Trade

U.S. Losing Out On Latin American Trade

Manufacturers in the United States are losing billions of dollars a year in sales to Latin American countries because Washington has dawdled on expanding free trade agreements with these growing markets, analysts believe. Meanwhile, countries in Asia and Europe, as well as Canada and Latin American countries themselves have been signing trade pacts with one another at a fast clip.

  • The Chilean-American Chamber of Commerce, which represents U.S. firms in Chile, estimates that U.S. Fortune 500 firms are losing $480 million in potential exports each year with Chile alone -- because there is still an 11 percent duty on imports from the U.S.

  • Soon after Congress passed the North American Free Trade Agreement (NAFTA) in 1993, President Clinton promised to expand the free trade zone to Chile, then to Colombia, Argentina, Venezuela and other market-oriented democracies in Latin America.

  • While the U.S. is still the primary investor in the region and its leading trade partner, firms within Latin America and around the globe have seized on the U.S. delay to establish import-export relationships with the region's fast-growing businesses.

  • Canada, Mexico, Europe and Asia have already signed or are working on trade deals in Latin America, and China and Japan are targeting Brazil, Argentina, Chile and Colombia.

Trade blocs are also opening up within Latin America. Three years ago, Brazil, Argentina, Uruguay and Paraguay signed the Mercosur pact, which cut tariffs among them. Last year, Chile signed an agreement with Mercosur -- creating a common market of 200 million people and a combined gross domestic product of almost $1 trillion.

Trade experts point out there are now more than 30 free trade agreements operating in the Western Hemisphere, but the U.S. is a party to only one -- NAFTA.

Last year, U.S. exports to all of Latin America were $51.8 billion.

Source: Adrienne Fox, "Losing Ground on Free Trade," Investor's Business Daily, September 26, 1997.

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