MercoPress. South Atlantic News Agency

Paulson calls for more integration and trade with Latam

USTreasury Secretary H.Paulson

United States Treasury Secretary Henry Paulson officially opened on Monday the 49th general assembly of the Inter American Development Bank, IDB, calling for greater integration of trade and openness between Latinamerica and the US and warned about what he defined as “protectionist interests”.

Speaking in Miami at the annual meeting of the IDB, Paulson said greater integration of trade and openness not only helps Latin American countries, but the United States as well. Paulson again warned against what he termed "protectionist interests," saying that some efforts to draw the US out of greater participation in international trade are a "disturbing trend." "History has shown that those countries that open themselves to trade and investment prosper, while those that don't are left behind" said Paulson speaking at the Miami Jackie Gleason theatre. "There is no doubt that we are in a time of rapid economic change. What we need to do is figure out how to deal with the job losses that come from trade and make sure that we do not turn isolationist". He insisted that the US remains "firmly committed" to expanded world and regional trade. Paulson's speech comes in the midst of the international financial markets turbulences caused by the mortgage crisis in the US which could also plunge the world's leading economy into a recession. Necessary improvements to increase Latin American participation in world markets include greater efficiency and integration, he said. Where it takes an average of six days for a business to move its product from warehouse to port in the United States, it takes 22 days in Latin America. IDB, a multilateral financial institution extends loans and grants to help finance development projects and also aimed at reducing poverty, expanding growth and increasing trade and investment. By the end of 2007, IDB had approved over 156 billion US dollars in loans and guarantees to finance projects with investments totaling 353 billion, as well as 2.4 billion in grants and contingent-recovery technical cooperation financing. "Financial services are the backbone of any modern economy, and access to capital can mean the difference between a people who thrive rather than just merely survive," Paulson said. "Effective access to financial services can enable even the poorest households to manage their financial resources." Paulson also noted he had been questioned several times by IDB meeting attendees about the health of the US economy, which continues to be battered by the secondary effects of the 2007 housing market collapse. He said that although the housing correction continues, US long-run economic fundamentals remain sound and "the economy will work through the rough patch as it has in the past". Latin American markets appear poised to weather the US downturn with minor impacts, he added. "Closer economic ties between nations create common interests and common goals that will lead to solutions rather than conflicts," Paulson said. Although the prevailing opinion in Latinamerica is that the region is better prepared to confront the current situation, some experts believe Latinamerican countries are "vulnerable" and the longer the turbulence, "greater will be the consequences".