MercoPress. South Atlantic News Agency

Chile, Peru and Colombia, trade platform for China in South America

Copper remains the main commodity exported from western South America to China

Colombia, Chile and Peru are increasingly the platform for South American trade with China, according to official statistics. The three countries have China as one of the largest and most dynamic trade partners and are working on a common strategy for further liberalization of trade.

For the advancement of such a project the incorporation of Colombia to APEC (Asia-Pacific Economic Cooperation) to which Chile and Peru already belong is essential.

Furthermore together with the US and Australia the plan is to achieve a free trade area to which eventually the so called P4 would also join (Chile, Singapore, New Zealand and Brunei).-

“Overall the South American economies export commodities to China”, said Osvaldo Rosales, head of the Trade and Integration Department from Cepal (UN Economic Commission for Latinamerica and the Caribbean).

The three countries, Chile, Peru and Colombia have their exports to China concentrated in copper, different non expensive meat cuts and oil.

But the strategy which also includes presidential visits from the three countries to Beijing is to increase the inflow of Chinese investments to South America.

So far while Chinese bilateral trade with Latinamerica leaps at 10% annually on average, direct investment from China in the region is marginal.

A Cepal report shows that in 2009, the three countries together received a very modest 100 million US dollars investment from China, less than 1% of the overall foreign direct investment in Latinamerica.

Besides those investments are concentrated in projects of medium technological intensity in the commodities sector which means that the future demands not only guarantees for Chinese investors, but also that South American countries participate in the Chinese production chains.

“This must be a coordinated common effort, quite different from the individual initiatives launched by the different countries”, said Rosales.

“Given its growing role in the world economy, Latinamerica should promote a strategic alliance with China”, said Rosales in line with Cepal’s latest report on trade and development.