The Secretary General of Aladi (Latin American Integration Association), Sergio Abreu, warned this Thursday (10.12.2020) about the "crisis in the convergence of trade agreements in the region" and regretted that intra-Mercosur trade represents only 11% of the total, compared to 50% in East Asia and 62% in the European Union (EU).
Specialist Félix Peña also highlighted the "wide field of opportunities" that can be opened by free trade agreements, such as the one signed last month by 15 Asian countries, during a virtual meeting organized by the Argentine Chamber of Commerce and Services on the occasion of the 40th anniversary of the Montevideo Treaty, which created Aladi.
Abreu, a former senator for Uruguay's National Party, pointed to the growing "political irrelevance" of the region, in the context of the "crisis of multilateralism" during Donald Trump's presidency in the United States, which included the withdrawal from the Paris Agreement and the non-appointment to the WTO (World Trade Organization) Court of Appeals.
"Currently, there is managed trade, with the US and China making mutual concessions, and the EU as the weak link, in a new scenario in which two-thirds of world trade is intra-firm," said the head of Aladi.
He then pointed out that 60% of the goods exported are semi-finished, which has made the entry of value chains strategic.
Abreu mentioned the challenges posed by the advance of China, the world's leading exporter of goods and the third largest exporter of services, "with 1.200 billion inhabitants and a one-party capitalist system, which allows it to avoid the dangers of disruption due to changes in government."
In this context, Latin America has to address the social issue, since it is the most unequal region on the planet: despite being a reserve of food and natural resources, 6 out of 10 inhabitants live in poverty and even hunger," he said.
«The crisis of integration was compounded by the impact of Covid-19, with the closure of millions of companies this year and the loss of more than 9 million jobs.»
For this reason, Abreu said, a "realistic political will« to boost value chains "with the instruments we already have."
He urged action through companies, with large business meetings that allow for increased trade in goods within the region, in addition to investing to resolve infrastructure and logistics problems.
Peña also projected that the United States will assume, with the change of government, "a more reasonable and balanced position, not so much America First but rather negotiation of multiple balances."
The academic then insisted on the Importance of the Asian agreement, which consolidated previously signed free trade agreements through a network of common rules of origin that will facilitate the circulation of products and value chains.
That agreement, Peña said, "It is not limited to Asia, it can also include Chile, the regional countries of the Pacific Alliance and why not those of Mercosu.r ».
The specialist finally referred to the agreement between the European Union and Mercosur, and acknowledged the EU's reservations on environmental issues, although he considered that "We can't let this opportunity pass us by«.
With information from Télam
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