Integration & Trade Journal: Volume 16 : No. 35 : July-December, 2012

The last decade has seen a significant increase in the exports of several Latin American and Caribbean countries to destinations within and beyond the region. The increase in trade links has not, however, been accompanied by a proportional increase in reciprocal investments among the trading partners. This precludes making the most of clear advantages, including the possibility of diversifying and upgrading trade links by overcoming trade barriers imposed by distance and cultural differences, and by the greater availability of capital and knowledge flowing to recipient countries. In these countries, there is the additional creation of new jobs and the mitigation of the social costs generated by mismatches in labor markets that are the result of trade and integration among sometimes widely differing trading partners.