Regional Integration

The Bank is actively supporting intraregional integration processes in Latin America and the Caribbean through numerous regional and national projects. During the year, it approved two loans totaling $21.6 million and 14 grants totaling $4.1 million for tradeand integration-related projects (see Box 9 • Boosting Exports through Postal Services in South America).

The IDB has also played a central role in the global Aid for Trade initiative spearheaded by the World Trade Organization (WTO). The Bank, along with the WTO and the government of Peru, in September organized the first Regional Review Meeting, titled “Mobilizing Aid for Trade: Focus Latin America and the Caribbean,” which brought together finance and trade ministers, senior donor representatives, regional institutions and key private-sector actors. In November, the Bank participated in the WTO’s Global Review of Aid for Trade in Geneva.

The fast-growing Asian market also offers new export opportunities for Latin American producers. In conjunction with the Republic of Korea, the Bank in September organized the Korea-Latin America Trade and Investment Forum in Seoul to foster trade, investment and technological exchange between Korea and Latin American and Caribbean export and investment promotion agencies and company representatives.

The Bank is providing extensive analytical support on reducing trade costs, developing exports and inducing convergence and production networks among the region’s numerous trade agreements. The Bank also collaborated with the WTO on a joint publication, Regional Rules in the Global Trading System.

In the Andean region, the Bank hosted a Regional Policy Dialogue on Trade and Integration centered on the Andean-European Union trade negotiations. It supported Peru and Colombia in preparing a road map of institutional reforms for the implementation of free trade agreements with the United States and executed projects on rules of origin, services, investment and access for small and medium-sized businesses to the U.S. market. A white paper on labor issues requested by the Colombian government was completed.

During the year, the Bank approved a new strategy to support integration of the Caribbean Community (CARICOM) during the period 2007–2010. In June the Bank co-hosted a conference, titled “A 20/20 Vision,” on promoting Caribbean trade and tourism, encouraging competitiveness and investment, and improving social and economic equity. The event, also supported by the World Bank and the Organization of American States, was attended by numerous Caribbean heads of state, other officials and private sector leaders.

Nonreimbursable regional technical cooperation projects for Central America were approved in such areas as integration of three stock exchanges and fiscal and tax issues of the Customs Union. Support was also given to implementation of the Central America-Dominican Republic-United States Free Trade Agreement (DR-CAFTA) on intellectual property, rules of origin and labor laws. The Bank continued coordinating national and multilateral donors in the context of a white paper titled, “The Labor Dimension of DR-CAFTA .”

The Southern Common Market (MERCOSUR) also advanced in the free circulation of goods and the implementation of the Fund for Structural Convergence, which will support projects to reduce asymmetries among MERCOSUR countries. The Bank provided technical and financial support to regional institutions, such as the MERCOSUR Secretariat, the Trade Commission and the MERCOSUR Parliament, a newly established institution designed to help unify legislation in the member nations and foster greater cooperation.