On the relationship between trade agreements and institutional and political factors – 2016-06

The presentation focuses on the importance that institutional and political factors play on Latin American economic integration. Two integration axes can be distinguished: the Pacific Axis presents a continuity strategy, while the Atlantic Axis presents an alternative strategy for regional integration. Brazil fits in a third possibility: BRICS trade cooperation. By focusing on both a cross-sectional and a panel data analysis, we prove that institutional and political factors do matter. Furthermore, the role of these factors have been strengthened at the beginning of the present century due to the 11S and the Revolución Bolivariana. Finally, our analysis confirms that geographic, economic and trade policy aspects are key elements for the formation and enhancement of trade agreements in the region.