Additional government revenue could help bolster educational opportunities and beef up law enforcement. Greater domestic manufacturing in the region could also have the added benefit of promoting political stability while reducing crime and corruption by adding more good-paying jobs to the tax base. The region's governments have signed almost 450 bilateral trade deals since 1973.Ī new regional trade bloc would need both broad buy-in from Latin American nations and a clear focus on the concrete goal of bringing more manufacturing to the region.Ī successful regional trade agreement could reverse decades of economic stagnation and bring many benefits, including lifting nearly 90 million Latin Americans out of extreme poverty. Though Mercosur has underachieved, most Latin American countries are eager for more trade. And those members have focused on intra-regional trade at the expense of exerting leverage on a global scale.
#EU TRADE BLOCS FULL#
Only four of the region's 20 countries are full members of the bloc. Over the past 30 years, Mercosur has fallen short. In 1991, the presidents of Argentina, Brazil, Paraguay, and Uruguay signed a treaty establishing a free-trade zone known as Mercosur. Latin American countries have tried to create such a cross-border regional trade alliance before. The region's pooled GDP of $5.5 trillion could provide considerable deal-making leverage. Latin American countries would be able to secure far better trade agreements by working together. But economists agree on one of the most important factors-the region's lack of successful trade agreements with the rest of the world.Ĭreating a pan-Latin American trade bloc, not unlike the European Union, could help reverse some of these trends. There's no single reason that accounts for Latin America's dearth of value-add manufacturing industries. The Darien Gap, which connects North and South America, is where the Panamerican Highway was never completed due to severe terrain, high cost and myriad environmental concerns. Immigrants from Haiti depart a base camp for their trek through Darien Gap on Oct. Asian countries, on the other hand, saw their share of global manufacturing jump from 23 percent to 37 percent between 19. "Latin America has long been on the edges of global supply chains, providing raw materials for others to transform," as one recent Bloomberg article put it.Īccording to a United Nations-sponsored report, Latin America accounts for just 5 percent of global manufacturing exports, a number that hasn't changed for decades. Argentina, Bolivia, and Chile, for example, hold over half the world's lithium-a crucial element of rechargeable batteries, like those that power electric vehicles.Ĭentral and South America have consistently contributed such raw materials to global supply chains without reaping the economic benefits of value-add manufacturing. Some resources are especially concentrated. Latin America is famously rich in raw materials and natural resources, from oil and gas to lumber and ore. The whole world stands to benefit from such an arrangement. It's time for Latin America to say, "No más." The continent can take inspiration from its former colonizers in Europe-by uniting as a common trade bloc. Yet the region and its resources remain subject to exploitation by the rest of the world. It's been more than 100 years since most Latin American countries secured their independence.
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