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Latin America’s Free-Trade Champions

What Brazil (and the Obama administration) can learn from Chile, Colombia, Mexico, and Peru.

by
Jaime Daremblum

Bio

May 16, 2013 - 12:26 am
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That’s why it was so disappointing when, on May 8, Brazilian diplomat Roberto Azevedo was chosen over Mexican economist Herminio Blanco to be the next director-general of the World Trade Organization. Azevedo has consistently defended Brazilian protectionism, while Blanco was an architect of NAFTA. As the Wall Street Journal pointed out following his selection, “Mr. Azevedo is by all accounts a charming diplomat who won because of support among developing nations. Yet he won that support in large part by helping to scuttle the Doha round of free-trade talks. Mr. Azevedo was Brazil’s chief Doha negotiator, and opposition to freer trade in manufacturing by Brazil, India, South Africa, and other emerging economic powers made a worthwhile Doha deal impossible.”

The good news is that Chile, Colombia, Mexico, and Peru are increasingly viewed as the four most successful large economies in Latin America. In fact, analysts at Nomura, the Japanese financial giant, have predicted that Mexico could supplant Brazil as the region’s biggest economy by 2022. The combination of strong growth in the Pacific Alliance countries and sluggish growth in Brazil is helping convince other Latin American governments that free trade and open markets are better than Brazilian-style protectionism. (Roberto Setúbal, the CEO of Latin America’s largest bank, recently said that Brazil “clearly” had to change its economic model.)

Unfortunately, the Obama administration still has not pushed for a hemispheric free-trade zone of the sort championed by George W. Bush and Bill Clinton. Yes, administration officials are trying to negotiate a TPP deal, but they have depicted TPP as part of their “pivot” or “rebalancing” to Asia. Apart from belatedly signing the Colombia and Panama free-trade accords — both of which originated under the Bush administration — President Obama has done very little to promote greater U.S. trade with Latin America. Indeed, while the Pacific Alliance countries are busy pursuing economic integration across the hemisphere, the United States remains a mostly passive observer.

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Jaime Daremblum, who served as Costa Rica’s ambassador to the United States from 1998 to 2004, is director of the Center for Latin American Studies at the Hudson Institute.

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Socialism in reality is a crony capiitalism. Comapnies in Brazil pay politicians to close protect them from outside comptetition. Mexicans are compteting in world markets. Nissan will be opening it's 3rd plant in Aguascalientes, Mexico. Aerospace plants are popping up in Queretaro.
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