Latin America Could Turn to Russia, China in Wake of Trade Split With US

The governments of some Latin American countries have signaled that they are ready to “break their dependence” on the United States; Russia and China could play a key role in the region, Venezuelan political analyst Ernesto Wong told Sputnik Mundo.

Chinese President Xi Jinping
In an interview with Sputnik Mundo, Venezuelan political analyst Ernesto Wong said that in Latin America, there are several factors which have given rise to the hope that this year will see a number of key political changes in the region.

One of these factors is the willingness of some regional governments to “break their dependence” on the United States and allow Russia and China to play a key role in the region, according to Wong.

“Latin America is at odds with Washington but it is developing friendly ties with China and Russia, which is why in 2017 the region is expected to overcome the imperialist dependence on the US and to establish more favorable conditions for exchange… trade and investment with Russia and China,” Wong said.

As for China, Wong referred to the January 20 meeting between Beijing and the Community of Latin American and Caribbean States (CELAC), which he said opened up new prospects for the exchange of public and private capital.

“It’s important that none of the countries of the Pacific Alliance decided to break off relations with China, which means that they are  interested in continuing trade ties with Beijing,” he said. The Pacific Alliance is a Latin American trade bloc which currently includes Chile, Colombia, Mexico and Peru.

According to Wong, the most important affecting the Pacific Alliance is the existence of Trump’s so-called model of “neo-isolation.” The alliance had been seen as a close partner of the United States and Canada; its members (less Colombia) were among the countries set to co-establish the Trans-Pacific Partnership (TPP) this month.

This initiative was nullified when Trump abandoned TPP on January 23. Trump also raised the question of revising the terms of the North American Free Trade Agreement (NAFTA).

“As a consumer, the US is in a critical situation after it greatly reduced its imports, which were supported by the free trade agreement. Trump wants to get out of it because he intends to develop national industry,” Wong said, adding that this process will also be affected by the critical situation in Western Europe.

Aside from to China and Russia, Latin American countries may also invest in Africa, according to Wong.

“This is potentially a good opportunity because openness toward Africa would help promote Latin American products there and the African continent would benefit from receiving equal conditions for exchange,” he said.

He added that such transparency would also be attractive for those countries in the region which are not progressive because they seek to improve relations with other regions, which could give them the opportunity to obtain a larger income.Wong emphasized that it is Latin America distancing itself from the United States and rapprochement between Eurasia and Latin America that will pave the way for regional countries becoming more independent and sovereign.

Article originally published here
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Cuba Sees Explosion in Internet Access

cubainternetTwo days before Christmas, Luis Gonzalez received a little Chinese modem from Cuba’s state-owned telecommunications company.

The 55-year-old theater producer connected the device to his phone and his laptop computer, which instantly lit up with a service unimaginable in the Cuba of just a few years ago — relatively fast home internet.

“It’s really easy to sit and find whatever you need,” Gonzalez said as he sat in his living room updating his Facebook account, listening to Uruguayan radio online and checking an arriving tourist’s landing time for a neighbor who rents rooms in their building in historic Old Havana. “Most Cubans aren’t used to this convenience.”

Home internet came to Cuba last month in a limited pilot program that’s part of the most dramatic change in daily life here since the declaration of detente with the United States on Dec. 17, 2014.

While Cuba remains one of the world’s least internet-connected societies, ordinary citizens’ access to the internet has exploded over the last two years. Since the summer of 2015, the Cuban government has opened 240 public Wi-Fi spots in parks and on street corners across the country. Cubans were previously restricted to decrepit state internet clubs and hotels that charged $6-$8 for an hour of slow internet.

In a country with an average monthly salary of around $25, the price of an hour online has dropped to $1.50, still steep but now well within the range of many Cubans with private income or financial help from relatives abroad.

