2. LatinAmerica
Introduction
• There is generally a favourable economic environment
for the region in 2005-2006
• Strong International prices for the commodities
produced by the region
• Latin America and the Caribbean region is a net oil
exporter
• However many small and medium countries are net oil
importers (especially for the Caribbean)
• Risks which are facing the region
– Decrease in the oil price
– Improved US economy
– Protectionism in demanding countries
3. LatinAmerica
World economic trends and their impact on the Latin
American and Caribbean region’s position in the
international economy
• World economy has been growing at 4% for the last
four years.
• Risks as of now
– Increase in the oil prices
– Increase in global demand
– Turnmoil in the Middle East
• Oil prices have an impact on global inflation and as well
on countries inflation
• This leads to increased interest rates which damages
the world economy
• The high interest rates makes it harder to borrow for
emerging economies
4. LatinAmerica
World economic trends and their impact on the Latin
American and Caribbean region’s position in the
international economy
• However there is a new and major trend in world
economy which is the decreased disequilibrium
• Latin American economies can be harmed by the
decreased demand in the USA balanced by the
increased demand coming form the Asian countries
especially Inddia, china and Russia
• Interest rates increase will affect the region to a lesser
extend thanks to the increased foreign exchange
resources and the high exports
• Argentina, Ecuador and Uruguay can be hampered by
the larger public debt (50% GDP)
5. LatinAmerica
World economic trends and their impact on the Latin
American and Caribbean region’s position in the
international economy
• Latin American and Caribbean exports are spurred by a
large international demand
• FDI inflows expand less than for the Asian and African
Market
• Latin American economies posted the 2nd largest
export increase after China in 2005
• 2006-2007 increase is expected to be around 7% to 8%
6. LatinAmerica
China and India trade relations with Latin America and the
Caribbean : opportunities and challenges
• Asian countries show a high interest in pledging
strategic relationship with Latin America and The
Caribbean
• Latin America export commodities and imports
manufactures which is complementary with the Chinese
and Indian production
• Mexico and Central America have built a trade surplus
with China
• The same products are exportes to China as to the USA
• China headed Mexico as the first US trading partner
• India has concluded trade agreements with
MERCOSUR and Chile
7. LatinAmerica
China and India trade relations with Latin America and the
Caribbean : opportunities and challenges
• Next step is becoming part of the Chain with Asian
countries
• Proximity to the North American Market is an asset for
Latin America
8. LatinAmerica
DOHA ROUND
• 3 main barriers :
– EU agricultural tariffs
– USA agricultural subsidies
– G20 Manufactures and services tariffs
• 2013 has been set as a deadline to cover agricultural
export subsidies
• The least developed countries (Haiti for this region) are
exempted from all the doha round commitments
• Establishing a worlk program for small countries
(special differential treatment)
• Strengthen the aids to trade for the developing
countries
9. LatinAmerica
DOHA ROUND
• The negociations show that there is little progress in the
sbsidies and agricultural tariffs as well for the
manufactures and services tariffs
• There is a concentration of powerful economies who
sustain each other
• Finally samll economies have very small bargaining
power
• As for the region brazil is part of the G6 which enables it
to negociate much for itself
10. LatinAmerica
Regional integration and trade agreements convergence
• Intraregional trade facilitates export diversification
• Creating integrated policies and institutions
• Agreeing upon uniform customs codes and exemption
of the common external tariffs
• Signing agreements with Canada, USA, EU, Japan,
China ad other Asian countries
• Tariff barriers aare changed by non tariff barriers
• Outside agreements domain over the intraregional
agreements
• More constraints and more binding contrats
11. LatinAmerica
4 Problems Emerge Considering The Trade Agreements
1. Operational issues (customs, codes, storage,
procedures, formalities)
2. Disciplines which are formalised in some agreements
and absent in some others
3. Institutional structures of trade agreements
4. Discrimination between trade partners
