The Latin American and Caribbean Economic System (SELA) organized a webinar on September 24, 2020, with the aim of following the evolution of integration during the pandemic, focusing on investments, social inclusion and transformation of the development paradigm.
Following the welcoming remarks by Ambassador Javier Paulinich, Permanent Secretary of the Latin American and Caribbean Economic System (SELA), all speakers agreed on the priority of strengthening integration mechanisms and development strategies for the region in the post-pandemic context.
The first of the panels had as a guest the director of Intal-Bid, Pablo García, who revealed that In a context of strong deterioration in global trade and limited progress in the multilateral sphere, different integration agreements are managing to take important steps.
The director of INTAL, when asked what happened with integration during the pandemic, said: “Things happened. The most relevant was the recovery of the European Union where leaders agreed, in July 2020, on a €750 billion Recovery and Resilience Facility. This is relevant for the deepening of the European bloc after the Brexit shock.”
Pablo García added: “The agreement was also signed T-MEC Starting July 1, in the midst of a pandemic, this is an important step in terms of integration, as it replaces the old NAFTA and includes new chapters on labor, environmental, and energy issues, among others.”
“Another advance is the Digital Economy Partnership Agreement (DEPA) signed by New Zealand, Chile and Singapore, whose objective is to promote inclusive and sustainable digital trade," he said.
In this regard, INTAL states that there has been lukewarm progress in Latin America and the Caribbean, but integration mechanisms have begun to react despite the pandemic.
"The regional contingency plan put together by the Secretariat for Central American Economic Integration (SIECA) is the most important. It is a very ambitious plan to mobilize 1900 billion dollars to contain the economic impact with a perspective of regional coordination," he said.
In addition, the director reported that the Mercosur approved a special fund aimed at improving COVID testing capacity in member countries. CARICOM set up a system to reinforce medical responses through expert professionals. In turn, the PROSUR is actively working towards the reopening of borders and joint purchasing mechanisms.
“In the region, the responses were more modest, but regional integration mechanisms began to mobilize in response to the pandemic,” García noted.
Integration, a necessity and an opportunity?
“In the current crisis, integration is a necessity and also an opportunity in Latin America and the Caribbean,” said the economist specializing in economic development. He explained that once the health crisis is over, “we will surely face a scenario where countries, especially developed ones, will look more inward, preserving security of supply and relying on self-sufficiency, possibly with a greater dose of protectionism, at least for a while.”
«In this scenario, these markets will move even further away from us, therefore»Smart and pragmatic regional integration will be key", Garcia stressed.
“To this end, it is essential to advance the integration of the region through convergence in the multiplicity of agreements that we have in Latin America and the Caribbean,” he said. “Rules of origin play a key role here. The region has 47 rules of origin in 33 preferential trade agreements, which generates a high cost of compliance.”
“In addition, this region has to work on trade facilitation”, García added, detailing the progress made during the pandemic: interoperability, a single window for foreign trade, coordinated border management and agreements for the recognition of authorized economic operators.
“This desire for integration expressed by Latin Americans in the midst of the pandemic proves that integration is not an option but a necessity,” concluded the INTAL representative.
ALADI's flexible tools
In turn, the Undersecretary for the Development of the Free Trade Area, Álvaro Espinoza, referred to the mechanisms that ALADI has, characterized by the flexibility to enter into agreements at a regional or bilateral level with adhesion clauses. He said that this mechanism "encourages the development of strategies for convergence among its member countries.”
The diplomat also highlighted the actions such as training, information and support for SMEs, the Digital Certification of Origin and the Foreign Trade Information System (SICOEX) that ALADI has to promote trade. Also, the development and promotion of initiatives that encourage meetings between entrepreneurs in the region, such as the EXPO ALADI-Ecuador 2020, a multi-sector business macro-round that this year is taking place virtually.
For the panelists, optimizing integration is a necessary and effective piece to accelerate recovery in the region. The inter-American system, which includes the IDB and ALADI, has a fundamental role in this task, because reactivation cannot be delayed.
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