selected countries, Q4 2019 to Q3 2020

has been reversed for the COVID-19 pandemic. Most services trade involves in-person interactions, which have become riskier and more difficult or impossible because of public health precautions around the world to manage the crisis. The United Nations Conference on Trade and Development (UNCTAD), for example, forecast a decline of 15.4 percent in global services trade in 2020 compared with 2019. For goods, the predicted decline was only 5.6 percent (UNCTAD 2020). These figures include the special case of digital trade, which increased through a substitution effect during the pandemic.

In the Latin American and Caribbean countries with data, services have been hard hit by the pandemic (figure 5.4). Only Honduras’s export position was relatively unchanged in the third quarter of 2020 from the fourth quarter of 2019 (just before the pandemic). All other countries have seen large export declines—from 25 percent to nearly 80 percent by value.

All sectors have experienced declines, but the declines have varied considerably (figure 5.5). Exports in travel fell by 92 percent and in construction by 84 percent because both sectors require a personal presence (mode 2 for travel and typically mode 4 for construction). Telecommunications, other business services, and financial services declined by 45–65 percent, while the insurance and transportation sectors fell by around 30 percent. Clearly, the decline in the region’s services exports has been major in all sectors, and it is likely a combination of the reduced scope for in-person transactions and of falling incomes in export markets that reduced demand even for exports that could be supplied online.

Figure 5.4 Change in the value of total services exports in Latin America and the Caribbean, selected countries, Q4 2019 to Q3 2020

Argentina Bolivia Brazil Chile Colombia Costa Rica Dominican Republic Ecuador Honduras Mexico Nicaragua Paraguay Peru Suriname Uruguay –80 –70 –60 –50 –40 –30 –20 –10 0 10 Change in export value (%) Source: Services trade data from the World Trade Organization’s Stats portal, https://stats.wto.org/. Note: The selected countries are those for which data were available for the specified periods. Q = quarter.