Comparative Advantages and Specialization Dynamics in Agri-food Trade of Argentina, Paraguay and Uruguay

Comparative Advantages and Specialization Dynamics in Agri-food Trade of Argentina, Paraguay and Uruguay

Authors

DOI:

https://doi.org/10.7160/aol.2025.170410

How to Cite

Comparative Advantages and Specialization Dynamics in Agri-food Trade of Argentina, Paraguay and Uruguay. (2025). AGRIS on-Line Papers in Economics and Informatics, 17(4), 137-155. https://doi.org/10.7160/aol.2025.170410

Abstract

The article interrogates the shape, dynamic, and fragility of revealed comparative advantages of 46 agri-food products traded by Argentina, Paraguay, and Uruguay in the period 1995-2020 using normalized revealed comparative index and summary statistics, stochastic kernels, Galtonian regression, Markov chains, and Kaplan-Meier survival analysis. The analysis reveals the agri-food flagship products and the agri-food trade of these countries has formed mainly around these flagship products. The results support the argument that changes in distribution of comparative advantages in agri-food trade underwent an increase in specialization in these countries, especially in the period from the beginning of millennia until about period slightly after the Great Recession. The results also indicate slight convergence in the change in agri-food comparative advantages in these three countries, as well as the increased complexity of agri-food comparative advantages in Argentina and Paraguay at the end of the period under scrutiny. Despite these variations and differences among countries under scrutiny the distribution of comparative advantages remains stable and persistent. Given this evidence, we conclude that these countries will continue to develop their agriculture-led growth economic model and these flagship products will play an important role in the overall agri-food export structures of these countries in the future.

References

Aiginger, K. (2001) "Specialization of European manufacturing", Austrian Economic Quarterly, Vol. 5, No. 2, pp. 81-92. ISSN 1936-4806

Balassa, B. (1965) "Trade Liberalisation and Revealed Comparative Advantage", The Manchester School, Vol. 33, No. 2, pp. 99-123. ISSN 1467-9957

Balassa, B. (1977) "Revealed' Comparative Advantage Revisited: An Analysis of Relative Export Shares of the Industrial Countries, 1953-1971", The Manchester School, Vol. 45, No. 4, pp. 327-344. ISSN 1467-9957 DOI: https://doi.org/10.1111/j.1467-9957.1977.tb00701.x

Ballance, R., Fostner, H. and Murray, T. (1987) "Consistency tests of alternative measures of comparative advantage", The Review of Economics and Statistics, Vol. 69, No. 1, pp. 157-161. ISSN 00346535 DOI: https://doi.org/10.2307/1937915

Ban, I.M. (2017) "Measuring trade specialization dynamics: the case of Romania and Bulgaria", Empirica, Vol. 44, pp. 229-248. ISSN 1466-4526 DOI: https://doi.org/10.1007/s10663-016-9317-7

Besedes, T. and Prusa, T. (2006) "Product differentiation and duration of US import trade", Journal of International Economics, Vol. 70, No. 2, pp. 339-358. ISSN 0022-1996 DOI: https://doi.org/10.1016/j.jinteco.2005.12.005

Bojnec Š. and Ferto I. (2016) "Export competitiveness of the European Union in fruit and vegetable products in the global markets", Agric. Econ. - Czech, Vol. 62, No. 7, pp. 299-310. ISSN 1805-9295 DOI: https://doi.org/10.17221/156/2015-AGRICECON

Bojnec, Š. and Ferto I. (2018) "Economic Crisis and the Fragility of Comparative Advantage in European Agriculture", German Journal of Agricultural Economics, Vol. 67, No. 3, pp. 147-159. ISSN 2191-4028

Borges Aguiar, G.M. and Balogh, J.M. (2022) "Analysis of the Competitiveness in the Agri-food sector: The case of Latin America and the Caribbean Region", Competition, Vol. 21, No. 1-2, pp. 92-117. ISSN 2939-7324 DOI: https://doi.org/10.21845/comp/2022/1-2/2

Bowen, H. (1983) "On the Theoretical Interpretation of Indices of Trade Intensity and Revealed Comparative Advantage", Review of World Economics, Vol. 119, No. 3, pp. 464-472. ISSN 1610-2886

