Free trade zones represent a huge opportunity for Latin America to recover from the Covid-19 crisis, according to speakers at the World Free Trade Zones Organization (WorldFZO) webinar held on Wednesday, June 24, 2020.
Addressing the issue, Martin Ibarra, vice president of WorldFZO, explained to the hundreds of international trade participants, Potential of free zones in the process of transforming supply chains, accelerated by the pandemic, based on concepts such as consumer proximity, revaluation of internal and regional markets, exchange of new products and sustainable integration in social, environmental and labor matters.
Ibarra pointed out that "the growth of international trade, according to the WTO, will not occur between the same products or between the same countries, but will be subject to the concept of 'creative destruction' by Joseph Schumpeter”.
Along these lines, he explained that the region, through free trade zones, could grow economically, increase participation in new value chains and receive investments.
The expert added: “A very important element is the integration of global value chains. The concept of 'Made in America' is fundamental, just as there is the concept of 'Made in Europe' with reference to the fact that products circulate freely in that area.” And he clarified that “the same does not occur in America because the presence of the US, the largest importer in the world, did not allow for a trade agreement with all of Latin America. The US has six free trade agreements with eleven countries in the region. The association of North American chambers in Latin America is being considered for the accumulation of origin in those countries that have a free trade agreement with the US. It is an important idea at the economic, geopolitical and regional level for our productions.”
Ibarra added that "economies are moving from containers to packages. Therefore, free zones must adapt to the reality where the e-commerce will account for 30% of global trade for manufactured products, call centers, data centers, logistics and international distribution in the next five years.”
He added that “the objective of the free zones is to double their production in order to jointly plan how to influence global value chains and increase jobs from one million to three or four million.”
“The opportunities offered by free trade zones are enormous,” he concluded.
Acting globally and locally to prosper together
The meeting was moderated by Samir Hamrouni, executive director of the World Free Zones Organization, who discussed good practices that Latin America can implement post-Covid-19.
Other participants at the event were Juan Ariel Jiménez, Minister of Economy, Planning and Development of the Dominican Republic, who discussed the topic “Economic Perspectives of Free Trade Zones,” and Manuel Tavares, President of the ITABO Industrial Park (PIISA).
The virtual meeting is the Second series of free webinars that provides the Global organization present in 150 countries, to explain how free trade zones will contribute to the recovery from the post-pandemic crisis, using the best of globalization and localization to prosper together.
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