The new populist consensus.After all the political turmoil and profit pain in the past year and a half, out annual LATIN TRADE Consensus Forecast Consensus forecast The mean of all financial analysts' forecasts for a company. reveals surprising news. Latin America is moving ahead on two major fronts: economic growth and free trade free trade, in modern usage, trade or commerce carried on without such restrictions as import duties, export bounties, domestic production subsidies, trade quotas, or import licenses. The basic argument for free trade is based on the economic theory of comparative advantage: each region should concentrate on what it can produce most cheaply and efficiently and should exchange its products for those it is less able to produce economically.. Having weathered in 2002 its worst economic performance in decades, the region is growing again albeit modestly. Mexico and Brazil chug (jargon) chug - To run slowly; to grind or grovel. "The disk is chugging like crazy." along at almost 2% per annum, roughly equal to population growth. Argentina bounces back from a devastating 11% drop in gross domestic product with 5% growth this year--the country's first economic expansion in five years. Venezuela, waylaid in 2003 by a massive national strike, is expected to begin moving forward in 2004. In addition to this remarkable emerging recovery, recently elected populist politicians are actually accelerating free-trade initiatives in the Americas. Brazilian President Luiz Inacio Lula da Silva, no big fan of the Free Trade Area of the Americas, is expanding Mercosur Mercosur The "Common Market of the South," which includes Argentina, Brazil, Paraguay, and Uruguay in a regional trade pact that reduces tariffs on intrapact trade by up to 90%. into a continental common market Common market An agreement between two or more countries that permits the free movement of capital and labor as well as goods and services. for all of South America. At the same time, and perhaps driving Lula's push, the U.S. government seems to be serious about forging free-trade deals with Central America, the Dominican Republic and Colombia. Backsliding in both growth and trade pacts may still occur, but, all in all, an "FTAA lite" by 2005 seems less farfetched than it did a year ago. Who would have guessed that populist presidents would respond to trying economic circumstances with increased integration? That amazing answer and forward progress on deals say volumes about the apparent consensus across the political spectrum on the value of free trade, and that it is here to stay. --Mike Zellner mzellner@latintrade-inc.com P.S. Congrats to Portuguese artists Tiago Rodrigues and Daniel Amaral, who won the first-ever design contest for the annual LATIN TRADE, Consensus Forecast poster |
|
||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion