Remember Europe '92, the drive to take down barriers to trade and investment by 1992? Well, quietly and without much fanfare, Latin America is embarking on a similar mission. As Washington dithers about expanding NAFTA southward, Latin nations are going about their business creating a variety of free-trade zones. Washington politicians may not believe in the value of open markets--witness Congress' pressure on President Clinton to give up authority to "fast-track" trade deals--but U.S. corporations do. A growing number of them are joining newly privatized brethren in Chile, Argentina, and Brazil in establishing one of the world's largest markets.
While George Bush once envisioned a free-trade zone "from Alaska to Tierra del Fuego," America's new reticence is pushing Latins to create their own free economic spaces from Santiago to Rio. The biggest is the Mercado ComPound n del Sur, or Mercosur, a four-nation pact that includes Argentina, Brazil, Uruguay, and Paraguay and covers a population of nearly 300 million. But there is also the Caricom in the Caribbean and a network of bilateral trade agreements among Mexico, Chile, Venezuela, Colombia, and the trade blocs themselves.
As in Europe, U.S. multinationals are beginning to set up their operations to take advantage of each country's strengths, expecting to trade freely within the bloc. Both Eastman Kodak Co. and General Motors Corp. are shifting strategies to take advantage of Mercosur's diversity.
When the leaders of 34 countries in the hemisphere meet in Miami for the Dec. 9-11 Summit of the Americas, they will be gathering at a time when Latin America is "hot" again on the world economic stage. In the past two years, Latin America exports have nearly matched the 81/4% annual real growth rate of Asia's newly industrializing countries (NICs). Their imports, at 13% per year, have actually outpaced the NICs of Asia. If Washington politicians choose to turn a blind eye to these enormous developments, Corporate America should not.