The winding road through the Paso Internacional Los Libertadores, connecting Argentina and Chile, is a testament to the difficulties of trade within Latin America. Frequent delays occur due to snow, ice, and avalanches, with workers having to repair the road multiple times. Despite their efforts, the road gets damaged again soon after, leading to long wait times for drivers who often stop to smoke and contemplate the surrounding mountains. Border officials estimate that there is at least one crash per week in this busy trade crossing.
Despite these challenges, Latin America’s international trade has seen a slight increase over the past twenty years. However, it still lags behind most emerging markets, especially when Mexico’s strong manufacturing sector is excluded. In South America, trade in goods accounts for less than 30% of GDP, whereas in other emerging markets, it typically represents around 50%. This disparity highlights the need for improved infrastructure, trade agreements, and policies to enhance trade within Latin America and boost economic growth in the region.
The Paso Internacional Los Libertadores serves as a microcosm of the broader issues affecting trade within Latin America and the opportunities for improvement. Improved infrastructure will help reduce delays and damage at crossings like this one while also increasing efficiency across borders. Trade agreements can help lower barriers to entry for businesses operating in Latin America while also promoting greater economic integration between countries in the region. Policies that encourage innovation and entrepreneurship will also help drive growth in industries like manufacturing and technology. By addressing these challenges head-on, Latin America can unlock its full potential as a global economic powerhouse.
