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Caloric unequal exchange in Latin America and the Caribbean

Fander Falconí, Jesús Ramos-Martín y Pedro Cango (published in 2016-04-07 by carlos armando… )
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Published and/or Presented at:
Falconí, Fander, Jesús Ramos-Martín y Pedro Cango. “Caloric unequal exchange in Latin America and the Caribbean” Documento de Trabajo 05, FLACSO, Ecuador, 2016.
The existence of unequal exchange between rich and poor countries is being demonstrated in the literature for some time, explained by differences in labour costs that reflected in the prices of traded goods. In recent years, research has also demonstrated that the lack of inclusion of the environmental impacts in prices of traded goods reflected an ecologically unequal exchange. This paper contributes to the discussion with the new coined concept of caloric unequal exchange that reflects the deterioration of terms of trade for food in terms of calories. Using last FAO data available, exports and imports from and to Latin America and the Caribbean are analysed for the period 1961 through 2011 in volume, value and calories and for different groups of products. The conclusion is reached that although calories exported by the region to the rest of the world are more expensive that those imported, the ratio is deteriorating over time. This trend is found to be different depending on the partner involved. In all cases, the region is helping the rest of the world in improving their diets at a lower cost. This result confirms the loss of natural funds such as soil and nutrients, which can be seen as a de-capitalisation of exporting countries. A side result is that globalisation is homogenising diets over time, concentrating most of food consumption in a reduced number of products, and therefore increasing interdependency among countries and affecting food security. This new debate is found to be useful for designing trade and development policies in the countries analysed.