USAID LAC Trade Update - June/July 2005
 A.
Updates
1. Challenges Facing the Region
Growth in Latin America and the Caribbean (LAC) is estimated
to have reached a 25-year record of 5.8 percent and is expected
to reach around 4.5 percent in 2005, according to Josè
Luis Machinea, executive secretary of the Economic Commission
for Latin America and the Caribbean. These numbers boost the
region’s per capita growth to three percent, he said.
At this rate, the region should meet the U.N. Millennium
Development Goal of cutting extreme poverty in half by 2015,
he added.
Challenges that face the region include: a) risks in the
world economy, b) dependence on natural resources with little
value, c) adoption of reforms to promote efficiency, d) stronger
political will for regional integration, and e) problems of
income inequity.
Machinea’s complete speech is available in Spanish
on the ECLAC
website.
2. Openness is Key to Growth
Openness is key to maintain and accelerate growth and reduce
poverty in the LAC region, according to Ann O. Krueger, first
deputy managing director of the International Monetary Fund
(IMF). She spoke recently to a Conference on Latin America
in the Global Economy in South Bend, IND.
“Latin America is unusually rich in resources, natural
and human, but in recent decades has not lived up to its economic
potential…Because countries in Latin America tend to
be less open than those in other regions of the world, the
potential gains from trade liberalization are correspondingly
greater,” she reported.
She added, “Timing is crucial. Latin America, like
most parts of the world, is currently experiencing more buoyant
growth than it has seen for some time. This is the moment
to press ahead with reforms on all fronts – not least
trade liberalization.”
The complete
speech is available.
3. Challenges and Opportunities of CAFTA-DR
A forthcoming World Bank report provides an early assessment
of CAFTA-DR with a focus on three key themes: a) expected
trade and non-trade benefits; b) actions that Central American
countries need to pursue to capitalize on new opportunities;
and c) identification of population groups that require assistance
to adapt to a more competitive environment.
For more
information.
4. US Meets with CAFTA-DR Countries
The US met with representatives of Costa Rica, El Salvador,
Guatemala, Honduras, Nicaragua, and the Dominican Republic
last April to continue to build skill levels to implement
the proposed trade agreement.
“In the spirit of the CAFTA-DR, trade capacity building
provides a unique chance to support democracy…by promoting
economic growth in the region through development assistance,”
said Acting U.S. Trade representative Peter Allgeier. “Our
assistance will …level the playing field for American
farmers and companies that look to do business in the region
under transparent regimes.”
For more information.
5. Brazil Received Most Foreign Investment
Foreign direct investment into Brazil rose 80 percent in
2004 to over $18 billion, according to a recent report by
the Economic Commission for Latin America and the Caribbean.
For more information.
B. Resources
1. World Bank Website on CAFTA-DR –
The World Bank has launched a new website on CAFTA-DR
that includes a statement by former president James D. Wolfensohn,
the Bank’s strategy to support the free trade agreement
and preliminary conclusions of an upcoming report.
2. Global Development Finance Report 2005
-- A recently published report
contends that progress toward Millenium development goals
has been slow and uneven, especially in Africa.
3.Lessons from NAFTA – A book
by Daniel Lederman, William Maloney, and Luis Serven concludes
that NAFTA raised external trade and foreign investment inflows,
had a modest effect on Mexico’s average income per person
and achieved a modest reduction in poverty and an improvement
in job quality.
C. Upcoming Dates
June 20-23 – Inter-American
Seminar on Government E-Procurement by the Chilean Procurement
Directorate and the OAS.
June 25-30 – International
Food and Agribusiness Management Association meeting in
Chicago, IL, featuring “Re-inventing the Food Chain:
New Markets, Consumers and products.
June 27-29 – USAID
Workshop on Tax and Pension Reform in Washington, DC.
November 1-3 – Eradicating
Poverty through Profit Conference in Frankfurt, Germany.
November 4-5 – IV
Summit of the Americas in Mar del Plata, Argentina.
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