Latin America, Asia to expand economic ties

SANTIAGO, Chile (JP): Asian businesspeople and their counterparts in Latin America, a region which is half a world away, are increasingly excited about the prospect of expanding business partnership.

This is clearly reflected in the large delegations from both regions attending the 12th General Meeting of the Pacific Economic Cooperation Council (PECC) that opened here Tuesday.

Even Southeast Asian countries, which are still staggering from the currency crisis, came in a big way. Argentina and Brazil, which are not members of PECC, also sent ministers to the meeting.

Malaysian Prime Minister Mahathir Mohamad is leading a mission to four Latin American countries. His visit coincides with the three-day PEEC conference.

Several ministers from Thailand, Malaysia, Singapore, Peru, Mexico, Argentina, Brazil, Colombia and Chile as the hosts set up panel discussions with businesspeople about the Transpacific partnership.

As the meetings are being held under PECC -- an informal tripartite forum of officials, businesspeople and academics from 22 economies in Asia and the Pacific -- the discussions and discourses are more vigorous and frank.

PECC was set up in 1980 -- nine years before the founding of APEC -- as an independent, regional mechanism to advance economic cooperation and market-driven integration.

PECC has 22 members: Australia, Brunei, Canada, Chile, China, Colombia, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Peru, the Philippines, the South Pacific Forum Island Nations, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.

The conference is considered well-timed in view of the fifth summit meeting of the Asia Pacific Economic Cooperation (APEC) forum in Vancouver, Canada, next month.

President of the Inter-American Development Bank, Enrique V. Iglesia, said Transpacific relations still represent a new, though promising frontier for Latin America.

But rapid globalization of the economy is bringing Asia and Latin America, though half a world apart, together.

The process has been accelerated by trade liberalization and market deregulation in most countries in the two regions. The dynamic forces of competition fueled by liberalization have prompted countries to diversify their markets away from traditional trading partners -- the United States and Europe.

East and Southeast Asian economies have been growing by about 7 percent a year over the past decade and this region includes eight of the 20 largest importing countries in the world.

Likewise, Latin American countries, which until the mid 1980s were mostly closed economies grappling with a massive foreign debt crisis, have also undergone major economic reform over the past 10 years.

According to data issued by the Inter-American Development Bank, Asian-Latin American trade has grown almost fourfold since 1986 to nearly US$50 billion last year, though in proportion to the total trade of each region, the two-way trade is still rather small or a mere 10 percent.

"But the trend is quite promising, as growth has been steadily robust," said President Eduardo Frei Ruiz-Tagle of Chile, so far the most aggressive Latin American country in promoting trade with Asia.

Latin-American trade with Southeast Asia has been expanding at an even faster rate, rising from $520.2 million in 1986 to $5.03 billion in 1996.

Though Brazil remains the leading Latin American exporter to Asia, Chile has succeeded in selling as much as one third of its total exports to Asia.

Chairman of the Gemala Group, Sofjan Wanandi, who led an Indonesian business team to Brazil before attending the PECC meeting, also saw a big untapped potential market in the region.

As Latin American countries are being integrated through subregional and bilateral trading arrangements, the region is heading toward a huge common market of more than 250 million people with a per capita income ranging from $1,800 in Paraguay, $4,850 in Chile and $8,300 in Brazil.

"I think we should be as aggressive as Malaysia in tapping this region's market," Sofjan said in referring to the strong Malaysian government-business partnership in entering the Latin American market. (vin)