Application of the grubel and lloyd methodology in the international trade between Mexico and South America

Abstract

Mexico has signed 13 trade agreements with 50 countries, but nearly 80% of its trade is only with the United States. Therefore, it is crucial to diversify Mexico's trade relations with other countries, and Latin America presents a promising opportunity. This research aims to determine the type of Mexico's trade with South American countries (whether it is intra-industry or inter-industry), during the period 2010-2019, through the application of the Grubel and Lloyd methodology (1975, 1979). The findings reveal that, although Mexico's trade with South American countries has little relevance, it is also observed that the Intra-industry Trade Index (ITI) has increased over the years. In this article, it is evident that only Argentina and Brazil have a relevant IGL of the 10 countries analyzed, while trade with the remaining eight countries is less relevant, but with a progressive increase during the study period it is important to emphasize that the globalization process has played a fundamental role in the international trade between South America and Mexico, by opening new markets and promoting the diversification of products and services.