SANTIAGO: The Economic Commission for Latin America and the Caribbean (ECLAC) has predicted that regional exports will grow by 1.5 per cent and imports by 4.5 per cent, respectively, this year.
In its annual report, titled “Latin America and the Caribbean in the World Economy 2013”, ECLAC said the foreign trade performance of Latin America and the Caribbean “reflects the weak global economy”.
It said regional export values were expected to grow by just 1.5 per cent in 2013, which is similar to the 1.4 per cent growth observed last year.
ECLAC is predicting that imports would expand by 4.5 per cent, “which will bring the region’s trade surplus down to US$8-billion in 2013, compared to US$41-billion in 2012”.
The Commission said that the weak global economy continues to affect world trade.
“The latter is expected to grow by around 2.5 per cent in volume in 2013,” it said. “This would mean trade growing more slowly than global GDP (Gross Domestic Product) for the second year in a row – which has not been seen since the 1980s. Latin American and Caribbean countries whose exports are mainly to China and the rest of Asia will probably chalk up higher volume growth, while at the same time experiencing a gradual change in demand from commodities to more processed products.”
In the report, ECLAC said that one of the main features of the current international economic situation was “mega-regional negotiations” linking the main world production networks: Europe, North America and Asia.
It said that several “mega-regional negotiations” underway were changing the face of world trade, identifying some of the main examples as the Trans-Pacific Partnership Agreement (TPP), the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States, the Regional Comprehensive Economic Partnership (RCEP) and the free trade agreements between China, Japan and the Republic of Korea.
“All of these initiatives aim to create large economically integrated spaces at the regional level (in Asia), as well as at the trans-Atlantic and trans-Pacific levels,” the report said. “These mega-negotiations include topics that are not regulated by the World Trade Organization and that are important for international production networks. The agenda is becoming increasingly sophisticated, with a view to harmonizing the operating rules of various production networks to facilitate the operations of multinationals in North America, Europe and Asia.”
According to the document, as well as diverted trade and investment flows, these negotiations could result in the region’s countries facing “restricted access to knowledge and innovation opportunities provided by new technologies, if the positions of the lobbies observed so far in the main economies prevail”.
It said mega-regionalism “poses the challenge of improving the international economic standing of the region’s countries, which would help to produce sub-regional value chains and progress towards pluri-national industrial policy practices”.
The document, therefore, examined the potential of some sub-regional production networks, as well as suggested policies that place learning about clusters and new-wave industrial policies at the heart of regional integration.