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On June 12-14, the Association of American Chambers of Commerce in Latin America (AACCLA) held its Mid-Year Meeting and annual Business Future of the Americas conference in Cartagena, Colombia. AmCham Chile was represented by AmCham General Manager, Jaime Bazán, along with Nora Balzarotti of the Chamber’s Research Department, and Kathleen Barclay, member of the AmCham Advisory Council.

The theme of the meeting was hemispheric integration and opened with an upbeat message from Colombia’s President Juan Manuel Santos, who expressed confidence that the United States would approve the US-Colombia Free Trade Agreement by the end of 2011 - a view which was strongly shared by Francisco Sánchez, Undersecretary for International Trade at the US Department of Commerce. Undersecretary Sánchez was also optimistic that the US-Panama FTA would be approved this year, possibly as early as the third quarter.

For US businesses this presents important growth opportunities. Already, US exports to Latin America and the Caribbean are three times exports to China and represent approximately 2 million jobs in the United States. The Colombia and Panama trade agreements, which will deepen the US relationship with Latin America, also highlight the main theme of the conference - integration makes the entire hemisphere more prosperous and competitive compared to other regions in the world.

Recent progress in regional integration was also highlighted by several speakers. Raúl Rivera, president of Foro Innovación, spoke about how the focus on common goals is driving regional integration with impetus from the private sector. In addition, Michael Reid, the Americas Editor for The Economist, gave an excellent overview of the region’s economic progress, stressing the importance of Brazil’s impressive success over the last few years as well as the significant progress made by Colombia, Peru and Chile.

Reid applauded the higher growth rates across the region, its success in navigating the international financial crisis, and the important social progress that has lifted over 40 million people out of poverty over the last decade. At the same time, he said that the region has benefited from good luck including favorable world economic conditions that have resulted in attractive commodity prices as well as high levels of global liquidity.

He warned that the greatest risk is complacency and that countries of the region should focus on the pending challenges of increasing productivity – particularly labor productivity – and avoiding economic overheating generated by high levels of liquidity. Increasing productivity in the services sector that employs a majority of workers in the region is particularly important, requiring an emphasis on education, increased competitiveness, research and development, as well as regional security. 

But Reid closed on an optimistic tone, noting that by 2025 the region has the opportunity to double per capita income thereby reaching near developed country status with a strong and sustainable middle class. To get there, however, the region needs ambition and innovation along with increased integration.

A series of panels addressed specific challenges to regional integration in the areas of infrastructure, trade, energy, and transportation. All agreed that the private sector should be the principal driver of the integration process by taking advantage of attractive opportunities in the region. On the other hand, governments need to provide clear rules and work on improving relations with neighboring countries.

Conference participants concluded that the current challenges and opportunities in the region require a renewed commitment to public-private partnership. Alvaro Fischer of Fundación Chile explained the success of his organization in facilitating this type of partnership while Ana Novik, of the Foreign Ministry’s international trade department, Direcon, pointed to the opportunities that can come from more effective implementation of existing free trade agreements and the negotiation of similar agreements between countries of the region.

The meeting concluded on a positive note with a renewed commitment to public-private partnership and a recognition of the opportunities that increased integration provides the private sector, but there remains work to do and deep concern for countries that have been unable to develop sufficient institutional stability to take advantage of this auspicious moment – a decade for Latin America with increased prosperity for all.

Kathleen C. Barclay is past chair of AACCLA, principal of the consulting firm Asesorias KCB Ltda., and chair of bUSiness CHILE’s Editorial Board.