The Secretary of the Treasury of the United States, Janet Yellen, called this Thursday to strengthen the supply chains of the United States from Latin America, which would reduce dependence on China and counteract the growing influence of the Asian superpower in the region. She did so at an event at the headquarters of the Inter-American Development Bank (IDB), which, summoned by the president of the organization, was attended by several heads of state and government from Latin American countries.
“Let me turn to an area where we have a unique opportunity to collaborate much more closely: efforts to diversify supply chains. The United States is working with its partners on what I have called friendshoring, that is, the diversification of our supply chains with a series of trusted partners and allies. This has enormous potential benefits to boost growth in Latin America and the Caribbean,” said the Treasury Secretary.
According to Yellen, diversification not only offers the opportunity for a significant increase in trade, but also for innovation, in sectors ranging from renewable energy to semiconductors to medical supplies. “Latin American and Caribbean companies—already important partners of the United States in the manufacturing of solar and wind technologies—will increasingly have the opportunity to lead new areas of clean energy. For example, helping to create vertical supply chains by using locally mined lithium in local battery production,” she has given as an example.
In the healthcare sector, medical equipment and pharmaceutical companies can grow and innovate to meet increased demand, the Treasury Secretary added. “And in the semiconductor sector, the region’s skilled workers can expand the production of advanced materials, including the automotive chips needed for current and next generations of electric vehicles,” she cited thirdly.
Yellen has also reiterated her commitment to supporting a capital increase at IDB Invest to better mobilize private capital to the region. The capital increase proposal launched by the IDB for its collaboration arm with private sector companies and investors aims to implement a new business model that will significantly expand its impact in Latin America and the Caribbean. The idea is to mobilize a larger scale of private resources to respond to the development needs that the region faces in key areas, such as social issues, gender and inclusion, and climate change.
“I am proud to reaffirm the Biden-Harris Administration’s strong commitment to working with the IDB Group, under the excellent leadership of Ilan Goldfajn, to support strong, sustainable and inclusive economic growth, underpinned by commitments to democracy, equality, transparency, the fight against corruption and the rule of law,” said Yellen. The United States is the largest shareholder of the IDB, the development bank of Latin America. The organization recently partnered with the World Bank to work in coordination in the region.
The Secretary of the Treasury opened, together with Goldfajn, an event in which Gabriel Boric, president of Chile, also participated; Rodrigo Chaves Robles, president of Costa Rica; Luis Abinader, president of the Dominican Republic; Guillermo Lasso, president of Ecuador; Dina Boluarte, president of Peru, and Luis Lacalle Pou, president of Uruguay. All of them in Washington to participate this Friday in a meeting with the president of the United States, Joe Biden, and promote the so-called Alliance of the Americas for Economic Prosperity, which was launched at the Summit of the Americas in June 2022. A total Of 12 countries in the hemisphere are members of the Alliance, an initiative that seeks to address economic inequality and promote regional economic integration.
The IDB takes a leading role in promoting these policies. Ilan Goldfajn stated in his speech: “The IDB has the mandate to promote regional integration. It is our comparative advantage and it is in our DNA. “We are delighted to be the chosen conduit to mobilize more responsible investments for the region.”
Bilateral trade in goods and services between the United States and Latin America and the Caribbean was almost $1.5 trillion in 2022. In the last three years, the United States was the largest source of foreign direct investment in the region, representing almost 40% of total investment flows, according to the IDB. At the same time, however, Latin America and the Caribbean’s trade with China reached unprecedented levels in 2022, exporting about $184 billion in goods to China and importing about $265 billion, according to an analysis from the Center for Global Development Policy at Boston University cited by AP.
During the event, Goldfajn announced new tools for IDB for the Americas, a program launched in September to promote business opportunities and strengthen economic ties between the United States and the countries of the region.
Follow all the information Economy and Business in Facebook and xor in our weekly newsletter
The Five Day Agenda
The most important economic quotes of the day, with the keys and context to understand their scope.
RECEIVE IT IN YOUR EMAIL
#Yellen #proposes #strengthening #supply #chains #Latin #America #United #States