Interregional Trade in Manufactured Goods in the Pacific Alliance Countries according to Linder’s Theory

Derived from the economic restructuring of the late twentieth century, the logic of the market and trade liberalization have become the guiding principles of the capitalist system. The reduction of barriers to international trade and trade agreements are mechanisms for promoting free trade. The Pacific Alliance is a regional integration initiative recently created and with five years of existence, a preliminary evaluation is in order. The objective of this article is to analyze the evolution of trade in manufactured goods between the member-countries of the Pacific Alliance. To achieve this objective, the article is based on the theory of Linder which stipulates that trade in manufactured goods will be intensive among countries with similar per-capita income. A descriptive study is conducted with data from UNCTAD and a modified gravity model is used subsequently. Based on the empirical evidence, it is established that trade in manufactured goods between the member-countries of the Pacific Alliance is in fact low. However, the member-countries of the Alliance have increased trade with other countries, mainly with the United States and China, even if the geographical distance with these countries is wider.