Brasili, A., Epifani, P. and Helg, R. (2000) "On the dynamics of trade patterns", De Economist, Vol. 148, No. 2, pp. 233-258. ISSN 1572-9982 DOI: https://doi.org/10.1023/A:1004065229330

Bureau, J., Guimbard, H. and Jean, S. (2019) "Agriculture Trade Liberalisation in the 21st century: Has It Done the Business?", Journal of Agricultural Economics, Vol. 70, No. 1, pp. 3-25. ISSN 1477-9552 DOI: https://doi.org/10.1111/1477-9552.12281

Carrington, S. J., Olarte, S. H., Urbina, G. (2023) "Commodity cycle management in Latin America: The importance of resilience in face of vulnerability", Resources Policy, Vol. 81, p. 103316. ISSN 1873-7641 DOI: https://doi.org/10.1016/j.resourpol.2023.103316

Dalum, B., Laursen, K. and Villumsen, G. (1998) "Structural change in OECD export specialization patterns: de-specialization and stickiness", International Review of Applied Economics, Vol. 12, No. 3, pp. 423-443. ISSN 1465-3486 DOI: https://doi.org/10.1080/02692179800000017

De Benedictis, L. and Tamberi, M. (2004) "Overall Specialization Empirics: Techniques and Applications", Open Economies Review, Vol. 15, No. 4, pp. 323-346. ISSN 1573-708X DOI: https://doi.org/10.1023/B:OPEN.0000048522.97418.99

Fernández, V. L. and Curado, M. L. (2019) "Argentina’s competitiveness matrix: The natural resource controversy and the country’s evolving trade position", Revista CEPAL, Vol. 2019, No. 127, pp. 67-89. ISSN 1684-0348 DOI: https://doi.org/10.18356/ebf22171-en

Ferto, I. and Hubbard, L. J. (2003) "Revealed Comparative Advantage and Competitiveness in Hungarian Agri-Food Sectors", The World Economy, Vol. 26, No. 2, pp. 247-259. ISSN 1467-9701 DOI: https://doi.org/10.1111/1467-9701.00520

Fujita, M., Krugman, P. and Venables, A. (1999) "The Spatial Economy: Cities, Regions, and International Trade", Cambridge, MA: MIT Press. ISBN-13 978-0262561471

Gnangnon, S. K. (2018) "Multilateral Trade Liberalization and Economic Growth", The Journal of Economic Integration, Vol. 33, No. 2, pp. 1261-1301. ISSN 1976-5525 DOI: https://doi.org/10.11130/jei.2018.33.2.1261

Grossman, G. and Helpman, E. (1991) "Innovation and Growth in the Global Economy", Cambridge, MA: MIT Press. ISBN 978-0262570978

Hart, P. E. (1976) "The dynamics of earnings, 1963-1973", The Economic Journal, Vol. 86, No. 3, pp. 551-565. ISSN 0013-0133 DOI: https://doi.org/10.2307/2230799

Hinloopen, J. and Marrewijk, C. (2001) "On the Empirical Distribution of the Balassa Index", Review of World Economics, Vol. 137, No. 1, pp. 1-35. ISSN 1610-2886 DOI: https://doi.org/10.1007/BF02707598

Hoang, V. (2019) "Investigating the evolution of agricultural trade specialization in transition economies: A case study from Vietnam", The International Trade Journal, Vol. 33, No. 4, pp. 361-378. ISSN 1521-0545 DOI: https://doi.org/10.1080/08853908.2018.1543622

Hoen, A. and Oosterhaven, J. (2006) "On the measurement of competetive Advantage", The Annals of Regional Science, Vol. 40, No. 3, pp. 677-691. ISSN 1432-0592 DOI: https://doi.org/10.1007/s00168-006-0076-4

Hubbard, C., Alvim, A. M., Mattos, E. J. and Hubbard, L. (2017) "Agri‐food Trade Between Brazil and the EU", EuroChoices, Vol. 16, No. 1, pp. 11-16. ISSN 1746-962X DOI: https://doi.org/10.1111/1746-692X.12144

Jank, M. S., Zerbini, A. N. and Cleaver, I. (2019) "Global competitiveness of the Brazilian agri-food sector", In: Buainain, A. M., Lanna, R., Navarro, Z. (eds): "Agricultural Development in Brazil". London, Routledge DOI: https://doi.org/10.4324/9781351029742

