JavaScript

This website requires the use of Javascript to function correctly. Performance and usage will suffer if it remains disabled.
Latin America’s Emerging Trade Empire

Real Truth logo

Article

Latin America’s Emerging Trade Empire

Why is the region experiencing such surprising success in the global market?

Learn the why behind the headlines.

Subscribe to the Real Truth for FREE news and analysis.

Subscribe Now

In the realm of world trade, Latin America seems to be returning to its 15th-century roots.

During that time, explorers such as Christopher Columbus, Hernando Cortez, and Pedro Alvares Cabral stretched Spanish and Portuguese empires into South America in search of better sea routes for their nations’ gold and spice trades. By the 16th century, the New World provided immense wealth for the Spanish Empire. For example, Encyclopedia Americana states that for 25 years Madrid received $13 million annually in gold from Peru alone.

By strengthening political ties and employing tariff reductions with both China and the West, the nations of Mexico, Central and South America, and the Caribbean are set to become a formidable trade bloc.

The Washington Post stated that Latin America has an impressive combined GDP of $5 trillion and is one of the “richest markets in the world.” It mentioned “the emergence of Silicon Valley-like startup cultures that have a homegrown flavor and ethos. Startups are being launched in Chile, Argentina, Brazil and Mexico to create the same Internet niches as companies in the United States and Europe.”

A study by Visa and AmericaEconomia shows e-commerce in the region reached $43 billion during 2010, doubling 2009’s total, and continued economic growth is expected for 2012.

Latin America’s portfolio of untapped resources is impressive. Venezuela alone holds about 18 percent of the world’s oil reserves. The Amazon basin is known to possess as much as 20 percent of the world’s freshwater supply. According to the Inter-American Institute for the Cooperation on Agriculture, “Latin America is one of the few regions of the world where agriculture production can expand since it holds 42% of that potential globally,” MercoPress reported.

The UN’s Economic Commission for Latin America and the Caribbean pairs the region’s booming economy with China’s as “the current global growth poles.” The Asian giant appears on track to beat the European Union as Latin America’s second-largest trade partner, after the United States. But the report also states that the trend “could moderate if bilateral trade is energized following the partnership agreements between the European Union and Central America, the Caribbean, the Andean Community and, potentially, MERCOSUR [South America’s leading trade bloc].”

Researchers wonder why Sino-Latin American commerce relations have not taken off further, adding, “It is striking that the countries of Latin America and the Caribbean should attribute so much importance (however justified) to negotiations with the European Union…”

Europe, not China, appears to be the new door to Latin America’s 21st-century global trade.

“The bloc remains one of the globe’s most affluent regions and a formidable actor in the enforcement of world trade rules and business regulation,” Financial Times stated.

But the Latin American global-trade machine is just beginning to sputter to life. Once in high gear, it will play a prominent role on the world stage.

Commodities Exporter

In a letter to The Economist, the ambassador for Brazil in London, Roberto Jaguaribe, wrote, “Latin American countries have long been big exporters of commodities, the largest markets for which are outside the region. Trade among Latin American countries, by the way, reached an historic record of $160 billion…in 2011.”

Indeed, large areas of Latin America boast merchandise coveted by markets of the developed world. Latin countries are vital extraction and processing hubs for essential goods and raw materials such as crude oil, grain, iron ore, soybeans, rubber and cotton.

How good is business? The International Monetary Fund (IMF) summarized the outlook: “…external conditions will remain stimulative for much of Latin America: The double tailwinds of easy external finance and high commodity prices are likely to persist for a while, though not forever…this environment creates opportunities for Latin America—opportunities to build on the resilience and flexibility that has served it so well during the global crisis of 2008-09.”

In the midst of a troubled economy for the rest of the world, the report highlighted that the financially integrated economies of Brazil, Chile, Colombia, Mexico, Peru and Uruguay, experienced strong growth, currency appreciation, and primary fiscal surpluses leading to public debt reduction.

The IMF continued, “Latin America has been at the forefront of financial and capital account liberalization, especially between 1985 and 2000, and today stands, with Eastern Europe, as one of the emerging market regions with the fewest barriers to financial flows.”

Latin America has weathered turbulent times remarkably well. And there is much room for growth.

Business Partners

A brief look at some of the integrated Latin American nations shows they have been building stronger ties with Europe.

Mexico: The world’s top silver exporter was the first Latin American nation to establish a free trade agreement with the EU.

Peru: The nation is the world’s second-largest silver exporter, third-largest producer of copper, fourth producer of tin, and one of the largest producers of gold and lead, among others.

On June 12, German Chancellor Angela Merkel advocated the “rapid implementation of an EU free trade deal with Colombia and Peru, saying it was a good way to foster growth during the eurozone crisis,” Agence-France Presse reported. “Speaking after meeting Peruvian President Ollanta Humala, Merkel said: ‘Particularly in a situation where some European countries are having economic difficulties, a free-trade agreement with Colombia and Peru is a good sign to promote growth.

“‘Therefore we want it to come into force quickly,’ the chancellor added.”

Brazil: One of the world’s major iron ore producers, it is also the European Union’s top Latin American trading partner.

