Latin America should use the current financial crisis as an opportunity to reach more free trade agreements.
BY RICARDO ERNST
During the last meeting of the Asia-Pacific Economic Cooperation (APEC) forum, free trade again became a key issue during the talks. The macro-economic benefits and production efficiencies that can be achieved are known. The virtues of free trade are undoubtedly a direct way to confront the global financial crisis.
During the meeting, foreign ministers and trade ministers of the Asia-Pacific recommended that their leaders express their opposition to protectionism and renewed their commitment to deepen free trade to tackle the global financial crisis. As reported by America Economia, the Peruvian Foreign Minister Jose Antonio Garcia Belaunde, said that as a result of the severe financial crisis affecting the economies of the region, they have renewed their commitment to strengthen cooperation through APEC as well as further promote free trade.
And this comes as a response to some protectionist pressures that have arisen as recently expressed at the meeting of the G20. According to the Peruvian Minister of Economy and Finance, Luis Valdivieso, countries must avoid the administrative measures of protectionism as they don’t promote productive efficiency.
The outcome of the APEC meeting was a rejection of protectionism in the group, as it recommended avoiding tariff barriers as well as supporting the proposals of the Group of 20, which in Washington had pledged to bolster economic growth and improve market regulation.
Even though is not a member of APEC, Colombia appears to have heard the message. Given the delay in approving the free trade treaty with the United States, and the apparent rejection of President-elect Barack Obama to it, President Uribe has not remained idle. During the APEC meeting itself, Canadian Prime Minister Stephen Harper and President Uribe signed a trade agreement between Canada and Colombia. Meanwhile, Colombia signed a bilateral investment agreement with China, giving businesses of both nations preferential treatment.
What is the conclusion? The current financial crisis should be taken as an opportunity to reach trade agreements. Free trade is an engine that can serve the countries of Latin America to overcome the havoc of the current crisis.
Latin America needs to explore other regions that are seeking to defuse the crisis in the same way. Protectionism should not be confused with a real solution. Only free trade can help countries to move forward at this time.
Dr. Ricardo Ernst is deputy dean of the McDonough School of Business at Georgetown University and co-director of Global Logistics Research Program. He is also editor-in-chief of Globalization, Competitiveness and Governability. This column is based on his commentary on CNN en Español.