The government estimates that 100,000 Cubans connect to the internet daily. A new feature of urban life in Cuba is the sight of people sitting at all hours on street corners or park benches, their faces illuminated by the screen of smartphones connected by applications such as Facebook Messenger to relatives in Miami, Ecuador or other outposts of the Cuban diaspora. Connections are made mostly through access cards sold by the state monopoly and often resold on street corners for higher prices.

The spread of connectivity has remotely reunited families separated for years, even decades. It’s fueled the spread of Airbnb and other booking services that have funneled millions in business to private bed-and-breakfasts owners. And it’s exposed Cubans to a faster flow of news and cultural developments from the outside world — supplementing the widespread availability of media spread on memory drivers.

Cuban ingenuity has spread internet far beyond those public places: thousands of people grab the public signals through commercially available repeaters, imported illegally into Cuba and often sold for about $100 — double the original price. Mounted on rooftops, the repeaters grab the public signals and create a form of home internet increasingly available in private rentals for tourists and cafes and restaurants for Cubans and visitors alike.

On the official front, Google and Cuba’s state-run telecoms monopoly Etecsa struck a deal last month to store Google content like YouTube video on servers inside Cuba, giving people on the island faster, smoother access.

While the explosion of internet in Cuba has taken place alongside the process of normalization started by Obama in 2014, it’s unclear how much better relations have speeded up Cuba’s move online.

What is clear is that Cuba began to dramatically increase access about six months later when the government began opening Wi-Fi spots around the country. For many Cubans, the start of home internet in December is potentially even more significant, breaking a longstanding barrier against private internet access in a country whose communist government remains deeply wary about information technology undermining its near-total control of media, political life and most of the economy.

Abridged, article originally published here

Mexico’s International Trade Agenda for 2017

mexico1International events such as “Brexit,” the United States’ potential withdrawal from the Trans Pacific Partnership Agreement (TPP) or the possibility of renegotiating the North American Free Trade Agreement (NAFTA) are all extremely relevant for Mexico’s economy – which has the fourth-largest gross domestic product (GDP) in the Americas and the 15th-largest GDP in the world. The Mexican economy rests heavily on its exports, making 2017 a particularly challenging year for Mexico’s international trade agenda during this last year of the current administration. In 2018, Mexico will hold federal elections to designate a new president and Congress.

The Mexican international trade agenda will be most likely occupied by existing negotiations – such as the modernization of the European Union (EU)-Mexico Global Agreement – as well as with current trade issues such as China’s steel overcapacity and the sugar export restrictions imposed on Mexican exports to the U.S., but there are certain likely events that deserve a close examination:

  • likely formalization of the United Kingdom’s exit from the EU – widely known as “Brexit” – a formal invocation of Article 50 of the Lisbon Treaty that may have an impact in the current free trade agreement (FTA) negotiations with the EU and also may require bilateral negotiations with the UK
  • renegotiation of NAFTA or a possible U.S. withdrawal
  • formal U.S. withdrawal from the TPP and/or possible revival of the initiative in a different format – with or without the U.S.
  • surge of trade protectionist measures, not only through the adoption of additional unilateral measures allowed under international trade agreements, either by Mexico or against Mexican exports, such as antidumping and countervailing duties, but also through more aggressive unilateral actions (customs duties increases, safeguards investigations, tax or export restrictions, etc.), all of which may result in additional dispute settlement proceedings under the World Trade Organization (WTO) or bilateral FTAs – such as NAFTA Chapter XIX­– and investment treaties
  • increase activism by Mexico to diversify its export destinations and foreign direct investment sources, particularly with China, Korea and Japan, to expand and increase trade flows. (Mexico already has an FTA with Japan, has explored the possibility of an FTA with Korea and has not formally expressed yet any interest to negotiate with China)
  • increased pressure by China to obtain recognition from Mexico as a market economy, which could have a serious impact on new antidumping investigations and on the 27 existing antidumping duty orders against Chinese products (out of the current 52 products that are subject to antidumping orders in Mexico); China recently filed for consultations with the EU and the U.S. under the WTO to address this matter

On its own, 2017 will be a busy, uncertain year for Mexico’s trade agenda. The uncertainty over Mexico’s relationship with the U.S. will add additional stress to the system. While the debate will continue to rage in the U.S. as to whether NAFTA was a good trade deal for the U.S., NAFTA brought benefits to Mexico that created a more stable neighbor for the U.S.

