.

Keywords: Colombia; foreign trade; centrality; network analysis; world trade network; Colombia; comercio exterior; centralidad; análisis de redes; red de comercio mundial (search for similar items in EconPapers)
JEL-codes: F14 F15 C45 C63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2019-02
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