Trade Links with the New Latin America
Beyond the Boom: Towards a Mature LAC-Asia Relationship
The Inter-American Development Bank (IDB), through its Integration and Trade Sector (INT), in partnership with the Financial Times and The Banker, launched and hosted the second event of the Trade Links with the New Latin America series, held on September 3rd in Miami.
This strategic series of forums provide an in-depth view of the key opportunities and barriers impacting Latin America and the Caribbean’s (LAC) ties with Asia and the Pacific.
The Miami Forum brought together over 70 senior policy makers and business leaders for a unique, high-level discussion on the emergence of the new global trade architecture and the Asia and the Pacific-Latin America trade and investment ties in the rapidly changing global trade environment. The discussion centered on the key policies and business initiatives that will bolster the relationship between these two rapidly growing regions, allowing them to capitalize on the vast potential offered by trade, investment and cooperation.
In this regard, Santiago Levy, IDB Vice President for Sectors and Knowledge and Keynote Speaker at the Miami event, emphasized how the trade boom in the last fifteen years - mostly driven by market forces - has given the Asia-LAC economic relationship historically unprecedented importance. Nevertheless, since 2012 the boom has come to an end, marked by a significant slowdown in China’s growth and a marked drop in commodities prices. For Levy, the slowdown - rather than signaling a drastic reversal in the relevance of LAC-Asia trade or a significant change in its pattern - seems to be explained mostly by a cyclical adjustment.
“Inevitably there is uncertainty regarding the future of Chinese growth. There is a lot of discussion these days as to whether this top market adjustment is just a financial event or is a signal of a sort of deeper trouble in the Chinese economy. But beyond the short run, I think what´s important is to realize that there´s been major transformations in the relationship between Latin America and China and I think that despite the short-run trouble, there´s huge potential for the medium term, and that´s where we should keep our eyes based,” explained Levy.
Indeed, global trade is changing at a fast pace and Latin America is no exception to the shift of international trade to Asia and the Pacific. Trade and investment links between Asia-Pacific and Latin America have multiplied in recent years and as a consequence, Asia-Pacific has now overtaken the European Union as Latin America’s second business trading partner after the United States.
Levy advised that “further gains, particularly on LAC’s export diversification, will hinge on a more proactive trade policy, addressing both traditional and non-traditional trade barriers, and on LAC’s ability to increase its total factor productivity.”
To see the full agenda of the Miami event and learn more about the upcoming series in Shanghai, visit: live.ft.com/TradeLinks