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Digital and environmental policies are increasingly seen as complementary, both domestically and internationally. In international trade policy, digital and environmental issues have been and continue to be discussed in multilateral negotiations at the World Trade Organisation and in plurilateral negotiations on preferential trade agreements (PTAs). This chapter takes a closer look at the design and impact of digital and environmental provisions in Latin American PTAs. It begins with a brief comparative overview of domestic digital and environmental policies in Latin America, followed by a discussion of the design features of Latin American PTAs. The final section provides an empirical analysis of the impact of these design features on trade. While there is considerable heterogeneity across Latin American countries and PTAs, the analysis suggests a positive relationship between digital and environmental policies. Latin American countries with more ambitious domestic digital policies tend to have more ambitious domestic environmental policies, and vice versa. Similarly, Latin American countries with a broader coverage of digital issues in their PTAs also tend to cover a broader range of environmental issues in their PTAs, and vice versa. The empirical results suggest that the presence and design of digital and environmental provisions in Latin American PTAs have no statistically significant impact on the volume and composition of imports. For exports, the analysis suggests that digital provisions in PTAs tend to increase flows, while the opposite is true for environmental provisions.
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