Latin American nations have not been exempt from the slowdown that has swamped emerging economies amid China's faltering growth momentum over the past four years. Argentina and Brazil are in contraction and Mexico's projected economic growth this year is less than 1%, but three smaller states, Chile, Costa Rica and Peru, continue to outperform their larger regional peers.

Of note, each of these three countries has negotiated a bilateral free trade agreement with China and their policymakers have focused on pro-market institutional reforms.

China quickly jumped into the FTA game after entering the World Trade Organization in 2001, starting with a framework pact the following year with the Association of Southeast Asian Nations. For China, its FTAs with Chile (signed in 2006) and Peru (2010) speak directly to its need to import copper, iron ore and other minerals.

The China-Costa Rica FTA (2011) embodies Beijing's efforts to advance its "One China" policy in Central America and the Caribbean, an area where a large number of states maintain diplomatic ties with Taiwan; Costa Rica switched to recognizing the People's Republic of China in 2007. Despite its political origins, this FTA has paid off handsomely for Costa Rica in terms of increased aid, trade and investment.

Thanks to their FTAs with China, Chile, Costa Rica and Peru have been able to jump ahead of other countries seeking to export more to China and Peru, in particular, has benefited from large inflows of Chinese foreign direct investment. While most FTAs negotiated over the past two decades have been signed between developed and developing countries, these three China-Latin America accords qualify as south-south FTAs.

Latin America's track record on FTA deals among developing countries, such as the Andean Community and the Southern Cone Common Market, has been disappointing. However, all three of the China-Latin America FTAs approximate 21st century standards vis-a-vis the WTO and its new trade agenda focused on services, investment and intellectual property rights, known as "WTO-plus."

Learning curve

The three China-Latin America FTAs reflect progress along a learning curve over time for both sides. The original Chile-China FTA was the least comprehensive of the three even though Chile had already completed an FTA with the U.S. with deep and binding coverage with respect to investment, services, intellectual property and government procurement.

The terms of China's subsequent FTAs with Peru and Costa Rica reflected a greater willingness on its part to include chapters on the WTO-plus issues of investment and competition policy which were absent from its agreement with Chile. Like Chile, Peru and Costa Rica had concluded "new age" FTAs with the U.S. before negotiating with China so they faced the question of how hard to push for greater access to the Chinese market while laying the regulatory groundwork for the expansion of Chinese FDI and trade in services.

As the trailblazer with China, Chile treaded softly. Peru and Costa Rica then drew on the precedent set by Chile and pushed harder for wider and deeper coverage. Chile then signed a supplemental agreement with China on investment in 2012 to deepen their bilateral FTA.

Since the implementation of the three FTAs, each Latin American signatory has seen a burst of trade with China. Total trade between China and Chile has more than quadrupled in the decade since their FTA was signed while trade with Costa Rica and Peru has nearly doubled.

Larger Latin American economies have had a more contentious trade relationship with China due to an influx of Chinese manufactured goods. The three Latin FTA signatories finessed this challenge by negotiating exclusions for their more sensitive manufacturing sectors. They have also utilized their FTAs to get finished products -- Chilean wine, Peruvian alpaca garments and Costa Rican high-tech inputs -- into the Chinese market.

As the U.S. and China have squared off in a quest to create preferential regional integration networks in which they each can dominate the substantive agenda and control membership to their own advantage, this has left outsiders scrambling to find their place. As far as Latin America is concerned, the U.S.-led Trans-Pacific Partnership includes Chile, Mexico and Peru alongside Canada and countries from East Asia and the Pacific. Colombia and Costa Rica are in the queue for TPP membership.

In contrast, the China-backed Regional Comprehensive Economic Partnership now under negotiation does not involve any Latin American states. But though not members of RCEP, Chile, Costa Rica and Peru, by virtue of their bilateral FTAs with the U.S. and with China, will be the only countries in Latin America to enjoy privileged access to the two largest markets in the world.

For once, these small, open economies which lack global market power find themselves in an advantageous and even enviable situation.

Carol Wise is author of the forthcoming book "Dragonomics: The Rise of China in Latin America" (Yale University Press) and an associate professor of international relations at the University of Southern California.