South American Trade Blocs Boost Regional Economies, Reshape Global Commerce
The article explores what influences trade between South American countries using a model called the Augmented Gravity Model. Results show that factors like geography and income have a big impact on trade volume. For countries in MERCOSUR, a trade bloc, trade within the bloc increases. However, for Andean Community countries, another trade bloc, while total trade grows, it mostly happens with countries outside the bloc rather than within it. This suggests that MERCOSUR boosts trade among its members more effectively than the Andean Community.