South America: Trade and Integration in the New Global Trade Network

  • Wilson Pérez-Oviedo
  • John Cajas-Guijarro
  • María Cristina Vallejo
Part of the International Political Economy Series book series (IPES)


From 1992 to 2014, the international trade network suffered important changes, in particular the consolidation of the USA and China as “global centers”. On the other hand, during all those years, no South American country became a part of the “core” of the global trade network. Understanding this context, the present study focuses on the role played by South America in an evolving global trade network, using alternative indicators to those commonly proposed by networks’ theory. We also evaluate South America’s integration efforts represented by four regional trade-blocs: the CAN, the ALBA, the MERCOSUR, and the UNASUR. From the country level, we conclude that Brazil has become a “sub-core” in South America, at the same time that the USA and China compete to gain more influence in the region. From the bloc level, we found that the MERCOSUR presents the most favorable results, while the CAN and the ALBA have several problems.


  1. Aitken, N. 1973. The Effect of the EEC and EFTA on European Trade: A Temporal Cross-Section Analysis. American Economic Review 63 (5): 881–892.Google Scholar
  2. Amin, S. 1974. Accumulation on a World Scale: A Critique of the Theory of Underdevelopment. Trans. Brian Pearce. New York: Monthly Review Press.Google Scholar
  3. Backer, L., and A. Molina. 2010. Cuba and the Construction of Alternative Global Trade Systems: Alba and Free Trade in the Americas. Journal of International Law 31 (3): 679–752.Google Scholar
  4. Barabási, A.L., and A. Réka. 1999. Emergence of Scaling in Random Networks. Science 286: 509–512.CrossRefGoogle Scholar
  5. Bergstrand, J. 1985. The Gravity Equation in International Trade: Some Microeconomic Foundation and Empirical Evidence. The Review of Economics and Statistics 67 (3): 474–481. Scholar
  6. Botto, M.I. 2011. ¿Qué nos enseñan los 20 años del Mercosur? Nueva Sociedad 232: 17–25.Google Scholar
  7. Caetano, G. (coord). 2011. MERCOSUR 20 años. Montevideo: CEFIR, Centro de Formación para la Integración Regional. Available at:
  8. Castells, M. 2009. The Rise of the Network Society: The Information Age: Economy, Society, and Culture. Vol. I. Hoboken: Wiley-Blackwell.Google Scholar
  9. CEPAL. 2016. Estadísticas e Indicadores. Comercio Intrarregional de bienes, 2010–2015. CEPALSTAT. Available at:
  10. De Benedictis, L., and L. Tajoli. 2011. The World Trade Network. The World Economy 34 (8): 1417–1454.CrossRefGoogle Scholar
  11. Erdős, P., and A. Rényi. 1959. On Random Graphs I. Publicationes Mathematicae 6: 290–297.Google Scholar
  12. Fagiolo, G., J. Reyes, and S. Schiavo. 2008. On the Topological Properties of the World Trade Web: A Weighted Network Analysis. Physica A: Statistical Mechanics and Its Applications 387 (15): 3868–3873.CrossRefGoogle Scholar
  13. Feenstra, R., J.J. Markusen, and A.K. Rose. 2001. Using the Gravity Model Equation to Differentiate Among Alternative Theories of Trade. Canadian Journal of Economics 34 (2): 430–447.CrossRefGoogle Scholar
  14. Feenstra, R., R. Lipsey, D. Haiyan, A. Ma, and H. Mo. 2005. World Trade Flows, 1962–2000. Documento de trabajo de NBER, National Bureau of Economic Research, n° 11040. Available at:
  15. Frankel, J. 1997. Regional Trading Blocs in the World Trading System. Washington, DC: Institute for International Economics.Google Scholar
  16. Frankel, J., and A.K. Rose. 2002. An Estimate of the Effect of Common Currencies on Trade and Income. The Quarterly Journal of Economics 117 (2): 437–466.CrossRefGoogle Scholar
  17. Frankel, J., and J.W. Shang. 1993. Trading Blocs and Currency Blocs. Documento de trabajo de NBER, National Bureau of Economic Research, n° 4335. Available at:
  18. ———. 1995. Open Regionalism in a World of Continental Trading Blocs. Documento de trabajo de NBER, National Bureau of Economic Research, n° 5272. Available at:
  19. Garlaschelli, D., and M. Loffredo. 2005. Structure and Evolution of the World Trade Network. Physica A: Statistical Mechanics and Its Applications 355 (1): 138–144.CrossRefGoogle Scholar
  20. Ghosh, S., and S. Yamarik. 2004. Are Regional Trading Arrangements Trade Creating? An Application of Extreme Bounds Analysis. Journal of International Economics 63 (2): 369–395. Scholar
  21. González Arana, R. 1999. El Pacto Andino (1969–1999) Un Balance a tres Décadas de su Fundación. Documento de Trabajo. Colombia: Universidad del Norte. Available at: Scholar
  22. Grubel, H.G., and P.J. Lloyd. 1975. Intra-industry Trade: The Theory and Measurement of International Trade in Differentiated Products. London: Macmillan.Google Scholar
  23. Hilgerdt, F. 1942. The Network of World Trade. Geneva: League of Nations.Google Scholar
  24. ———. 1943. The Case for Multilateral Trade. American Economic Review 33 (1): 393–407.Google Scholar
