Pioneering negotiations are currently in full swing. In addition to a possible restructuring of NAFTA, the modernisation of the EU-Mexico Global Agreement and the Free Trade Agreement between the EU and Mercosur, now almost twenty years in the making, are hopefully both entering their final rounds. As to whether successfully or not will become apparent over the coming year. The political constellations for this strategic rapprochement between the two regions are currently very good. The politically favourable window of opportunity could, however, close again in mid-2018 as a result of the election campaign in Brazil.
The second largest economy in Latin America, Mexico, is also due for a tense 2018. Elections of head of state, as well as senators and deputies, are scheduled for July. And, as has been seen recently in various EU countries, their results are far from certain. But it is most particularly in Brazil that they are paramount. It is only recently that the severe and prolonged recession has been overcome and that growth forecasts could again be revised upwards. Once more, political stability remains a key prerequisite for the good economic situation. Colombia is also electing a new president and congress in May. Furthermore, Argentina will be attracting the world’s attention through its G20 presidency – the first ever to be held by a South American country.
So it is crucial and right that we, too, more closely pursue development in a country that is home to more than four thousand companies with a German background and an investment portfolio of just under fifty billion euros – and, of course, continue to venture forth in Latin America!
LADW Chairman and Member of the Group Board of Management Volkswagen AG
Sunday Brief N°7
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