Trade among Latinamerican countries is expected to increase 22% during 2010, which is higher than forecasted, according to the UN Economic Commission for Latinamerica and the Caribbean, Cepal. This follows a drop of 0.9% in 2009 when the full impact of the global crisis.
“It’s a significant recovery which has economic and social effects” said Osvaldo Rosales head of Cepal’s International trade and integration office. “Trade is quite diversified with emphasis in manufacturing and labour intensive”.
“Latinamerican countries overall have mono-productive structures and a range of 2.500 to 3.000 items with some degree of added value”, said Rosales, which has resulted in the creation of better paid jobs generating a fairer distribution of income.
In this framework Rosales said it was necessary to promote policies that stimulate regional trade particularly now that the Latinamerica is exposed to a global context of crisis and uncertainty.
“The important side is that we have mechanisms to help finance intra-regional trade but on the other that we need to reduce tariffs”, pointed out Rosales who anticipated that the prospect of a free trade agreement between Brazil and Mexico, (currently in the discussions process) “is crucial because they represent the two largest economies of Latinamerica”.
Besides, the plan is to make it extensive to other countries.
However Rosales also warned that the current bonanza in the region is exposed to serious risks, particularly the appreciation of currencies affecting export competitiveness, given the lower economic activities in the European Union and the United States.
Cepal also recommends the importance of having closer links with China since trade with the Asian giant has been increasing steadily since the year 2000.
Exports from the region which in 2009 dropped 22.6% are expected to increase 21.4% in 2010, with the Andean Community countries leading, up 29.5%, followed by Mercosur, 23.4%.
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