Recent exports from Latin America and the Caribbean to the Middle East were close to US$26 billion
Caracas.- The Latin American and Caribbean Economic System (SELA) will present on Tuesday 28 August at the headquarters of the Permanent Secretariat the document “Relations between Latin America and the Caribbean and the Middle East: Status and areas of opportunity”, which deals with the status of such relationship, its main features and the issues that the region should address with the nations of the Middle East.
This document provides an outlook of the current status of the bi-regional relation. An analysis is made of the legal framework of bilateral and bi-regional relations between Latin America and the Caribbean and the Middle East. The institutional foundations of bilateral agreements show, inter alia, a rich agenda in cooperation for development, growth, reduction of poverty, environmental protection, culture and education, energy efficiency and utilization of renewable energy sources, as well as shared views in regional and multilateral forums. Such agreements mirror common objectives and show the importance given by both regions to multilateralism as the way to reach agreements and settle disputes.
Relations between Latin America and the Caribbean and the countries of the Middle East had a tremendous momentum in 2005 upon the commencement of the Summits of South American-Arab Countries (ASPA), the first of which was held in Brasilia based on a full agenda of items of political, economic, cultural, science, technology and environmental coordination. Furthermore, the ASPA mechanism has become institutional through summits, meetings of foreign ministers, and working groups, together with the business component.
The document says that the rapprochement between both regions is not new at all. It dates back to the migration flows of the 19th Century, when people from the Middle East migrated to several countries of Latin America and the Caribbean. There was also rapprochement after World War II, when several countries in the Middle East gained independence.
The renewed interest in building bridges between the two regions, as appears from the establishment of the ASPA, opens a wide array of opportunities thus far barely explored due to the geographical location, unawareness of the respective realities, constrained reciprocal trade and investment flows, little liaison, and an institutional legal framework that ought to be sounder to bolster bi-regional relations.
Today, South America and the Middle East are in a better position to make strides with a win-win cooperation agenda. Nonetheless, the relation is still incomplete; there is the need to add to such standing dialogue Central America, the Caribbean and Mexico, which altogether account for more than 150 million inhabitants. While these countries are not parties to the ASPA, their links with the Middle East could strengthen the mechanism.
The negotiation of trade agreements has been a way of bilateral and bi-regional rapprochement. Agreements have been executed for investment promotion, laying the foundations for trade flows, investment and entrepreneurship. Bilateral and bi-regional trade is still incipient, focused on few products, with a very low proportion compared to the country and regional trade with the rest of the world.
The study stresses that in 2010, Latin American and Caribbean exports to the Middle East amounted to US$ 25.77 billion, as low as 2.91% of the total exports of the region (US$ 885.90 billion). For their part, Middle East exports to Latin America and the Caribbean totalled US$ 13.67 billion. This means that Latin America and the Caribbean buy the Middle East only 1.54% of foreign purchases. These figures hint to the potential of new trade opportunities in both ways.
Interestingly, the business communities of both regions, organized in bilateral chambers and associations, lay a sound foundation to lever up trade and investment in the long term and may act as a powerful catalyst to further business between the parties.
South-South cooperation is among the areas where Latin America and the Caribbean can cooperate in a constructive manner, with a view to strengthening their reciprocal relationship and their stances on global matters. This paper probes some meeting points identified in several regional and multilateral forums, as well as in the ASPA, with regard to energy, environment, education and culture, tourism and transportation.
With this document, the Permanent Secretariat of SELA continues making proposals with a view to strengthening the relations of Latin America and the Caribbean with the Middle East, under the political and social circumstances of several nations of the Middle East.