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With Latin America bucking the anti-globalisation trend, The Economist Intelligence Unit is—for the first time in decades—more optimistic about the deepening of free trade and regional integration in Latin America.
The regional integration agenda will seek to deepen ties in three main areas: among members of the Pacific Alliance free-trade area (an integration project that includes Chile, Peru, Colombia and Mexico); between the Pacific Alliance and Mercosur (the Southern Cone customs union, comprising Argentina, Brazil, Paraguay and Uruguay); and between Mexico and the rest of Latin America.
Latin America’s leaders will have two key priorities in trade relations with the rest of the world: securing an EU-Mercosur free-trade deal, and resurrecting the Trans Pacific Partnership (TPP) without the participation of the US.
After initial scepticism, we are increasingly optimistic about the chances of these deals being made.
Greater integration and further trade liberalisation would bring real benefits for businesses investing in Latin America, and for the region’s growth outlook.
The main obstacle to the trade and integration agenda is political. Presidential elections in 2018 in major economies in Latin America, including Brazil, Mexico and Colombia, have the potential to spring surprises and shift the pro-free-trade stance that currently dominates Latin America.
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