Economic strength is a critical component of global leadership. "Around the world," said U.S. Deputy Secretary of State for Management and Resources Thomas Nides, "we see countries gaining power and influence not because of their militaries, but because of their economies. Not just China and India but Brazil, Mexico and Colombia." So, as the United States plans its economic strategy, it is not enough to look east to Asia. The United States also must look to the south, to the western hemisphere where there is a vast opportunity to enhance American prosperity and that of our partners in the region.
Latin America's economies grew by six percent last year. Over the next five years, the economies of Latin America and the Caribbean could grow by one-third. Many challenges remain, however, including countering transnational crime, promoting greater equality, and overcoming poverty and strengthening democratic institutions. And U.S. policies must continue to address these issues. But out of nearly six-hundred million people living in Latin America, 56 million households have joined the ranks of the middle class over just the last fifteen years. Forty-three percent of all U.S. exports stay in this hemisphere.
A critical element to expanding economic growth in the U.S. and Latin America is the promotion of trade. The U.S. Congress recently approved the Panama, Colombia, and South Korea Free Trade Agreements, which President Barack Obama signed October 21st. These agreements could add as much as twelve billion dollars to America's economic output, translating into many tens of thousands of new jobs for American workers. Colombia is already America's third largest market in Latin America. Last year, American exports to Colombia reached a record high of 12 billion dollars. In 2010, the United States exported 6.1 billion dollars in goods to Panama, resulting in a 5.7 billion dollar trade surplus. These trade deals give American businesses better access, new protections and recourse in case of disputes.
It is important for long-term stability in Latin America and the Caribbean that economic prosperity be shared as broadly as possible. Although many people have already moved into the middle class, there are still significant groups left behind, including indigenous people, women, ethnic minorities, afro-descendants, and isolated rural communities.
"We are living at a moment when economics is at the heart of what it means to lead in this world," said Deputy Secretary Nides. Continued economic growth can help the people of this hemisphere rise out of poverty and help emerging powers become strong partners in solving shared challenges.
As the United States plans its economic strategy, it also must look to the south, to the western hemisphere where there is a vast opportunity to enhance American prosperity and that of our partners in the region.
