How regional markets could integrate deeper into global value chains

Latin American countries could integrate deeper into global supply chains as a result of the disruptions the pandemic and Russia’s invasion of Ukraine have caused. To achieve this, however, the region's business environment needs to improve.

Myron Brilliant, executive vice president and head of international affairs at the US Chamber of Commerce, the world’s largest business association, talked with BNamericas about these needs and opportunities during his visit to Brazil and Colombia.

BNamericas: Which countries in the region have most potential for US players?

Brilliant: On this trip, I’m focused on Brazil and Colombia, but there are strong partnerships and untapped opportunities throughout the region.

BNamericas: Global supply chains have been disrupted by the pandemic and the war in Ukraine. Could this development facilitate deeper integration of Latin America into supply and value chains?

Brilliant: The COVID-19 pandemic has caused unprecedented disruptions to local, regional, and global economies. As we come out of this pandemic together and look toward recovery, we have an opportunity to pursue a more integrated regional economy that will enable companies in the Americas to be increasingly competitive on a global scale.

As companies look to build more resilient supply chains, there is an opportunity for Latin American and Caribbean markets to increase their insertion into global value chains and attract investment. 

To do so, it will be critical to build a stronger business climate by strengthening the rule of law, as well as by focusing on trade facilitation measures to move goods more efficiently and securely through customs and investments to improve transportation and logistics infrastructure.

BNamericas: What is your view on the political, regulatory, and contractual environment in Latin America? How will countries become more business-friendly?

Brilliant: There are tremendous opportunities to build on the strong, strategic partnership the US has with many countries throughout the region. 

To help reactivate sustainable growth in the Americas, we need an ambitious trade and integration agenda. This includes strengthening the rule of law and investment climate through enhanced regulatory transparency, predictability and stability, accountability and due process; promoting the digital economy through digitization and expanded access to broadband; increasing bilateral trade and reducing barriers to trade; fostering the development of a resilient healthcare system through a regulatory system that supports innovation and competitiveness, and advancing sustainable policy solutions.

BNamericas: What’s on the agenda during your visits to Brazil and Colombia?

Brilliant: Both countries are strategically important for the US. 

During my visit, I will meet with local and regional companies and business associations to discuss opportunities for strengthening economic ties even further. This includes the need for an ambitious trade and integration agenda to spur sustainable growth in the Americas. 

I am also highlighting the upcoming IV. CEO Summit of the Americas, which will be organized by the Chamber of Commerce in partnership with the Department of State when the US hosts the IX. Summit of the Americas in Los Angeles the week of June 6.

BNamericas: What expectations do you have for the CEO summit?

Brilliant: The CEO summit will convene business leaders from across the hemisphere to discuss key issues for the economic growth of the region. We will leverage the power of the private sector to bring together diverse business leaders, including those representing small and medium-sized enterprises, from the US and across the hemisphere to drive innovative, practical solutions for a brighter future across the Americas.

For the private sector, this is a huge opportunity to highlight the business community’s priorities to the leaders of the region and convey a commitment to leading economic recovery, while also making clear the pro-growth policies that are needed to make this happen.

The summit will focus on championing a pro-growth trade policy, building robust and resilient health economies, advancing an action plan for digital transformation, greening growth through energy transition and sustainability, enhancing rule of law, and strengthening inclusion in regional trade and supply chains, with a focus on small and medium enterprises.

BNamericas: What else is key?

Brilliant: One area of focus for us in the Americas is environmental sustainability. Transitioning to more sustainable energy sources not only reduces environmental harm, but can also create good jobs, provide valuable new services, and build resilience. Shifting to more sustainable business practices also provides the opportunity to accelerate economic recovery and create and maintain globally competitive green workforces. 

As Latin American countries step up their decarbonization goals and create policy and regulatory environments that support a shift to low and zero emissions, capital and technology deployment by the private sector will play a key role in this effort. It will largely be up to the business community to develop, finance, build, and operate the solutions needed to power economic growth worldwide, mitigate greenhouse gas emissions, and build resilient, lower-carbon infrastructure.

The digital economy is key to driving growth in the US, which is why the chamber is calling for a digital trade agreement. COVID-19 has accelerated the shift toward digital trade; however, even before the pandemic, in 2019, the US digital economy was growing almost three times faster than the broader economy. A digital trade agreement can help address growing digital protectionism and guarantee the ability to move data across international borders, prohibit forced data localization, and bar customs duties on electronic transmission, among other objectives.