To Get Bolder or Give Up

In Bogota, the urbane and rainy capital of Colombia, 300 Latin American revolutionaries are meeting to plan an overthrow. Their target is not a paunchy dictator but a better-entrenched foe: the tariffs and trade barriers that divide Latin America. Their spearhead is the ambitious, nine-nation Latin American Free Trade Association, which so far in its four-year history has talked tall but acted small. As its two-month-long annual meeting began last week, the delegates muttered about "stagnation" and "frustration," agreed that LAFTA* has reached a decisive point at which it must either get bolder or give up.

Fear for Infants. The LAFTA members have lowered tariffs on an impressive total of 8,500 items, but most of the cuts have affected goods that are neither important nor hotly competitive. Though trade within LAFTA has risen from $660 million in 1961 to an estimated $1.1 billion this year, it still amounts to only 9% of the members' foreign commerce-a lower share than a decade ago. In an effort to bring about a genuine common market, the LAFTA delegates at Bogota will consider several proposals. One plan would trim all tariffs by 10% a year; a more popular proposal calls for 12% cuts by LAFTA's most advanced members (Argentina, Brazil, Mexico), ranging down to only 4% reductions by its least developed countries (Paraguay and Ecuador). Even with that, the less developed countries fear that their infant industries would be wiped out by a flood of imports from the more advanced nations, who then would dominate LAFTA.

A good deal more than tariffs serves to retard trade within LAFTA. Political and monetary upheavals discourage long-range trade deals, and export financing is hard to come by in Latin America's tight capital markets. The Latin nations produce roughly the same kinds of basic commodities, sell little to one another. Railroads, highways and ports in many areas range from primitive to nonexistent, and shipping is in short supply. "To intensify trade," says Ecuador's National Planner Raul Paez Calle, "we must have an infrastructure of communications, transport, power supply and, perhaps more important, a human infrastructure."

Proof of Wisdom. Despite all those problems, LAFTA could still make considerable progress if it were really willing to try. Mexico, for example, has increased its LAFTA trade fourfold since 1960, figures that it could buy still ten times more from the area. And if LAFTA wants proof of what wise action can accomplish, it need only observe the separate four-year-old Central American Common Market, whose five small members faced even greater disadvantages. They have drastically lowered tariffs across the board and started several regional organizations. Now they are talking about common currency, transportation, education projects.

*Embracing Mexico and all the independent South American countries except Bolivia and Venezuela, which are applying for membership.

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