Kostoska, O. and Hristoski, I. (2018) "Trade dynamics, revealed comparative advantage, and international competitiveness: Evidence from Macedonia", Economic Annals, Vol. 63, No. 218, pp. 23-58. ISSN 0013-3264 DOI: https://doi.org/10.2298/EKA1818023K

Kowalski, P. (2011) "Comparative Advantage and Trade Performance: Policy Implications", OECD Trade Policy Papers, No. 121, Paris, OECD Publishing DOI: https://doi.org/10.1787/5kg3vwb8g0hl-en

Krugman, P. (1987) "The narrow mowing band, the Dutch disease, and the competitive consequences of Mrs. Thatcher: notes on trade in the presence of dynamic scale economies", Journal of Development Economics, Vol. 27, No. 1-2, pp. 41-55. ISSN 0304-3878 DOI: https://doi.org/10.1016/0304-3878(87)90005-8

Krugman, P. (1991) "Geography and Trade", Cambridge, MA: MIT Press. ISBN 9780262610865

Lafay, G. (1992) "The measurement of revealed comparative advantages" In: Dagenais, M. G. and Muet, P.-A. (eds.) "International Trade Modelling", London: Chapman & Hall. p. 209-234. ISBN 0-412-45000-3.-1992

Laursen K. (2015) "Revealed Comparative Advantage and the Alternatives as Measures of International Specialisation", Eurasian Business Review, Vol. 5, pp. 99-115. ISSN 2147-4281 DOI: https://doi.org/10.1007/s40821-015-0017-1

Lederman D, Olarreaga M, Perry G (2009) "China’s and India’s Challenge to Latin America", Washington, DC: World Bank. ISBN 978-0-8213-7308-8. [Online]. Available: https://1url.cz/TJfwW [Accessed: April 14, 2025]

Leromain, E. and Orefice, G. (2014) "New revealed comparative advantage index: Dataset and empirical distribution", International Economics, Vol. 139, pp. 48-70. ISSN 2110-7017 DOI: https://doi.org/10.1016/j.inteco.2014.03.003

Lucas, R. (1988) "On the mechanics of economic development", Journal of Monetary Economics, Vol. 22, No. 1, pp. 3-42. ISSN 0304-3932 DOI: https://doi.org/10.1016/0304-3932(88)90168-7

Luciano, B. and Borges, C. (2022) "Beyond parliamentary ratification: the role of national and subnational parliaments in EU-Mercosur trade negotiations", Journal of European Integration, Vol. 45, pp. 665-682. ISSN 1477-2280 DOI: https://doi.org/10.1080/07036337.2022.2129630

Monnerat, J. (2023) "Benevolent Protectionism? Environmental Regulation in the Trade Policy of the European Union and its Implications for the EU-MERCOSUR Trade Agreement", Rio de Janeiro, Direito Rio, p. 8. [Online]. Available: https://1url.cz/PJUx1 [Accessed: April 14, 2025]

Nolte, D. (2021) "The EU's Beef with Mercosur: Geo-economics versus Climate Diplomacy", Washington, Woodrow Wilson International Center for Scholars, p. 29. [Online]. Available: https://1url.cz/Aus7x [Accessed: April 14, 2025]

Norberg, M. B. (2020) "The Political Economy of Agrarian Change in Latin America: Argentina, Paraguay and Uruguay", Cham, Palgrave Macmillan, 404 p. ISBN 978-3-030-24585-6

Proudman, J. and Redding S. (2000) "Evolving patterns of international trade", Review of International Economics, Vol. 8, No. 3, pp. 373-396. ISSN 1467-9396 DOI: https://doi.org/10.1111/1467-9396.00229

Quah, D. T. (1996) "Empirics for economic growth and convergence", European Economic Review, Vol. 90, No. 6, pp. 1353-1375. ISSN 0014-2921 DOI: https://doi.org/10.1016/0014-2921(95)00051-8

Redding, S. (1999) "Dynamic Comparative Advantage and the Welfare Effects of Trade", Oxford Economic Papers, Vol. 51, No. 1, pp. 15-39. ISSN 1464-3812

Silverman, B. W. (1986) "Density estimation for statistics and data analysis", London, Chapman and Hall, p. 175. ISBN 0-412-24620-1

