Potential trade implications of Latin America and the Caribbean’s climate commitments under the Paris Agreement

This paper investigates Latin America and Caribbean (LAC)’s nationally determined contributions (NDCs) and their potential implications for the region’s balance of payments. The first section summarizes prevailing trade dynamics, finding that in LAC, exports of raw materials help to cover the cost of importing capital goods. The second section turns to the region’s NDCs to identify policies affecting import expenditure. The third section employs a similar methodology on the export side, tallying policies affecting output and global cost competitiveness in key sectors (crops, livestock, timber, metals and minerals, manufactured goods, fisheries, and tourism).