The Latin Business Chronicle provided a vivid description of a recent EU-Brazil transaction: “When German automaker Audi wanted to make a splash among wealthy Brazilians recently, it invited 12 Brazilian CEOs to fly first class to Istanbul, Turkey. Audi treated them like sultans, put them at the legendary Ciragan palace and incidentally, let them experience its new A8 model. It ended up selling four of this new luxury model to its guests. This is an example—somewhat extreme—of how much European companies are ready to invest to gain market shares in Brazil…Last year trade between the two areas jumped 34.3 percent to 63.6 billion euros (US$85 billion).”

Colombia: In May, the nation activated a long-awaited free trade agreement with the U.S. Along with Peru, the country will soon implement an EU free trade pact that is expected to further boost its GDP.

“Once infamous for its illicit drug trade and internal strife, Colombia’s efforts to address these issues have paid dividends,” The Globe and Mail stated. “Since 2002, when the military crackdown on the FARC (Revolutionary Armed Forces of Colombia) began, foreign direct investment (FDI) in Colombia has surged. Between 2005 and 2010, FDI in mining grew at an average rate of five per cent annually…Indeed, the last 10 years has seen Colombia’s potential to become a major gold-producing nation reawaken and build on a history of gold production that stretches back to the 1500s. In fact, until 1937, Colombia was the largest gold producer in the Americas. Already, Colombia has risen to become the 19th largest gold producer in the world and 5th in South America.”

Uruguay: While mostly an agricultural exporter, Montevideo houses the headquarters of Mercosur, the continent’s leading trading bloc. Yet ongoing talks for a trade agreement between the EU and Mercosur have been hindered by Argentina’s move to re-nationalize the oil company YPF, which had been previously purchased by the Spanish firm, Repsol.

In May, though, Spain’s Foreign Affairs minister “said that Madrid supports negotiations for a free trade agreement between Mercosur and the European Union on a ‘region to region’ basis, back stepping from his proposal last April to exclude Argentina following the seizure of YPF from Repsol” (MercoPress).

Chile: This major copper producer went from a third-world country to having the strongest sovereign bond rating on the continent in less than 30 years. One of its main moves to get there was astute: reducing tariffs and signing an incredible number of free trade agreements—as many as 59—including pacts with the United States, European Union, China, India and South Korea.

Years after Chile’s then-President Ricardo Lagos began trade talks with the U.S. at an Asia-Pacific Economic Cooperation summit, he wrote about the important role Europe played in his country’s success: “When I arrived at Bandar Seri Begawan, Brunei, in November 2000, I had one thing on my mind: trade…I decided to begin in Europe, understanding that making our case to the United States would be easier if we already had the European Union…on board” (The Southern Tiger: Chile’s Fight for a Democratic and Prosperous Future).

Europe is definitely on board. It is the main foreign investor in Latin America, and recipient of about 15 percent of its exports. The European External Action Service (the diplomatic arm of the EU) calls the two regions “natural allies linked by strong historical, cultural and economic ties.”

Ancient Merchants

While modern Latin American nations seem to be emulating European settlers from the 1500s and 1600s, the explorers in that Discovery Age also had an extraordinary historical precedent to follow. Centuries before, the Iberian peninsula (in southwest Europe) had already established a reputation for intrepid sea exploration and abundant commerce. The ancient city of Tartessus (also spelled Tartessos) was renowned for entrepreneurship.

Encyclopaedia Britannica states that Tartessus was a unique kingdom that flourished between 800 and 550 BC, and identifies it as an “ancient region and town of the Guadalquivir River valley in southwestern Spain, probably identical with the Tarshish mentioned in the Bible…The exact site of the town is not known, but archaeological evidence suggests it may have been near present-day Sevilla (Seville).”

A National Geographic special on the mythical city of Atlantis also makes reference to this ancient seafaring city. Believing it to be the genesis of the Atlantis legend, the show’s producer told The Jerusalem Post that “it is generally acknowledged that the Biblical Tarshish is what the historians call Tartessos, which was in southern Spain. In the Tanach, Tarshish is a great city with a huge navy, with silver and gold. Jonah sails towards Tarshish. Solomon has naval expeditions with Tarshish. Tarshish disappears from the Biblical record. Tartessos disappears from the historical record.”

The people of Tarshish were such skilled merchants that they likely spawned the myth of Atlantis! Legends aside, however, the city is nearly universally thought to be an epicenter of sea trade, and is considered to have been situated in the region of modern-day Spain and Portugal.

Scholars and Bible historians generally agree on the location of this ancient seaport. According to British geographer and cartographer Aaron Arrowsmith, Tartessus was a territory established by adventurous traders who settled in the Iberian peninsula after moving from the ancient city of Tarsus in Asia Minor (modern Turkey). These people were considered the “chief merchants in the early ages of the world; and the ships which they built for some of their distant voyages are thought to have been of a larger and stronger make than the vessels ordinarily used in navigation: hence ships appear to be denoted, in the Scriptures, by the appellation ‘Ships of Tarshish,’ and not from their having been at the city of Tarshish itself” (A Compendium of Ancient and Modern Geography).