Article originally published here

Meet Canada’s new International Trade Minister

francois-phillippe-champagneFrançois-Phillippe Champagne, a lawyer who’s worked for a string of major multinationals, Champagne knows the world of global trade—but says Canadians must reap the benefits at home.

Arguably the biggest promotion in today’s federal cabinet shuffle goes to François-Philippe Champagne, who vaults from parliamentary secretary to Finance Minister Bill Morneau, a supporting role just outside cabinet, to succeeding Chrystia Freeland in the high-profile post of minister of international trade.

I say “arguably” because an obvious case could be made that Freeland is, in fact, the key moving part in the shuffle. In taking over from Stéphane Dion as foreign minister, she notches up noticeably in prestige and profile. But Champagne, previously known only to attentive Ottawa insiders, in a single stride becomes an unignorable front-bench player for anyone watching federal politics.

This doesn’t come entirely as a surprise. Before he jumped into politics, Champagne held down serious jobs in international business. A lawyer, he was senior counsel and vice-president at ABB Group, a Swiss engineering giant, and then had a string of titles, including strategic development director, at AMEC, a big London-based project-management company focused on the energy sector. But he never hid his political ambitions, and returned to Shawinigan, Que., where he grew up (yes, in Jean Chrétien’s hometown) to win the Saint-Maurice-Champlain riding in the 2015 election.

Last month, before rumours of an imminent cabinet shuffle were much in the wind, I interviewed him at his office just off Parliament Hill. An upbeat, diminutive, and youthful 46, he riffed confidently on the challenges facing the Canadian economy.

And now that he’s taking over the trade portfolio, Champagne’s perspective on Canada’s position in the world economy is even more relevant. He sees plenty of room for improvement. For instance, he cited Australia and Britain as countries that do a better job selling themselves to international investors. Canada’s profile abroad is too often, he suggested, a fragmented one.

“I have been in a room in London where provinces were pitching against each other,” he said, recalling his days in the private sector. “I didn’t think, as a Canadian ex-pat, this really was the best way.” Champagne touted Morneau’s plan to create something called the Invest in Canada Hub, announced in last fall’s economic statement, as a step toward a “one-stop shopping” solution to marketing the national brand.

He argued the time is right for Canada to present itself more assertively, checking off the country’s selling points in an unsettled world. “Stability, predictability? Yes, you can see ahead. Rule of law? You know, if you build a plant here, 50 years from now it’s still going to be yours; you’re not going to have a change of regime. And you talk natural resources, low cost of electricity, fairly low cost of doing business, favourable tax rates.”

After Champagne waxed on for a while about Canada’s advantages as an open, trading economy, and a beacon for foreign investment, I asked if that vision remains politically viable in the era of Donald Trump and Brexit. Isn’t it likely that many Canadians, deep down, share the anxieties of English and American voters who responded last year to more protectionist, defensive rhetoric?

Champagne said that’s not what he hears in his own rural and small-town Quebec riding. He claims voters there, from truck drivers to lumber industry workers, tend to grasp that trade is essential to their livelihoods. But it’s crucial, he argued, for governments to make sure most people can see the benefits of liberal economic policy flowing their way.

So he cited measures from last spring’s budget, including the new Canada Child Benefit and the boost to the Guaranteed Income Supplement for lowest-income seniors. “People get it,” he said. “They see that, from the growth that we’re aspiring to achieve for the country, there is a piece of that for them.”

