US rids 4 LatAm countries of trade benefits

The Donald Trump administration updated the list of countries considered developing nations, restricting certain benefits in trade negotiations involving those countries excluded. 

The US removed four Latin American nations, namely Argentina, Brazil, Colombia and Costa Rica from the list.

Countries on the list enjoy some privileges in trade talks with the US, including longer terms to negotiate and certain tariff advantages.

“The bottom line is that now in any trade dispute or investigation the US will be much more vigilant and rigorous regarding policy and potential retaliations to be adopted against those countries,” Welber Oliveira Barral (pictured), a former Brazilian trade executive ministerial secretary and lawyer specialized in trade issues, told BNamericas

Trump, who is seeking re-election in November, is trying to reduce the massive US trade deficit by restricting imports, mainly from China.

IMPACT ON LATAM 

The US decision is likely to have more impact on Brazil and Argentina than Colombia and Costa Rica, which have a free trade agreement with the US. 

In Brazil, the Jair Bolsonaro administration celebrated the US move to back the country’s bid to join the Organization for Economic Cooperation and Development (OECD). 

“The US intends to become closer in terms of trade, while Brazil is trying to open its economy. The main risk is that Brazilian industries are still not very competitive on a global scale and they can face a bad scenario with new competition,” the head of exporters association AEB, José Augusto de Castro, told BNamericas.

In Argentina, meanwhile, the weak performance of the economy puts the nation in a challenging position in any trade dispute.