Latin American South-South integration and cooperation: from a regional public goods perspective

Abstract

The present level of intra-regional trade of Latin America and the Caribbean in relation to their total exports is still low when compared to the peak of 21.1% registered in 1997, despite its rebound in 2003 and continued recovery into 2004. While this trade holds a high potential for future growth, there are a series of problems to be addressed in order for regional integration to continue on the paths of recovery and deep integration. The countries in the region should keep working on the constraints that its regional integration process continues to suffer from the persistence of non-tariff barriers, perforations of common external tariffs (CET) and failure to complete customs unions. In addition to these aspects in the trade spheres, regional integration agreements should tackle several dimensions of "deep integration" in a context of "open regionalism" by intensifying efforts on the provision of regional public goods (RPGs): (i) addressing "behind-the-border" measures, while harmonizing regulatory regimes in areas such as services, investment, intellectual property rights, rules of origin, anti-dumping, safeguards, sanitary and phyto-sanitary norms, customs procedures, and factor mobility; (ii) advancing the efforts on the coordination of macroeconomic policy; and (iii) improving various kinds of infrastructure and providing crucial public goods. These efforts will enhance systemic competitiveness of each country and the region as a whole. These initiatives, which would result in the reduction of production and transaction costs inside the region and the avoidance of unnecessary competition among the countries, will likely facilitate inter-regional South-South trade as well.""