In a bilateral meeting that the presidents of Paraguay, Santiago Peña, and Guatemala, Bernardo Arévalo, in Montevideo yesterday, addressed the importance of strengthening regional integration between South America and Central America.
Both rulers participated in the investiture of the elected president of Uruguay, Yamandú Orsi, and the event was used to talk about the economic relations between the two blocks.
“Regional integration must be directed with the aim of promoting the economic, commercial and cultural development of our countries,” says a statement from the Presidency of Uruguay on the meeting. He adds: “We will continue working together to consolidate these ties and generate more opportunities for our countries.”
Opportunities
By consulting Amador Carballido, general director of the Guatemalan Association of Exporters (AGEXPORT), he explained that all markets represent a business opportunity and some that have not been able to develop represent a diversification that in the current times of global trade is a necessity.
He explained that the market in South America shares culture, language, population, tastes of consumption and a continent, but there are challenges in terms of transport, but it is not distant, so developing a market as such to do business would make much more sense to make “a start”, to have one in the Middle East.
From why it is not possible to develop a market in South America or a relevant trade, the manager explained that there are several elements that have analyzed, and the first is related that “there is a kind of similarity in what is produced in Central America and that region, in agricultural issues in which the same occurs, so it is ruled out that the agriculture was the largest”.
A position would be transformed products, manufacturing or services, the latter being the one that would have the opportunities immediately. Carballido cited as an example that, if the opportunities are in manufactured goods, that is when it begins to think that economies of scale and what occurs in Guatemala or the region has some advantage and the combination would be for processed foods.
“There are more chances of being able to sell to the southern end and start from the bottom up, in products in which we are strong such as processed food”
Amador Carallido, General Agexport Director
“It is easier to sell from the end of the southern cone, which we would like to sell to the closest point of our latitude. That is, it is easier to find products and services in Uruguay, Paraguay, Chile and Argentina; Then think up to Peru, Ecuador and Colombia. The size of the Economy Economy, ”said the manager.
They also need to work transport routes to travel to South America in maritime load that has limited and reaches through transfers that translates into times and costs, which has decreased interest in approaching.
Finally, there is a limitation to open the markets between the regions, because players such as Brazil or even Colombia can influence the productive structure.
“There are more chances of being able to sell to the southern end and start from the bottom up, in products in which we are strong such as processed food, it could be placed in that part of the world more easily, but transport routes and negotiate agreements are needed,” he said.
In any case, he said that you can talk about an agreement with Mercosur, which are Brazil, Argentina and Uruguay.
“President Arévalo’s statement is correct, it is important to open markets, it makes sense to sell to countries in the continent and we have cultural and idiomatic coincidences and finally there are many reasons why we should get there, but we have to work on differentiation or a battle of niches,” said the agexport manager.
There is also an opportunity to complement between both blocks in tourism, although there is regular air connectivity, but from Panama you reach all South America, and that more could be traveling for visitors exchange.
For the former Deputy Minister of Economy, Óscar Erasmo Velásquez, for the countries of Central America, the commercial balance with the countries of South America is minimal, compared to that which occurs with the United States and Mexico.
He recalled that the markets of the region are small compared to Brazil, which has a relative weight in South America and is very significant.
“Potentially they can be good markets, but the ability to entry derived in which the same is produced is reduced,” he concluded.