New report highlights growth potential of digital trade in Latin America, Caribbean
The report, entitled "Digital Trade in Latin America and the Caribbean: Connecting Markets, Powering Growth", notes that, over the past two decades, exports of digitally delivered services have expanded fivefold in LAC economies, outpacing the growth of both goods and other services exports. At the same time, the region currently accounts for just 2% of world exports of digitally delivered services, pointing to considerable untapped growth potential.
The report estimates that further digitalization and new technologies, accompanied by stronger improvements in the policy environment of the relatively lower-performing economies, could raise the LAC region's exports of digitally deliverable services by 4.5% per year on average.
Digital trade also offers opportunities to deepen regional integration, the report notes. At present, intra-regional digital trade in LAC economies is limited compared to Europe, Asia and North America, and well below the level of intra-LAC goods trade, suggesting sizeable scope for expanding cross-border digital activity within the region.
The report examines the factors that play a critical role in shaping an economy's participation in digital trade. These include digital infrastructure and connectivity, market openness for backbone inputs, regulatory policies, cross-border payments, logistics and customs processes, export promotion and firms' capabilities, digital skills, and access to finance. Drawing on available information, the report assesses the position of LAC economies across these dimensions.
Based on the analysis, the publication presents a menu of practical policy actions that governments can pursue to enhance their participation in digital trade. Depending on their specific circumstances, challenges and priorities, LAC economies have a choice of initiatives that best fit their needs and may develop a customized plan that supports the prioritization of actions, the mobilization of resources, and the engagement of key stakeholders. The WTO, IDB and the World Bank can continue to play an important role in supporting their efforts by providing technical assistance, policy advice and financing in accordance with their specific mandates.
The full report can be found here.
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