WTO report sees major growth potential in Latin America

A new report from the World Trade Organization highlights the substantial untapped potential for digital trade growth in Latin America and the Caribbean. The region's exports of digitally delivered services have expanded fivefold over the past two decades, yet they still account for a mere 2% of the world total.

Titled "Digital Trade in Latin America and the Caribbean: Connecting Markets, Powering Growth," this growth in digital services has outpaced the expansion of both goods exports and other services exports from the region. The analysis suggests that further digitalization, coupled with policy improvements, could boost the region's exports of digitally deliverable services by an average of 4.5% annually.

Key factors shaping digital trade

The report identifies several critical factors that determine an economy's ability to participate in digital trade. These include the quality of digital infrastructure and connectivity, the openness of markets for key inputs, and the regulatory environment. Other important elements are cross-border payment systems, logistics and customs processes, and the capabilities of exporting firms.

The availability of digital skills and access to finance for businesses are also highlighted as important. The WTO report assesses the position of Latin American and Caribbean economies across all these dimensions, drawing on available data to map the current landscape.

Opportunities for deeper regional integration

Digital trade presents a significant opportunity to strengthen economic ties within Latin America and the Caribbean, the report notes. Currently, intra-regional digital trade in LAC economies is limited, especially when compared to regions like Europe, Asia, and North America.

This level of digital exchange is also well below the existing level of goods trade between countries in the region. The report argues this gap represents a sizable scope for expanding cross-border digital activity among neighboring nations.

A menu of policy actions

Based on its analysis, the publication offers a range of practical policy actions for governments seeking to enhance their digital trade participation. The report suggests that, depending on their specific circumstances and challenges, economies can choose from a menu of initiatives to develop a customized plan.

Such a plan would support the prioritization of actions, the mobilization of necessary resources, and the engagement of key stakeholders. The WTO, alongside the Inter-American Development Bank and the World Bank, is positioned to continue supporting these efforts. This support can include technical assistance, policy advice, and financing, in line with each organization's specific mandate.

The full report is available on the WTO website.