International trade expert Leonardo Gonzalez Dellan has argued that the growth of multilatinas, Latin American companies which operate on a cross-border, regional basis can help Latin America remain open for trade and connected to the global economy, rather than shutting itself off. “Latin American governments should recognise the economic potential that is growing in the region currently. We need to develop closer regional economic links with each other, we have to look outwards be open for business. We need to resist the temptation of knee-jerk tariffs and look to global markets to ensure Latin America fully benefits from what is growing here.”
He has highlighted that the sectors in which the Latin American economy that are growing fastest are ones which stand to potentially benefit from the raising of American tariffs. Consumer goods, technology development and industrial goods are the most dynamic sectors multilatinas operate in, and as such Dellan argues that the time has never been better for Latin America to remain committed to free trade. He argues that “we already have companies with business, cultural, even linguistic links to each other that are growing rapidly and want to do business. All we need is a firm commitment to free trade politically, to have a mindset of broad horizons rather than shutting ourselves off. But if we do not manage to keep free trade then we need to buy more goods and services from each other and from home producers. Ideally, we will remain open for Trade now and in the future, but we have to be realistic”. Dellán argues that if the trade wars are set to dominate the scene for the foreseeable future, then the answer lies in building the local market.
Latin America is made up of 20 states, stretching from northern border of Mexico to the southern tip of South America into the Caribbean. It covers over 7 million square miles, 13% of the worlds surface and in 2016 had a population estimated at nearly 650 million and a combined GDP of nearly 6 trillion USD. Coupled with the continent’s formidable natural resources, including 54% of copper production, and 66% of lithium reserves, Latin America has the potential to grow rapidly globally, if sufficient regional cross-border economic ties are built. This is where multilatinas are vital, in developing an integrated, booming regional economy with the tools to take its place on the world stage. Dellán believes this is how Latin America can remain competitive and trade freely, by building a regional economy where benefits are spread across multiple countries, increasing the motivation for staying open. He says that even if Latin America gets caught up in a trade war, it can survive by ensuring its regional economy is resolute, to take advantage of its growing companies and seek to evolve rather than shutting itself away.
Leonardo Gonzalez Dellan is an international trade expert and entrepreneur.