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Background
• Six years of economic bonanza 2002-2008 (induced by China’s appetite for natural resources $ commodities)
• Grappling with the global recession of 2008-2009 (how to be counter-cyclical)
• Structural problems: the world’s highest rates of inequality and public insecurity (poverty & unemployment)
• In which direction in the near future? Populism or market economics?
World Economic Forum in LA
• A stronger cooperation and integration in Latin America is needed
• The entire process has been jeopardized by ideological and political differences
• Trade should is being used as political weapon
Cartagena, April 7-8th 2010
TOPICS
1. Latin America at the WTO: ignorance or pessimism?
2. The regional environment: many steps backwards?
3. The preferred venue: bilateralism within and without.
Everybody member of WTO, but major players?
Country Number of cases at the DSB (as complainants)
Argentina 15
Brazil 24
Chile 10
Colombia & Panama 5
Costa Rica 4
Guatemala 7
Mexico 21
Tariff profiles of LACountry Bound tariff (%) MFN tariff (%)
Argentina 31.9 12
Brazil 31.4 12.2
Chile 25.1 6
Colombia 42.9 12.5
Costa Rica 42.8 5.5
Mexico 36.1 12.6
Peru 30.1 10.2
In the 90s: rising integration
• FTAA (ALCA): launched by presidents G.H.W. Bush (Enterprise of the Americas Initiative, 1990) & Clinton (First Summit of the Americas, 1994)
• APEC (1993)• WTO (1994)
THREE MODELS OF INTEGRATION
[ALADI, LAIA (1961,Treaty of Montevideo, 1980)]
1.Andean Community (1969 & 1996) & CACM (Protocol of Tegucigalpa, 1991)
2.MERCOSUR (Treaty of Asuncion, 1991 & Treaty of Ouro Preto, 1994)
3.NAFTA (1992)
Intra-regional trade (exports)
CAN countries 1990-1999 2000-2006
Bolivia 41,8 51,3
Colombia 24,6 31,9
Ecuador 22 30,4
Peru 17,5 19,1
Venezuela 50,7 35,7
Problems
• Lack of progress in further economic integration: the common tariff an elusive goal
• Deep political differences: Bolivia & Ecuador vs. Colombia & Peru
• Countries unable to obey common rules • Venezuela left in 2006• Everyman for himself: free trade agreements
with multiple external partners• New integration schemes in LA: UNASUR, ALBA
Intra-regional exports1980-1989 1990-1999 2000-2006
Argentina 20,5 41,5 42,4
Brazil 13,7 22,3 25,9
Paraguay 45,9 55,5 64,3
Uruguay 39,7 50,7 42,3
Challenges
• Weak institutional structures and nature of the process: state driven
• Venezuelan membership: stalled in Paraguay because the democratic clause
• Huge imbalances: in 2008 Brazil exports US $193 b., Argentina US $68.3 b.; Uruguay US $5.9 b. & Paraguay US $4.3 billion
• The echoes of 2 crisis: 1998 & 2001
EE.UU: the most controversial partner
• Mexico: entered into force January 1st 1994• Chile: entered into force January 1st 2004• CAFTA-DR: signed in August 2004• Peru: entered into force January 1st 2009• Colombia: signed November 2006• Panama: signed June 2007
European Union
• Mexico: March 2000• Chile: November 2002• Colombia & Peru: concluded April 2010• CAFTA: in negotiations• MERCOSUR: in negotiations
ASIA & AFRICA• Australia: Chile (2008)• China: Chile (2005) • Japan: Mexico (2004); Chile (2005)• Korea: Chile (2003)• India: MERCOSUR (2004); Chile (2006)• Israel: Mexico (2000); MERCOSUR (2007)• P4: Chile (2005)• SACU: MERCOSUR (2000)• Turkey: Chile (2009)
Among Latin American
• ALADI: regional & bilateral (AAP)• 86 AAP among ALADI members (Mexico,
Chile, CAN & MERCOSUR) and other LA countries (incl. Cuba, Guyana, Surinam)
• But some few directed to free trade (art. XXIV GATT 1994)
Conclusions
• NAFTA led the way with the US, but fraught with problems (Colombia, Panama, Ecuador, Venezuela, MERCOSUR)
• European Union in similar situation (plus CAFTA)• China the major question: Brazil signed several
mineral agreements on April 15th 2010; clashing interest remain (undervalued yuan undermines Brazilian industry, Brazil closed economy & bid for the SC).
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