South America's biophysical involvement in international trade: the physical trade balances of Argentina, Bolivia, and Brazil in the light of ecologically unequal exchange

Abstract

International trade is becoming increasingly important in the strategies of industrialized economies ('core' countries) to meet their physical needs and maintain their social metabolism. Less industrialized ('non-core') countries, in particular those with low population densities such as countries in South America, provide a large share of the natural resources currently being used by the 'core' countries. This article analyzes the relations of biophysical exchange of Argentina, Bolivia, and Brazil with global 'core' and 'non-core' countries in order to add to a discussion of possible relations of different national economic policies, such as import substituting industrialization or neoliberal adjustment, on the countries' physical trade balances (PTBs). By that we will provide a biophysical reading of ecologically unequal exchange; by investigating whether there is a physical net trade flow from 'non-core' to 'core' countries, whether primary products dominate exports of 'non-core' countries in exchange for processed products from 'core' countries, and whether the notion of unfavorable mass-to-price relation for the trading 'non-core' countries applies (Hornborg 2012; Martinez-Alier 2007). The magnitudes, type of material, stage of processing and monetary value of the traded goods are analyzed for the time period from 1962 to 2011. The evaluations have been carried out for trade relations with the 'core' and the 'non-core' countries separately. Additionally, in order to trace the so-called China Effect, which led to the period of new extractivism, the quantities exported to China are shown separately. The results indicate that the three countries examined are net exporters of physical quantities. The physical involvement in 'core'- and 'non-core'-related international trade differs greatly, but at the same time the relative importance of the 'core' as trading partner has decreased steadily over the five decades. Still, 'core'-related trade involves the most unfavorable mass-to-price relation. These conditions, i.e. high importance of unprocessed export commodities, low average unit prices, and an unfavorable monetary trade balance (MTB), reveal many characteristics of an ecologically unequal exchange. This is especially true for Argentina and Brazil. Due to its lower economic performance and limited involvement in international trade, Bolivia to some extent represents an exception.

Keywords: Ecologically unequal exchange, physical trade balance, South America, Argentina, Bolivia, Brazil.