World trade organization is a body that tries to ensure that its members have benefits of almost tariff free or toll free international trade. This ensures that member countries have a free and fair environment to trade. With this in mind, the organization has values or rules such as:
Foreign goods should be treated in a similar manner as the local goods.
The organization fixes the upper bound to tariffs and ensures member countries keep their tariffs lower than the bound value.
Dictates on subsidizing and dumping of goods agreed upon in the agreement.
Requires a member country to allow trade analysis or review from a foreigner
Allow for investigation upon a complaint from any member state of the organization (stat.wto.org).
Having covered some of the regulations in this organization, let us analyze some countries from Latin America and assess some of the above named values.
This is the country from Latin America with the largest population. This country is a member of world trade organization and has major partners in Americas, Europe and parts of the Asian continent. Assessing the openness of this country in trade, it is clear from statistics that the control of trade mainly exports and imports have similar levels. This is an indication that trade is open thus the main forces controlling it are the other forces of the market like demand and supply with minimal use of tariffs to control the overall market structure. This is supported by the 22 index of exports and 21 indexes of imports which translate to values of 256039 and 236954 million US dollars respectively. These values indicate that the market is open to importers as well as the exporters (World Economic Outlook Database, paragraph 2).
Trying to find out some the main products that this country involves in trade as exports and imports, agriculture contributes by 33.5 per set index of exports. This is very large compared to the import index which stands at about 6.2. Fuel and mining comes in second with an index of 22.3 on exports and 20.1 on Imports. This signifies a balance in trade when it comes to fuel and minerals.
Taking a close look at the individual business partners, Brazil appears to have most of its imports and exports trade with the European Union. This is supported by the high number of indexes that depict highest import levels from European Union. This is also supported by the high index of imports from the same region. Other business partners who also appear to have significant impact on international trade with this country are in the Americas. They include Argentina and United States among other countries in the region. The country also has some trade ties with some Asian countries including Japan, China and North Korea.
Taking a look at annual record on the expenses and revenues earned by the country through international trade, the country appears to make approximately 36 435 million US dollars while spending 72976 million US dollars on importation. From this data, it appears that the country relies on imports for it to meet some of the extended demands due to its population which can be claimed to consume more than it can produce locally (stat.wto.org).
This is the second country on population in Latin America. The total merchandise levels of this country are at 16 both for imports and exports. This indicates that international trade in this country does not fair to the same levels as in Brazil whose level is at 58. Taking a look at the commercial services offered in the country, exports have higher commercial services which has an index of 43 while the imports have an index of 34. This indicates that the country earns some revenues by increased commercial services levels as compared to import levels (World Economic Outlook Database, paragraph 3).
Taking a look at the trade partners of the country, it has its main business partner as the United States. This is because Mexico relies on US to an index of 78 for exportation. On the other side, it depends on the same country for an index of 49 on imports. This clearly explains why trade relations between these two countries are that strong. The other trade partners from the American continent include Canada and Colombia. These two form a market for exports from Mexico. However, there are no other significantly recognized sources of imports for this country in the American continent. From other continents, the European Union is the second on both imports and exports. In the Asian continent, this country has significant business ties with China, Japan and Korea republic. This means that this country does not operate like a western bloc country that is not ready to relate well with the Eastern countries in business. However, checking the values of imports and exports expose that the imports value exceed exports value only by about ten million US dollars indicating a country that does not heavily rely on importation to cater for its domestic needs. This makes the whole country much reliant on its own internal products to stabilize the economy.
The main products for trade are agriculture which has a binding level of 44.5 but is bounded by the country at 34.2. This indicates that all the products in this sector have a lower country bind compared to WTO bind. Other products include non agricultural products and services (stat.wto.org).
This country is the third in population levels among the Latin American countries. This country on international merchandise has an index of 55 on exports and an index of 52 on imports. This is a higher level as compared to Mexico revealing that Colombia is more reliant on international trade than Mexico. The commercial services also have a very high index on exports meaning that the country earns a lot by commercial services. On the imports’ side, commercial services have a slightly lower value than exports which settles at 61 on the index (World Economic Outlook Database, paragraph 4).
Investigating the trade partners, this country has most of its trade deals with other American countries. In support of this, the country relies heavily on Panama, Peru and United States for exportation. On importation, this country depends largely on the United States, Brazil and Mexico. This can be attributed to good neighborhood that allows these countries to interact well. However, this country has trade relations with other countries from Europe and Asia. The most significant trade partners are the European Union and china. This makes the country also interact with eastern bloc countries in trade.
The openness of trade in this country also appears to be well exhibited. This is due to the heavy reliance on international trade in the process of generating income and reliance on exports and imports to resolve internal economic constraints.
A look at the trade commodities shows that fuels and minerals are one of the main exports of the country. The export upper bound is 71.3 indexes while the applied index in 2011 was 65.3. This indicates that the country mainly exports non-agricultural products with minimal of agricultural exports. Agriculture contributes to about 12.4 of the total exports. Looking at the corresponding import levels, agricultural products have an index of 10.5 while fuels and minerals have 8.5. From this data and considering that this country produces oil, it is clear that it must have very good international relations for it to cater for its population on all aspects effectively (stat.wto.org).
This is another Latin American country that has a quite high population. Unlike most of the other countries in the region, this country relies more on agriculture than fuel and mineral products. This makes it to have a slightly different trade criteria and ties from countries relying on fuel and minerals. However, their trade criterion is similar to that of Brazil (World Economic Outlook Database, paragraph 6).
The merchandise level in the country is at index 44 which indicates that the country does not largely depend on foreign trade to generate revenue. This can be attributed to its reliance on agriculture which also forms the main form of exports.
The main trade partners to Argentina come from America, Asia and Europe. The major countries that Argentina exports to are Brazil, Chile and United States. Outside the Americas, it exports to the European Union. The country also imports from Brazil, United States and Mexico from America, European Union from Europe and China from Asia. This makes the country to be well rounded and open to trade across all regional blocs but it appears to be more open to the American based countries.
This is the last of the top five countries in Latin America in terms of population. The merchandise levels of this country are much higher in the index of 58 both for imports and exports. This creates an insinuation that the country relies on foreign trade significantly (World Economic Outlook Database, 2012).
The main trade partners are from around the world but the top trade partners include US and Canada from America, European Union (27 members) and Switzerland from Europe and China from Asia. On the importation partners this country imports from United States, China, European Union, Brazil and Ecuador among other countries.
Considering other commercial services, this country earns about four million US dollar annually from the services and spends about six million on importation of some commercial services (stat.wto.org).
In conclusion the Latin American countries appear to form an invisible trade bloc within it. This is supported by the great inter-country trade ties that allow massive trade among the countries. This makes them contribute significantly towards WTO in general while maintaining openness of the market to members. The group is also not a closed one since it communicates or trades with other countries in different trade blocs. This is evidenced by the attachment of each country to at least one country in the European bloc and Asian bloc (World Economic Outlook Database, paragraph 8).
World Economic Outlook Database, 2012, Real GDP growth, International Monetary Fund (IMF)