Latin America face to face with Asia
San Jose, Costa Rica, 14 May 2010 (IICA). The proliferation of trade agreements with Asian nations such as China, India, Singapore and Taiwan, dealing with everything from tariff reductions to the creation of friendly relations, have given rise to an array of challenges and opportunities for the countries of Latin America, according to specialists speaking at the Distance Education Center of the Inter-American Institute for Cooperation on Agriculture (IICA), in Costa Rica.
On May 13, the former Deputy Minister of Foreign Trade of Costa Rica, Doris Osterloff, presented the principal findings of a study on the free trade agreements negotiated by Latin America with the Peoples Republic of China, India, Singapore and Taiwan, a publication prepared by IICA to provide the production, export and import sectors of the region with more information on these accords.
The study was prepared in response to a request from the Federation of Exporters of Central America (FECAEXA) and will be used as an input in preparing for future negotiations.
In a videoconference that linked participants in Costa Rica, Nicaragua, Honduras and Guatemala, Osterloff reviewed agreements, especially the one between China and Chile and Peru; India and MERCOSUR; Singapore and Panama and Peru; and Taiwan and El Salvador, Honduras, Guatemala, Nicaragua and Panama.
To date, these four Asian countries have signed 11 regional trade agreements with Latin America, involving 15 countries in both regions.
“The more modern trade agreements tend to be much more than exercises in reducing tariffs. They contain increasingly complex provisions which govern trade relations between countries, including those related to services, investments, rules of competition and other matters not related to trade such as labor and environmental concerns,” Osterloff stated.
As countries sign more and more trade agreements, they are finding similarities in the basic rules that are adopted, which is why public and private negotiators look favorably on analytical tools such as this study, she added.
Friendly business
Costa Rican entrepreneur Alberto R. Guell, who has headed several trade missions to Asian markets, suggested focusing efforts if it is to be possible to successfully participate in the economy and the culture of these countries.
“Establishing friendly relations with people in Asia is more important that the business itself. To know this and know about their culture are essential to success,” he said.
Guell believes that the first step in initiating negotiations with Asia is “to define which country is to be negotiated with” because the differences are considerable and will determine “the way of doing business.” In addition, he underscored the importance of “distances between cities.” Using China as an example, he mentioned that a “secondary city” may have up to 1 million inhabitants and be a three-hour plane ride from the business heart of that country, Hong Kong.
He pointed to the urgency of “improving the distribution channels” producers use to make their products available to consumers, and to the need to take into consideration differences in terms of “production time.”
According to IICA Regional Specialist in Policies and Trade Negotiations, Juana Galvan, “We must understand that “given the trade opening under way in our countries, competition is coming from everywhere in the world; we are facing a global market of challenges and opportunities.”
Also present were the Director General of Foreign Trade of Costa Rica, Federico Valerio; IICA’s Director of Technical Leadership and Knowledge Management, James French; and the IICA Representative in Costa Rica, Byron Miranda.
The full study is available at: http://webiica.iica.ac.cr/bibliotecas/RepIICA/B1587e/B1587e.pdf
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