Newspaper article The Christian Science Monitor

Latin America's Needs Bush's Trip South Will Give Financially Strapped Governments an Opportunity to Assess the US Commitment to Expanded Trade, Debt Reduction, and Greater Investment in the Region

Newspaper article The Christian Science Monitor

Latin America's Needs Bush's Trip South Will Give Financially Strapped Governments an Opportunity to Assess the US Commitment to Expanded Trade, Debt Reduction, and Greater Investment in the Region

Article excerpt

AT every stop on President Bush's South American itinerary this week, economic issues will dominate the agenda. Political leaders in Brazil, Uruguay, Argentina, Chile, and Venezuela will want to hear the president reconfirm the commitments he undertook this past June when he launched the Enterprise for the Americas Initiative - a wide-ranging proposal to strengthen US economic ties with Latin America and to work toward a free-trade zone in the hemisphere.

But the Latin Americans will also want to know what steps the United States is prepared to take to achieve these goals and what is expected of them. The president and his advisers ought to provide a clear response.

All of the countries the president will visit, except Chile, are locked in a protracted economic depression. Living standards are declining; poverty is spreading; triple-digit and higher inflation persists; and investment remains abysmally low. Latin America's leaders, however, are not looking for foreign aid, nor do they expect any significant revival of bank lending. They know that the only realistic path to economic recovery is through expanded exports, foreign investment, and the return of flight capital.

They also know that unimpeded access to the vast United States market is crucial for attracting foreign investors and building a dynamic export sector. The United States is already South America's principal market. Some 30 percent of South America's trade today is with the US. Increased sales to US buyers accounted for 75 percent of South America's export growth in the 1980s.

Latin Americans do not want to limit their trade to the United States, but they are worried - rightly or wrongly - about the possibility of Europe and Asia forming restrictive trading blocs that might shut out their products. They are also concerned that the US will become more protectionist or form its own trading bloc with Mexico and Canada - in either case blunting their export drives. That is why South America's nations want trade agreements with Washington that will assure their access to US markets.

The benefits would not all go in one direction. Although US exporters send only 13 percent of their products to Latin America, annual sales total $50 billion - somewhat more than our exports to Japan. And economic recovery in Latin America would lead to some $10 billion to $20 billion a year in additional purchases from US exporters.

Moreover, trade currently accounts for only 15 percent of economic activity in Latin America. If the region sustains its economic reform efforts, that figure could increase sharply, with a corresponding expansion of imports from the United States. A vibrant export sector in Latin America, moreover, would provide opportunities for US investors - and expanding trade and investment would facilitate loan repayment to US banks. …

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