Latin America needs to increase its regional foreign trade

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(Credit: CNN / Spark)

(CNN Spanish) - While the non-reason for the destructive trade wars continues - which of course also suffers Latin America - we have found in GloboEconomia a good time to analyze the situation of international transactions in our region. We discuss it with Gabriel Tolchinsky, executive president of the Latin American Bank for Foreign Trade (Bladex), which, based in Panama, has recently turned 40, since 23 Latin American countries decided to found and fund it.

With Tolchinsky we have analyzed how these winds against the trade wars are slowing foreign trade in the region, but also some of the problems of our own, as it is mainly the fact that only 16% of Latin American international transactions are made between countries of the region. The strength of the great economies of the world are often made by increasing the trade of the countries that belong to each area. But in Latin America that is not the case: that 16% was higher a few years ago and is now decreasing.

The reasons start - according to Gabriel Tolchinsky - mainly from the fact that Latin America mainly exports raw materials, and that is obviously a limitation, because there is a limit on the need of some countries and others in terms of such products. But it seems quite obvious that there is room for other types of exports of goods. There are abundant complementarities in the potential foreign trade of the region, which, however, are often limited by another important point: transport infrastructure between some countries and others leaves much to be desired.

The investment in improving transport infrastructure in the region would bring many improvements, but definitely also the increase in regional foreign trade. Very illustrative for me this conversation with Tolchinsky, which I hope you find interesting.

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