This article is adapted from AQ’s special report on Lula and Latin America
Latin America has a unique opportunity to integrate and grow its economy—an opportunity that requires focus and leadership. As an elder statesman, President Luiz Inácio Lula da Silva could provide some of that leadership.
Over the last 30 years we have lived in a world which benefited enormously from globalization. Multiple trade agreements were signed among varying countries to facilitate trade and investment, and the world benefited from this through lower prices. China emerged as a major buyer of commodities and long-term investor around the world, including Latin America. But most of the trade and investment agreements made by countries in the region were basically bilateral and not focused on more integration across the Hemisphere. This has left huge space for China to grow its presence throughout South America, while trade between Latin American countries remains very low.
Governments around the region still compete for investment in their own countries as opposed to envisioning a broader, regional trade and investment strategy. This is understandable, since all countries need growth, investment and quality jobs. However, the result is that Latin America’s commerce continued to decline as a percent of global trade.
Now, just the magnitude of the supply chain opportunity could change that. As we think about building a secure supply chain, we should think about including the entire Hemisphere. Brazil could play a huge part, if not lead this discussion which involves most of Latin America, particularly countries with existing free trade agreements with the U.S.
Seizing this opportunity would require changes, including tariff structures. But wouldn’t it be worth it? The result would be a stronger, more integrated and secure South America, which, with North America, could enshrine our Hemisphere as the most powerful and productive in the world.
So here is the opportunity for President Lula. He could lead Brazil, Latin America and the Hemisphere to that end.
Listen to this episode of The Americas Quarterly Podcast for more on Lula’s foreign policy
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