Latin nations bemoan China trade
Atlanta Journal Constitution, USA
Latin nations bemoan China trade
By Dan Chapman
12 June 2007
It is billed as a "competitiveness" forum bringing business and government officials from across the Western Hemisphere to Atlanta with the goal of boosting trade, investment and livelihoods for the region’s 800 million citizens.
But no global business conference escapes the shadow cast by the world’s 800-pound trade gorilla - China. Monday’s gathering at the downtown Marriott Marquis was no exception.
Many Latin American countries, struggling already to escape poverty by shipping inexpensive products to the United States, continue to lose markets to even cheaper Chinese exports. The Asian behemoth’s 2001 entry into the World Trade Organization - which governs the world’s trading system - furthered China’s assault on the manufacturing world.
"The participation of China in the WTO hit us particularly bad," Ana Vilma de Escobar, vice president of El Salvador, said in an interview. "We lost about 20 companies - agribusiness, assembly operations, textiles - and about 7,000 jobs the last three years."
The small, poor Central American nation fought back by embracing U.S.-style capitalism and signing a free-trade pact with its neighbors and Washington. Escobar said those 7,000 jobs have been replaced with a more diverse, service-oriented economy including call-center jobs.
El Salvador’s struggles, and apparent triumphs, cut to the heart of the Americas Competitiveness Forum, which continues today with an estimated 900 participants, including three U.S. Cabinet secretaries, two Latin American vice presidents and a slew of government and business leaders. The inaugural conference, organized by the U.S. Department of Commerce, seeks to promote "prosperity and economic opportunity" across the region long dominated by the United States, but increasingly supplanted by Communist China.
"Working together to promote open markets, create jobs and encourage investment is strongly in the long-term best interest of all our citizens," said U.S. Commerce Secretary Carlos Gutierrez. "As a region, we must ensure that we position our industries to be competitive in this increasingly global business environment."
Gutierrez mentioned China four times in his opening remarks. With just cause: China announced Monday that its trade surplus with the United States notched its third-highest monthly total ever - up 73 percent, to $22.5 billion, from the previous May.
Sam Williams, president of the Metro Atlanta Chamber of Commerce, which lobbied hard for the forum to be held in Atlanta, said "the world is obsessed with China right now."
"China did the same thing to manufacturing in Latin America as it did to this country. Mass-produced manufactured goods migrated out of this country 10 years ago and are migrating from the Western Hemisphere as we speak," he said. "It’s about time the Western Hemisphere got its trade partnerships together as a group to be able to compete globally."
Unable to knit a hemisphere-wide trade pact of 34 countries - the North American Free Trade Agreement on steroids - the Bush administration in recent years has turned instead to signing free-trade agreements with individual countries, including Chile. The White House succeeded in cobbling together El Salvador, Nicaragua, Guatemala, Honduras, Costa Rica and the Dominican Republic with the United States into the Central American Free Trade Agreement, or CAFTA.
"We have to provide opportunities to the 30 percent of our population that [lives] under the poverty line," Escobar said. "The only way to do that is to generate wealth by increased investment and competitiveness. (CAFTA) definitely opened up opportunities."
Two-way trade between the United States and CAFTA partners totaled $38.2 billion last year.
El Salvador, whose 12-year civil war ended in 1992, attributes much of its 68 percent increase in non-textile exports last year to CAFTA. About half of the exports, including food, beverages and plastics products, ended up in the United States.
In exchange for easier access to U.S. markets, El Salvador is privatizing its telecom, energy and banking industries. Critics - who’ve helped stymie pending free-trade deals with Colombia, Panama and Peru over social and environmental issues - say U.S. corporations gain too much control over Latin America’s big-dollar industries.
And China continues to supplant Latin America’s traditional low-wage industries, like textiles.
"It’s kind of scary what China is doing to Latin American exports to the United States and what it’s doing to domestic markets in Latin America as Chinese products flow in," said David Bruce, a professor at the J. Mack Robinson College of Business at Georgia State University. "It’s a matter of competing on price and volume, and Latin America cannot do that."
This week’s forum is intended to remedy the region’s chronic under-performance and, in the process, alleviate poverty, which tops 40 percent across Central and South America. Topics on Monday included: fostering entrepreneurs; logistics and infrastructure improvements; traditional and alternative energy prospects; and education’s role in bolstering business.
Immigration, like China, also colored Monday’s discussions. While not on the forum’s agenda, the U.S. Senate’s apparent scuttling last week of a Bush legislative priority couldn’t be ignored, especially after years of criticism that the White House turned its back on Latin America while fixated with Iraq.
Bush, hoping to resurrect his immigration plan, is expected to meet today with GOP leaders.
"Immigration reform is alive and well," Gutierrez told reporters. "The reality is that unless we have immigration reform, we will not be as secure as we need to be and we will not have the work force we need to grow."
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