Latin America's Competitive Position in the Enlarged European Market

Fostering the integration of the Latin American economies into the world markets is one of the main principles of the reform policies that have been undertaken by pratically all countries of the region. Much emphasis is given to a sustainable improvement of the export capacity and of the competitiveness of Latin American products in traditional and new markets. Europe, in spite of declining trade relations, still ranks first or second among the Latin American trading partners. Against this background the results of integration within the European economic area and their implications for trade with Latin America are discussed. The competitive position of Latin American countries is compared with that of South-East Asian as well as East European countries and reasons are provided for their different performance. The recent economic policy reforms in Latin American countries are assessed with regard to sustained improvement of their export capacity and whether they are sufficient to guarantee a continued inflow of foreign private capital. Finally, strategies are developed which aim at a deepening of trade and investment flows between Europe and Latin America.