By:Cary Good and Jan Mazotti Issue: Biennial of the Americas 2010 Section:The Americas Roundtables During the Roundtable on Trade: Leveraging Partnerships for Sustainable Economies some very interesting information about the hemisphere emerged – like the combined GDP is more than $19 trillion - almost 30 percent of the world’s GDP. It was apparent that the hemisphere was a bigger trade contender than most previously thought. Discussions focused on the value of attempting to leverage current trade agreements while pushing for the ratification of pending agreements with Colombia and Panama, and while stressing the importance of fair competition, encouraging transparent rule-making procedures as well as non-discriminatory laws and regulations.
Just prior to the Biennial events, President Obama announced the National Export Initiative which is expected to double the amount of U.S. exports over the next five years while creating jobs and stimulating business development. Through the discussion it was clear that government officials and business leaders alike were focused on trade agreements. “At the policy level, this shows that we need strong institutions and infrastructure to be catalysts to engage policymakers and businessmen,” said Assistant Secretary for Trade Promotion and Director General of the U.S. and Foreign Commercial Service, Suresh Kumar.
Important to recognize is that Latin America is not one country — one cannot talk about the hemisphere as one entity; the countries must be recognized by their differences. Co-Managing Partner at Farallon Capital Management, Thomas Steyer said, “Americans do not have a current up-to-date understanding of South America. Do not think of Latin American as one entity, as all countries are very different.” Brazil, for example, has formed a meaningful trading partnership with China while many other South American countries are actively trading with Canada. There are incredible places to invest within the hemisphere — places with stable legal systems and with governments that support the idea of private enterprise. “Colombia, Peru, and Chile are on fire right now!” said Steyer.
The incredible trading relationship between the U.S. and Canada is the largest bilateral trade relationship in the world, with the equivalent trading of $1.5 billion a day in goods and about 300,000 people per day crossing the shared border.
“Trade eventually brings people together,” said Kumar. It is a means to create wealth that can then be re-invested back into infrastructure, which helps bring up the overall quality of life. “Being export ready needs to be reflected in the countries democracies. Some of these countries don't have the tax structure to generate the revenue,” said Adam Blackwell of the Organization of the American States. It is a perfect time to re-evaluate trade agreements while businesses across the nations learn just how they can connect to the right technology, businesses and products within these countries.
For example, Liberty Global, a multi-billion dollar U.S.-based telecommunications company is investing heavily in the Americas. “We have 27 million subscribers in 14 countries and while we are trying to meet the demands of the markets, we continuously work to promote information sharing throughout the region,” said Liberty Global’s CEO Michael Fries. Beatrice Rangel, president and CEO of AMLA Consulting agreed. She said, “Global support for access to knowledge in the hemisphere is essential.”
While markets may have significant growth opportunities, the roundtable participants recognized the need for nurturing environments that had some semblance of fair government regulations, pro-active engagement with local constituents, and sustainability measures that are future focused. “Trade is not an end in and of itself — it is a means to creating a better life,” said Enrique L. García of the Andean Development Corporation. With respect to local engagement, Rangel noted, “Foreign investment projects often fail because they are not in touch with local community leaders. These people often are filled with fear. But, at the end of the day,” she said, “Latin American poor just want to be middle class.”
Businesses across the Americas are overwhelmingly willing to engage in environmental sustainability measures. They understand that the old way of doing business is just not feasible. Barry Featherman, executive director for the Global Center for Development and Democracy suggested that as we expand trade and economic investment we must think of the planet. He spoke of the uncontrolled pollution and contamination in China as an example of what not to do. Alberto Alemán Zubieta CEO of the Panama Canal Authority said, “Trade agreements allow people to understand the benefits of caring for the environment.” And he should know. He is in charge of the largest hemispheric construction project – the expansion of the Panama Canal. Environmental opponents argue that the expansion will have significant environmental impacts like deforestation, excavation cleanup, runoff and wildlife endangerment to name a few, but the organization is diligent in keeping the engineers on task with a safe and environmentally sustainable development and build plan.
Close to home, trade is a touchy subject. While the U.S. nurtures and maintains its relationship with Canada, it is important for our population to recognize where we stand compared to India and China as it pertains to trade in the Western Hemisphere. “Are the U.S. producers able to compete?” asked Jim Polsfut, president of the Biennial of the Americas, to Kumar. “Can American business compete...? They always have. If we can create the environment that leads to stability and predictability, there is a willingness to interact and invest,” he said.
Corporate Social Responsibility (CSR) is another important aspect to trade and to improving the human condition. With CSR being contributed through trade agreements, it helps bridge the gap between the rich and the poor. Through collaborative negotiations, both sides of the agreements have the opportunity to benefit by providing something that they have to offer, whether it’s through labor or capital investment. “We need to encourage political stability; we need to shrink the gap between the rich and poor, through investment and trade agreements,” said Featherman.
Ultimately it is business that creates jobs — not government. We must embrace stability, predictably, infrastructure and institution by understanding that trade is to our benefit. But we also must understand that it is a way to improve the quality of life for all through better education systems, by engaging women into the workforce, by increasing access to healthcare, and by reducing poverty. That’s what it is about!