BREAKING BARRIERS

By Shi Peiran

Trade between China and LAC countries has rapidly evolved since the early 21st century. Since the 2008 global financial crisis in particular, their economic and trade cooperation has further intensified.

In 2019, bilateral trade hit a new high, with total imports and exports exceeding $400 billion, an increase of about 20 times compared with the early 2000s. China,replacing the U.S., from this point onward became the largest trading partner of or export destination for some major LAC economies.The figure rose to $450 billion in 2021, according to the General Administration of Customs of China.

China is the second largest trading partner of the LAC region.The LAC region is also the second largest destination for China’s outbound investment, with more than 2,700 China-funded enterprises operating there.

China has signed free trade agreements with Chile, Costa Rica and Peru. Furthermore, an upgraded free trade agreement with Chile came into effect in March 2019, and free trade agreement negotiations as well as related feasibility studies have been launched with Panama,Colombia and Uruguay.

China-made urea, for export to Panama, is lifted onto a freighter at a pier in Lianyungang Port, Jiangsu Province,on March 24, 2021

Despite the narrowing gap between the LAC’s two largest trading partners, China and the U.S. still differ in terms of total economic output and trade volume with the region. Like LAC countries, the U.S. is located in the Western Hemisphere and they share complex historical ties—politically, culturally and economically speaking. From the geopolitical viewpoint, both sides are inseparable.

China, in comparison, is physically far removed from the LAC region. But despite the geographical distance, they share a deep affinity and strong bond.The speedy development of China-LAC economic and trade relations is an example of South-South cooperation, presenting a better model for the developing world to follow.

And China-LAC trade, especially when it comes to the latter’s exports to the former, has much room for growth.

At present, the prospects for global economic development are uncertain, and the degree of economic recovery varies from region to region.Additionally, the growing frictions between China and the U.S. will inevitably affect the China-LAC relationship.

Considering both the international context and the status quo in China-LAC trade, both sides should promote infrastructure connectivity and cross-regional integration, reach a consensus on upholding globalization and oppose isolationism and protectionism.

The free trade agreements between China and a number of LAC countries have proved that reduced trade costs and preferential market access play a positive role in expanding bilateral trade volume.Upgrading these deals and promoting new free trade agreement negotiations, too, will continue to benefit both sides.

The two sides have encouraged trade facilitation undertakings and negotiations under the framework of the World Trade Organization,and both firmly support globalization. In the future, trade, commerce and customs departments of China and LAC countries will need to establish regular mechanisms to exchange views on the formulation and application of relevant trade regulations and measures targeting sanitary, phytosanitary and technical trade barriers at the national level, and continue to clear the road of obstacles on any given operational level.

China, as an Asian country with accumulated experience in the fields of infrastructure development, e-commerce and international logistics, could establish a higher level and wider range of infrastructure cooperation with the LAC region. BR