And he contrasted that with the discontent he noticed, back when he was based for five years in London, over how globalized trade and investment seemed to benefit only “a very discrete group” of the highly educated Brits. He added cautiously: “It’s not for me to talk about other countries, but I’m just talking from personal experience. You could see at some stage there was this imbalance.”

For Canada to avoid a Brexit-like backlash, the economy must keep generating wealth and spreading it around. Champagne agrees with economists who say that will be hard to sustain, since our workforce just isn’t expanding like it used to. “A lot of the growth in our country came after World War Two, with the influx of population from Europe, mainly. Then in the 1970s, women came to the workforce,” he said. “Now what we’re facing is that population in Canada is aging more than the world population.”

He said the federal policy response to the demographic crunch of more retired and few working-age Canadians can’t be merely incremental. “In an era of slow growth we need to have big, bold ideas,” he said. “We need to be ambitious.”

Up to now, Champagne has worked in Morneau’s shadow, helping develop policy ideas like the finance minister’s infrastructure bank and investment hub. Freeland showed, when she was finalizing Canada’s trade deal with the European Union, how a trade minister can make a mark—and secure a cabinet promotion. Now, Trudeau is giving Champagne his chance, and Ottawa has a key new player to watch.

Article originally published here

Non-Tariff Barriers Can Connect Trade to Sustainable Development

flagsIn the landscape of the 2030 Agenda for Sustainable Development, trade is a means of implementation towards the Sustainable Development Goals (SDGs). The Addis Ababa Action Agenda (AAAA) on financing for development further specifies the role of trade as “an engine for inclusive growth and poverty reduction, and contributes to the promotion of sustainable development.” That is, trade should function as a means for achieving “sustained, inclusive and sustainable” economic growth. More importantly, trade-led growth should enhance, rather than undermine, the potential for social development and environmental sustainability.

In the past several decades, however, many developing countries witnessed that trade growth contributed to aggregate economic growth, and also increased the within-country income inequality. This would suggest that a country’s trade policy reflects the interests of the country’s economic giants rather than small and marginalized players, and that these interests can override the importance of conservation of natural resources and ecosystems.

There is a need to rethink policymaking in order to link trade growth to sustainable development, including its social and the environmental dimensions. The recent UNCTAD report, ‘Trading into Sustainable Development: Trade, Market Access and Sustainable Development Goals,’ looks into this issue, focusing on the interactions between market access conditions – such as customs duties (tariffs) and non-tariff measures (NTMs) – and achieving the SDGs.

What are non-tariff measures?

Historically, market access conditions in international markets were determined by the level of tariffs on imported products. However, tariff barriers have fallen significantly across countries: the trade-weighted average tariff rate in the world fell from just over 5% in 1995 to 2.5% in 2014/2015. Against the trends of falling tariffs, the influence of NTMs upon trade costs has increased. In 2014, around 70% of agricultural products traded in the world market faced sanitary and phytosanitary (SPS) measures, and over 60% of manufactured products faced “technical barriers to trade (TBT),” such as technical regulations and product standards.

Such regulatory measures are designed to meet important social and/or environmental objectives, such as by setting maximum levels for toxic residues in food, ensuring the sustainable sourcing of natural resources, or limiting trade in polluting substances. But they can directly affect trade flows and economic development when they are applied to imported products. In many cases, NTMs can be more trade-restricting that tariffs. UNCTAD estimates that existence of SPS measures to agricultural exports may increase production cost by 22%, compared to the average tariff facing the same exports at around 5%. NTMs can be particularly restrictive for low-income countries constrained by limited capacity to comply with NTMs thus significantly increasing their trading costs.

Because the vast majority of NTMs directly target key determinants of sustainable development, such as food security, health and environmental protection, countries are likely to implement more such measures for the achievement of the SDGs. That is, the number of NTMs in world trade may be increasing fast.

