Between May 18 - 19, 2016, delegations from the 36 member countries of the Forum for East Asia-Latin America Cooperation (FEALAC) gathered in Seoul, Korea to participate in the annual workshop and seminar on Inter Regional Trade.
The seminar was intended to promote debate and a greater understanding about the effects that new developments in the international trading system, such as Mega Free Trade Agreements (FTAs), could have on the commercial relations between East Asian and Latin American countries (LAC), and how to achieve greater integration under this scenario.
The seminar was divided into three main sessions, moderated by Tae-wan Huh, Deputy Director-General of the Latin American and Caribbean Affairs Department within Korea’s Ministry of Foreign Affairs; Arnaldo Castillo, Hondura’s Minister of Economic Development; and Cesar Dargam, Vice Minister for Economic Affairs and Trade Negotiations of the Dominican Republic’s Ministry of Foreign Affairs.
The seminar was organized around presentations from a panel of 12 speakers from member countries, each focusing on different topics, thus creating a rich atmosphere for discussion and debate.
The panelists’ presentations could be grouped into three big themes. To start, the panelists offered an overview of the commercial relations between East Asia and Latin America. They reviewed the deficit in the balance of trade that most LAC currently experience with East Asia. In addition, they addressed the low participation that LAC have in Global Value Chains, making room for increasing trade and investment among the two regions.
Furthermore, they identified several regional trade agreements that exist across the Pacific, creating a network interlinking both regions, further providing opportunities for increasing trade and investment. These Agreements include:
A second theme covered during the seminar was how certain countries have seized the opportunity to be part of the trade liberalization dynamics. For countries such as Mexico, Chile, Japan and Malaysia, for example, this open trade policy has allowed them to actively participate in several trade liberalization initiatives, and to be a part of the new Mega FTAs. As a result, these countries have managed to diversify their exports and participate in the global value chains that these agreements facilitate. The panelists’ purpose of exploring these trade liberalization policies was to provide best practice examples for countries outside this trend.
A third big theme that surfaced during the seminar was the possible effects that Mega FTAs could have on outsiders, that is, on countries not actively participating in this trade dynamic. There was a common understanding that the proliferation of such Agreements will only increase the difficulties experienced by outsiders, given that trade will increasingly take place within such agreements, and outsiders will be further isolated from the international trading system. However, there was a general consensus that it was still too early to describe exact effects, either negative or positive, given that no Mega FTAs have yet been implemented.
During the final general discussion, panelists and the audience agreed that the current changes in the international trading system will have an effect on the commercial relations between the two regions; both for countries who are already part of the changes and for those outside the liberalization framework. With this in mind, there was a consensus on the importance to further analyze FEALAC’s role in helping countries to cope with such changes.
Some of the key positions that emerged during the discussion about FEALAC’s goal to help achieve greater integration, are as follows:
Trade related barriers are still present, affecting the commercial relations between the two regions. FEALAC could help address this as a way to promote and increase trade relations and development.
The importance FEALAC has beyond trade: since it also fosters cooperation on other common issues such as the environment, culture, politics, education, and others, by providing a platform for joint projects to tackle these topics.
Further defining FEALAC’s role: as the only forum for these two regions, it could be given the capacity and responsibility to bring people together, to actively look for new ways to promote relations and to improve member countries’ well being.