  25. IDB. 2016. IDB Annual Report 2015. Washington D.C.: Inter-American Development Bank.Google Scholar
  26. Kali, R., and J. Reyes. 2007. The Architect of Globalization: A Network Approach to International Economic Integration. Journal of International Business Studies 38 (4): 595–620.CrossRefGoogle Scholar
  27. Kim, S., and H.S. Eui. 2002. A Longitudinal Analyisis of Globalization and Regionalization in International Trade: A Social Network Approach. Social Forces 81 (2): 445–471.CrossRefGoogle Scholar
  28. Kireyev, A., and A. Leonidov. 2015. Network Effects of International Shocks and Spillovers. Documento de trabajo, Fondo Monetario Internacional n°15149. Available at:
  29. Lall, S. 2000. The Technological Structure and Performance of Developing Country Manufactured Exports, 1985–98. Oxford Development Studies 28 (3): 337–369.CrossRefGoogle Scholar
  30. Meade, J. 1955. The Theory of Customs Union. Amsterdam: North Holland Pub. Co.Google Scholar
  31. Nemeth, R., and D.A. Smith. 1985. International Trade and World System Structure: A Multiple Network Analysis. Review 8 (4): 517–560.Google Scholar
  32. Newman, M.E., D.J. Watts, and S.H. Strogatz. 2002. Random Graph Models of Social Networks PNAS. Proceedings of the National Academy of Sciences 2002 99 (1): 2566–2572. Scholar
  33. Pérez-Oviedo, W., and J. Cajas-Guijarro. 2016. Propuesta de indicadores para evaluación de shocks en redes ponderadas-direccionadas asumiendo tiempo infinito. Quito: FLACSO (mimeographed).Google Scholar
  34. Prebisch, R. 1949. El desarrollo económico de América Latina y algunos de sus principales problemas. Santiago: CEPAL.Google Scholar
  35. Rose, A. 2000. One Money, One Market? The Effects of Common Currencies on International Trade. Economic Policy 15 (30): 7–46.CrossRefGoogle Scholar
  36. Schenoni, L. 2014. Brasil en América del Sur: la lógica de la unipolaridad regional. Nueva Sociedad. 250: 138–149.Google Scholar
  37. Serrano, M.A., and M. Borguñá. 2003. Topology of the World Trade Web. Physical Review E 68 (015101): 1–4.Google Scholar
  38. Serrano, M.A., M. Boguñá, and A. Vespignani. 2007. Patterns of Dominant Flows in the World Trade Web. Journal of Economic Interaction and Coordination 2: 111–124.CrossRefGoogle Scholar
  39. Simoes, A., and C. Hidalgo. 2011. The Economic Complexity Observatory: An Analytical Tool for Understanding the Dynamics of Economic Development. In Workshops at the Twenty-Fifth AAAI Conference on Artificial Intelligence, 39–42. California: AAAI Press. Available at:
  40. Smith, D.A., and D.R. White. 1992. Structure and Dynamics of the Global Economy: Network Analysis of International Trade 1965–1980. Social Forces 70 (4): 857–893.CrossRefGoogle Scholar
  41. Snyder, D., and E. Kick. 1979. Structural Position in the World System and Economic Growth: A Multiple Network Analysis of Transnational Interactions. American Journal of Sociology 84 (5): 1096–1126.CrossRefGoogle Scholar
  42. Soloaga, I., and A. Winters. 2001. Regionalism in the Nineties: What Effect on Trade? North American Journal of Economics and Finance 12 (1): 1–29.CrossRefGoogle Scholar
  43. Sunkel, O., and P. Paz. 1978. El subdesarrollo latinoamericano y la teoría del desarrollo. México: Siglo XXI Editores.Google Scholar
  44. Thursby, J.G., and M.C. Thursby. 1987. Bilateral Trade Flows, the Lindner Hypothesis, and Exchange Risk. The Review of Economics and Statistics 69 (3): 488–495.CrossRefGoogle Scholar
  45. Tironi, E. 1977. La Decisión 24 Sobre Capitales Extranjeros en el Grupo Andino. Estudios Internacionales 10 (38): 12–26.Google Scholar
  46. Toulan, O., and M. Guillen. 1996. Beneath the Surface: The Impact of Radical Economic Reforms on the Outward Orientation of Argentine and Mendozan Firms, 1989–95. Journal of Latin American Studies 29: 395–418.CrossRefGoogle Scholar
  47. Turzi, M. 2014. Asia y la ¿(des)integración latinoamericana? Nueva Sociedad 250: 78–87.Google Scholar
  48. Viner, J. 1950. The Customs Union Issue. New York: Carnegie Endowment for International Peace.Google Scholar
  49. Wallerstein, I. 1974. The Rise and Future Demise of the World Capitalist System: Concepts for Comparative Analysis. Comparative Studies in Society and History 16 (4): 387–415.CrossRefGoogle Scholar
  50. Watts, D.J., and S.H. Strogatz. 1998. Collective Dynamics of ‘Small-World’ Networks. Nature 393: 440–442. Scholar
  51. Yamarik, S., and S. Ghosh. 2006. A Sensitivity Analysis of the Gravity Model. The International Trade Journal 19 (1): 83–126.CrossRefGoogle Scholar
  52. Yeats, A. 1997. Does Mercosur’s Trade Performance Raise Concerns About the Effects of Regional Trade Arrangements? Documento de trabajo del Banco Mundial, n° 1729. Available at

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Wilson Pérez-Oviedo
    • 1
  • John Cajas-Guijarro
    • 2
  • María Cristina Vallejo
    • 1
  1. 1.Departamento de DesarrolloFLACSO EcuadorQuitoEcuador
  2. 2.Departmento de Ciencias Sociales de la Escuela Politecnica Nacional de laUniversidad Central del EcuadorQuitoEcuador

Personalised recommendations