How to make non-tariff measures work for sustainable development

Will an increase in NTMs squeeze low-income countries’ capacity to use trade as a means of implementation of the SDGs? Not necessarily. In fact, the presence of NTMs can be the source of regional or international collaboration that can help countries to achieve a win-win situation: (i) collectively improve policy environment towards achieving the SDGs; and (ii) reduce trade distortionary impact of NTMs. The key is to eliminate trade-distortionary effect of NTMs.

Trade distortions arise from NTMs when they increase production costs for exporting countries to meet the regulatory requirements, including the costs associated with conformity assessment and certification. These costs will be higher when exporters have to meet different requirements for different markets including domestic market. That is, NTMs can be trade-distorting when the “regulatory distance” between an exporting country and its market countries is large. Therefore, reducing the regulatory distance among trade partners is the way to achieve the win-win situation.

Regulatory distance between countries is measured by the similarity of regulatory patterns of NTM types applied to a specific product classified at the HS 6-digit level. For example, if two countries each apply ten different product requirements to lemons, the regulatory distance is huge and it increases trade costs significantly. UNCTAD has assessed the potential impact of reducing costs related to NTMs in the 15 member countries of the Southern African Development Community. The gains amount to US$6 billion through a 25% reduction of NTM-related trade costs. No member country is worse off from the reforms. The largest gains stem from reducing the restrictiveness of SPS measures and TBT for partners from the whole world through alignment with international standards. In the case where barriers to trade from NTMs are reduced only to SADC exporters, the gains are much lower, with a total of about US$1.3 billion.

Moreover, when regulatory convergence is achieved among countries, it implies that countries will be implementing policy measures in a manner coherent with their trading partners. Such collaboration can jointly improve the effectiveness of policy measures, particularly in the areas where policy impacts can be cross-border, such as environmental regulations.

NTMs provide an important “policy interface” between the SDGs and trade, particularly in the framework of regional economic cooperation among developing countries.

Article originally published here

Will Latin America Regain Prosperity in 2017?

7301Developments in the United States and China will impact Mexico and South America differently, experts say.

Latin America’s major nations are hoping that 2017 will be the year that they finally recover from the lingering impact of weak commodity prices. For the fourth consecutive year, Latin America’s exports contracted in 2016, according to a report by the Inter-American Development Bank (IDB), using detailed data for 24 countries in the region. In 2016 Latin American and Caribbean exports fell by approximately $50 billion, or 6 percent. The value of exports was expected to reach $850 billion for 2016, a lower rate of contraction than the 15 percent drop suffered by the region in 2015. This latest annual decline was due primarily to declining sales to the United States (down 5 percent) and to the region itself (an 11 percent contraction), and, to a lesser extent, declining exports to China (down 5 percent), the rest of Asia (a 4 percent drop), and to the European Union (minus 4 percent).

Leaders in Latin America are also pondering what impact incoming U.S. President Donald Trump’s policies will have on the region’s economic growth and global trade in 2017. During his campaign, Trump advocated imposing protectionist barriers on U.S. imports of Latin American goods, which could potentially thwart the region’s attempts to boost exports to earlier, healthier levels. Another uncertainty facing Latin America is how Trump’s economic strategy will impact the value of the U.S. dollar.

The U.S. dollar will appreciate for two reasons, predicts Wharton management professor Mauro Guillen, who is also director of The Lauder Institute. “One reason is that interest rates are going to go up. A second reason is that the U.S. economy is probably going to do better than others,” he notes. The rise of the dollar will be “bad for countries that are commodity exporters, because commodity prices will tend to go down — and short-term capital flows are likely to hurt countries like Brazil or Peru or Chile,” Guillen says. However, “contrary to the conventional wisdom, Mexico will do well because of the stronger dollar, while South America is going to be in a lot of trouble for the same reason.” Unlike the major nations of South America, Mexico is not a commodities exporter, but a major exporter of manufactured goods such as automobiles and electronics. “Mexico competes against China, but South America supplies China.”

