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Reindustrializing Latin America and the Caribbean

11 December, 2020On 8 December, more than 150 union leaders from the base metal, energy and automotive sectors in Latin America and the Caribbean completed a series of seminars and working groups as part of a project run by IndustriALL and Union to Union.

The discussion on a political and union agenda to promote regional reindustrialization focuses on sustainable development and ensuring a fair transition to a low-carbon economy. Together with academic experts a document with the main trends and possible scenarios for industry in the region over the coming years has been drawn up, expected to be updated in 2021 and beyond.

At the final seminar of the year, Maurício Borges Lemos, former director of the Brazilian Development Bank, explained that an exchange rate policy would be fundamental to any project to industrialize peripheral countries and establish an integrated development policy for Latin America.

Each country, or group of countries, would set up sector-specific industrial policy mechanisms. That would entail a combination of floating exchange rates and separate tax rates for each sector, although the same protective tariffs and duty drawbacks would be applied to all sectors. To enhance regional integration, those tariffs could be set at zero for interregional trade. 

Argentina’s ambassador to Mexico, Carlos Alfonso Tomada, looked at challenges caused by the economic, social and public-health crisis in Latin America. Digitalization and sustainability are a priority on government and company agendas, a transformation which impacts jobs and development, making it necessary to strengthen people’s power within the region.

"We need find a way to increase participation and create mechanisms to ensure a Just Transition, which basically involves ensuring greater union participation [...].

“We need to strengthen industrial dialogue to achieve productive agreements. Unless countries promote development through jobs and increased productivity, with the full participation of workers, we will not be able to reduce poverty and inequalities."

Valter Sanches spoke about deindustrialization in Latin America, caused by ultra-liberal policies and how the pandemic has changed the global economy.

"Latin America may see further deindustrialization as it no longer receives direct foreign investment as a result of ultra-liberal policies. As unions we must foster dialogue with governments, legislative bodies and multilateral organizations, and get involved in the economic process.

"We need to work together to create and promote sustainable industrial policies, as well as sovereign trade policies. IndustriALL's global action plan for fair trade and industrial policy, emphasizes the need to reverse the trend of deindustrialization and return to generating high-quality jobs in the region."