Common Market for Latin America

Report Outline
New Drive for Economic Integration
Steps Toward Latin Economic Community
Difficulties in Path of Common Market

New Drive for Economic Integration

Anew effort to attain one of the major goals of the Alliance for Progress—economic integration of Latin America—is getting under way. The concept of a vast common market embracing all of the countries to the south, where more than 200 million people now live, is not itself new. The United Nations Economic Commission for Latin America has been studying proposals of the sort for a decade and a half. And two limited trading groups—the five-member Central American Common Market and the nine-nation Latin American Free Trade Association—have been established.

There is nevertheless still a long way to go to carry out the pledge made at the meeting in Punta del Este, Uruguay, where the Charter of the Alliance for Progress was signed in August 1961. Nineteen Latin American countries and the United States there resolved “to strengthen existing agreements on economic integration, with a view to the ultimate fulfillment of aspirations for a Latin American common market that will expand and diversify trade among the Latin American countries and thus contribute to the economic growth of the region.”

Some progress toward breaking down trade barriers has been made, particularly in Central America, and in the past two years the region as a whole has achieved the target of a 2½ per cent per capita increase in gross national product. But the pace of industrialization has not satisfied Latin economists. The economies of the 19 countries remain based for the most part on one or two export crops, whose prices on world markets are subject to wide fluctuations. The economies of many neighboring countries are similar rather than complementary—a circumstance that limits natural trading opportunities and forces competitive selling in the markets of industrialized nations. Tariff protection to hold off competition with domestic infant industries has proved difficult to modify or eliminate.