But while “an acceleration of demand, particularly in the United States and in China, could sustain exports” from Latin America to the U.S. and China, “the resurgence of trade protectionism” in the United States “could bias the forecast,” according to Paolo Giordano, coordinator of the IDB report, and the principal economist of its integration and trade sector.

Another major issue is the ultimate impact of any changes in U.S. policy toward China, which is now the most important trading partner for several countries in Latin America. “That is a huge issue for some countries in South America,” notes Guillen. If China starts growing a bit faster, despite changes in U.S. trade policy, the results will be positive for South American commodity exporters, such as Argentina, Brazil, Chile and Colombia. “But if it does not, then South America is going to have continuing problems…. If China doesn’t grow as much, as has been the case for the last three or four years, those countries will suffer because China has become their most important customer.”

According to the IDB report, “The prospects for a reversal of the downward trend in 2017 are associated with a scenario in which commodity prices continue to improve, and intraregional trade recovers. Those countries whose real exchange rates have depreciated could also harness greater price competitiveness to stimulate [manufactured goods] sales and diversify their export baskets.”

A NEW PATH FOR BRAZIL?

Brazil, the largest economy in the region, has sunk into the worst recession in its modern history amid low prices for key exports, high inflation, relentless political turmoil and depressed confidence levels. In annual terms, industrial production fell 7.3 percent in October, a larger drop than the 4.7 percent decrease recorded in September, and a five-month low. According to Barcelona-based LatinFocus Economics, Brazil’s economy should exit recession in 2017 after falling 3.4 percent in 2016. “However, the pace of recovery is likely to be meager amid austerity measures and modest external conditions.” The consensus of economists polled by LatinFocus projected Brazil’s GDP growth at 0.8 percent in 2017.

Widespread declines were recorded nearly across the board in fall 2016 in 22 of the 26 categories surveyed by the Brazilian Institute of Geography and Statistics (IBGE). The categories that declined the most were the production of mining and quarrying, coke, oil products and biofuels as well as food products. Annual average growth in industrial production improved from minus 8.7 percent in September, but only to minus 8.4 percent in October.

Felipe Monteiro, a professor of strategy at INSEAD and a senior fellow at Wharton’s Mack Institute for Innovation Management, notes that Brazilian analysts were aware that 2016 would be a year of “a lot of uncertainties,” because of the “big issue of impeachment” of President Dilma Rousseff, which ultimately occurred in August. “We were hoping that we would see the light at the end of the tunnel, and we got some sense of resolution — that things would move forward after the impeachment [of Rousseff],” Monteiro says.

But a second period of crisis followed later in 2016, culminating in a scandal involving construction giant Odebrecht, S.A., which now “puts Brazil again into another tunnel with a lot of uncertainty about how long it will take to resolve, and how many people will be implicated,” Monteiro adds. As of mid-December, more than 70 of Odebrecht’s executives, including family patriarch and Chairman Emilio Odebrecht, his jailed son and former CEO Marcelo Odebrecht, had agreed to make plea statements that have been received by the Supreme Court to validate them as evidence.

The good news for Brazil in 2017, says Monteiro, comes from two considerations: First, Brazil’s current economic team is more pro-business than Rousseff’s populist aides, and “it is doing the difficult things that have to be done to put the economy back on track.” Brazil’s economic austerity plan was approved in December, outlining measures to freeze expenses for the next 10 years. “It is painful but necessary,” Monteiro notes. “Despite all the weaknesses of the current government, they managed to approve it. This plan gives more hope that the economy will go back on track, [although] we are far from a resolution of the political fight.” Moreover, as it moves forward after Rousseff’s impeachment, Brazil has remained on a democratic path, “with no rupture — and no censorship. So, for a young democracy like Brazil, as painful as it is, this should give us some encouragement.”