Smutka, L., Maitah, M. and Svatoš, M. (2018) "Changes in the Czech agrarian foreign trade competitiveness - different groups of partners’ specifics", Agric. Econ. - Czech, Vol. 64, No. 9, pp. 399-411. ISSN 1805-9295 DOI: https://doi.org/10.17221/399/2016-AGRICECON

Stellian, R. and Danna-Buitrago, J.P. (2022) "Which revealed comparative advantage index to choose? Theoretical and empirical considerations", Revista CEPAL, Vol. 138, No. 45-65. ISSN 1684-0348

Stellian, R., Ojeda-Joya, J. N., Danna-Buitrago, J. P. (2024) "Time stationarity, shape and ordinal ranking bias of RCA indexes: a new set of measures", Review of the World Economics, Vol. 160, pp. 675-711. ISSN 1610-2886 DOI: https://doi.org/10.1007/s10290-023-00512-6

Swinnen, J. F. M. (2007) "Global Supply Chains, Standards and the Poor: How the Globalization of Food Systems and Standards Affects Rural Development and Poverty", Cambridge, MA: CABI, p. 322. ISBN 978-1-84593-185-8

UNCTAD (2023) "World statistical database". [Online]. Available: https://bit.ly/21GbfKX. [Accessed: Apr. 7, 2024]

Urdinez, F., Burian, C. and de Oliveira, A. (2016) "MERCOSUR and the Brazilian Leadership Challenge in the Era of Chinese Growth: A Uruguayan Foreign Policy Perspective", New Global Studies, Vol. 10, No. 1, pp. 1-25. ISSN 1940-0004 DOI: https://doi.org/10.1515/ngs-2015-0015

Vondráček, M., Smutka, L., Vacek, T., Pulkrábek, J., Timoshenkova, I. and Maitah, K. (2022) "Distribuce komparativních výhod na trhu s cukrem v zemích EU a specifické postavení českých exportů " (Distribution of Comparative Advantages on Sugar Market in EU Countries and Specific Position of Czech Exports"), Listy Cukrovarnické a Řepařské, Vol. 138, No. 11, pp. 374-384. ISSN 1805-970. (In Czech)

Vollrath, T. (1991) "A Theoretical Evaluation of Alternative Trade Intensity Measures of Revealed Comparative Advantage", Weltwirtschaftliches Archiv, Vol. 127, pp. 265-289. ISSN 10043-2636 DOI: https://doi.org/10.1007/BF02707986

Wacziarg, R. and Welch, K. H. (2008) "Trade liberalization and Growth: New Evidence", The World Bank Economic Review, Vol. 22, No. 2, pp. 187-231. ISSN 0258-6770 DOI: https://doi.org/10.1093/wber/lhn007

WTO. World Trade Organization (2024) "World Trade Report 2024 Trade and inclusiveness" [Online]. Available: https://1url.cz/k1VQP [Accessed: Mar. 12, 2024].

Young, A. (1991) "Learning-by-doing and dynamic effects of international trade", The Quartterly Journal of Economics, Vol. 106, No. 2, pp. 396-406. ISSN 0033-5533 DOI: https://doi.org/10.2307/2937942

Yu, R., Cai, J. and Leung, P. (2009) "The Normalized Revealed Comparative Advantage Index", The Annals of Regional Science, Vol. 43, No. 1, pp. 267-282. ISSN 1432-0592 DOI: https://doi.org/10.1007/s00168-008-0213-3

Zaghini, A. (2003) "Trade advantages and specialization dynamics in acceding countries", Working paper № 249. Frankfurt am Main, Germany: European Central Bank, pp. 4-15

Zaghini, A. (2005) "Evolution of trade patterns in the new EU member states", Economics of Transition", Vol. 13, No. 4, pp. 629-658. ISSN 2577-6983 DOI: https://doi.org/10.1111/j.0967-0750.2005.00235.x

Zdráhal, I., Hrabálek, M., Kadlec, P. and Krpec, O. (2021) "Brazil's Comparative Advantages and Specialization Dynamics in Agri-food Trade", AGRIS on-line Papers in Economics and Informatics, Vol. 13, No. 2, pp. 121-139. ISSN 1804-1930 DOI: https://doi.org/10.7160/aol.2021.130210