Analysis of Central American trade integration from the perspective of intraregional value added

Abstract

The aim of this article is to study trade integration in Central America from a value added perspective, using the first regional input-output table, a tool developed by the Economic Commission for Latin America and the Caribbean (ECLAC) in close cooperation with the central banks and statistical institutes of the region. The strategy of open regionalism employed by the countries of Central America has resulted in significant subregional trade integration with regard to gross exports; however, these exports include a significant share of intermediate inputs from outside the subregion. The vertical specialization indicators (exports and imports) estimated in this article show that exports within Central America create less domestic value added than total exports and incorporate considerable intermediate inputs from outside the subregion, creating little value added in the subregion itself.