Although the future of U.S.-Mexico relations came into question following Trump’s surprising election victory, his win did not create the same level of uncertainty in Brazil, given the different nature of its ties to the U.S. Not only does Brazil not export a high level of manufactured goods to the U.S., the U.S. enjoys a trade surplus with Brazil, unlike the case with U.S.-Mexico trade. In 2015, the U.S. surplus with Brazil was $4.3 billion, down 64.2 percent ($7.6 billion) compared with 2014. Total U.S. exports to Brazil in 2015 amounted to $32 billion, down 25 percent ($11 billion) from 2014, but up 106 percent from 2005. The top U.S. imports from Brazil in 2015 were mineral fuels, aircraft, iron and steel, and machinery. With no equivalent of NAFTA to renegotiate, U.S.-Brazilian trade discussions in the Trump era will likely boil down to building “a very pragmatic, bilateral commercial relationship,” based on a “more deal-by-deal approach” to problem-solving in specific sectors, Monteiro says.

Despite such pragmatism, in the age of Trump there is a risk that “if the relationship between Latin America and the U.S. becomes less important because the U.S. shifts more of its internal political relationships toward Russia, that will open space for China to play a more important role in Latin America,” Monteiro notes. China is already making a number of efforts in that regard, he adds. Another risk, according to Guillen, is that if the Trump administration increases tariffs on imported goods from Latin America, “that is going to increase consumer prices in the U.S.” and “inflation is also going to accelerate.” Guillen cautions that U.S. policy makers need to consider not just the immediate impact of their measures, but their “second order effect,” which could turn out to be very different from what they expect.

THE CASE OF COLOMBIA AND ARGENTINA

Elsewhere, two other major countries face somewhat different challenges in 2017.

In 2016, the economy of Colombia grew by just 1.2 percent in the third quarter, according to production-based GDP data, the slowest quarterly growth since the global financial crisis hit in 2009. The country’s results were affected by a prolonged truckers’ strike and subdued global trade. More positively, the country’s Senate approved a revised peace agreement with the FARC rebels in November, a month after the original proposal was rejected in a controversial plebiscite.

The new deal establishes a stronger government presence in rural areas dominated by the FARC, and it obliges FARC rebels to divulge their assets while providing judges with more authority if insurgents are found guilty of drug trafficking. Nevertheless, public opposition to the pact remains strong, led by former president Alvaro Uribe. Moreover, the weakness of the global economy “is weighing heavily on the country’s economic outlook,” notes a LatinFocus Consensus Forecast. For all that, the peace agreement could boost growth in tourism, oil exploration and foreign direct investment in Colombia’s conflict-ridden areas, adds that report. The consensus of analysts was that Colombia’s economy will grow by 2.5 percent, up from 2.0 percent in 2016.

In Argentina, which is transitioning from the populism of two Kirchner presidencies (Nestor Kirchner from 2003-2007 and Cristina Fernandez de Kirchner from 2007-2015) to the business-oriented administration of current President Mauricio Macri, the economy is expected to return to growth in 2017, reflecting the impact of Macri’s market-focused economic reforms, and the improved business sentiment, according to a LatinFocus Consensus Forecast. After dropping by 1.1 percent in 2016, industrial production in Argentina is expected to expand by 2.5 percent in 2017.

For the populism-prone nations of South America, there is an irony in the timing of the victory of Trump in the United States, says Monteiro. “2016 was a very important year for countries like Argentina and Brazil to move away from very populist governments. Anti-business nationalist regimes – such as Fernandez de Kirchner in Argentina and Rousseff in Brazil — were replaced by governments that are much more pro-business — with Macri in Argentina and Michel Temer in Brazil,” he says. “Ironically, now when those two countries, which have a very important influence on the rest of the region, are moving towards more good relationships in global trade, the United States, which has always been pushing for that kind of [free-trade] agenda, is [moving] towards more isolationism. It is almost a paradox.

Article originally published here