Search for a New Partnership in Trade and Investment between Latin America and Asia-Pacific

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Kuwayama, Mikio
Nov 2001
Although interregional cooperation in trade and investment between Latin America and Asia-Pacific has been on the agendas of countries in both regions for some time, initiatives have been few, with meager results. The lack of tangible results is related to the economic asymmetries between the two regions and a purely inter-industrial nature of bi-regional trade. The incipient drive in bi-regional trade up to the Asian crisis was triggered by the economic boom of East Asia on the one hand, and growth recovery, economic reforms and integration, on the other. Now, coupled with the slowdown of the US economy and the standstill of Japanese economy, the sustained impulse of these factors is uncertain. The present economic relations between the two regions do not reflect the potential for interregional trade and investment that exists in an increasingly globalized world. The current low level of economic interaction, especially in the aftermath of the economic crises experienced in each region in recent years, calls for joint actions in the economic sphere. Given the embryonic stage and limited country coverage of ongoing consultations on bilateral free trade agreements, the recently created Forum for East-Asia Latin America Cooperation (FEALAC) should address the issues of market access and bi-regional economic integration, and promote concrete integration initiatives.