History Repeats Itself

An often overlooked facet of human history, especially in the case of Latin America and its connection to Europe, is that nations are merely families grown large.

In the Bible, Genesis 10:1-4 states that Tarshish was a son of Javan, and great-grandson of Noah. Many inhabitants of Spain and Portugal are among the descendants of Tarshish. Through empire expansion, these men and women also settled in the modern Latin American world.

Families have tended to stick together throughout the centuries. Is it any wonder then that modern Latin America is again rising as a trade bloc? Is it really a surprise that this region of the world seems more interested in further strengthening ties with Europe rather than Asia?

History almost inevitably repeats itself. In this light, the precedent for Latin America tied to a unified Europe is ironclad.

Historian John Huxtable Elliott wrote: “One of the greatest empires in world history is known to us as the ‘Spanish Empire’, but this is not the name by which it was known to the Spaniards themselves. In the sixteen and seventeenth centuries there was only one true empire in the western world—the Holy Roman Empire…The sixteenth-century Castilians saw themselves as a chosen, and therefore a superior, people, entrusted with a divine mission which looked towards universal empire as its goal. This mission was seen as a higher one than of the Romans because it was set into the context on Catholic Christianity” (Spain and Its World, 1500-1700: Selected Essays).

Given its shared bloodlines, religious ties, and historical record, why are Europe and Latin America not even closer trade partners?

Coming Solution

Of course, there is an elephant in the room. The eurozone is in shambles and nearing a breaking point. Ireland needs a second bailout, Spain’s credit rating continues to be downgraded, and Europeans fear a run on the banks in Greece, among other problems. Understandably, people are frustrated and confused about the future of the continent.

Yet economic crisis in Europe has always meant one thing: change is coming—and fast. This always arrives in the form of a centralized government, often tied to unified religion, seizing power.

Such change first took place with Constantine in the Roman Empire and Justinian. Then under the Holy Roman Empire came Charlemagne (also called the “Father of Europe”), Otto the Great, Charles V, Napoleon and so on.

Each time, Europe gave power to one man to protect their lifestyles, and return them to the sort of prosperity seen under Constantine’s watch, especially if there was a threat of economic hardship.

Edward Gibbon’s The History of the Decline and Fall of the Roman Empire describes the continent at that time, when the capital of Constantinople “enjoyed, within their spacious enclosure, every production which could supply the wants or gratify the luxury of its numerous inhabitants. The sea-coasts of Thrace and Bithynia…still exhibit a rich prospect of vineyards, of gardens, and of plentiful harvests; and the Propontis has ever been renowned for an inexhaustible store of the most exquisite fish, that are taken in their stated seasons, without skill, and almost without labor.”

This sort of prosperity is what Europeans continue to seek today.

While it may sound impossible, it is clear that modern Europe is again moving toward the same type of fiscal integration. EUobserver reported, “European Commission President Jose Manuel Barroso has said member states must agree to a big common budget, a future banking union and—ultimately—political union in order to save the EU.”

The Financial Times quoted Russia’s EU ambassador Vladimir Chizhov, saying, “some people compare the EU with a crocodile. Not because of its teeth, but because of its inability to move backwards.’

“As for the eurozone’s future, the crisis has intensified calls for closer integration.”

Consider just a few headlines at the time of this writing, which all detail the continent’s desire for unity: “German finance minister: bank union only after more EU integration” (Reuters), “Italy’s debt worries add urgency to Merkel’s dream of integration” (Telegraph), “Spain’s embattled leader calls for greater European fiscal, banking integration to defend euro” (The Associated Press).

Clearly, this needs to occur for Europe to move ahead.

But what is necessary to allow the lifestyles like those seen under Constantine?

Supplies, and lots of them. Many of the modern descendants of Tarshish—who are also linked to the Holy Roman Empire—are rising in prominence and ready to supply the much needed raw materials Europeans will need to maintain their standard of living.

“Mart of nations”

The Bible not only explains the historical roots of Tarshish (as well as many other nations), but it also details future events for those peoples through the use of prophecy—which can be likened to history written in advance.

The same holds true for Europe. While each of the successive resurrections of the Holy Roman Empire hearkens back to the original one, in the Bible, the Holy Roman Empire is also likened to Babylon. This clue reveals what is to come for the EU and Latin America.

Revelation 18:16 describes a “great city”—revealed to be Babylon in verse 2—“that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls!”

When Europe unites once again, the result will be economic security and lives of comfort and abundance. Revelation 17:12-13 show that “ten kings,” or political authorities, will give power to one man.

Note how Europe is described in the rest of chapter 18:

Verse 3: “…the merchants of the earth are waxed rich through the abundance of her delicacies.” The entire world—including Latin America—will benefit from this economic powerhouse.

Verses 12-13: “The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood [cedar], and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble, and cinnamon, and odors, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots…”

Under the coming ruler, everyone tied to this European system will live “deliciously” (vs. 7), which is better translated “luxuriously.”

Details in Revelation 18 reveal why Europe will give power to one man: he will bring material riches. The coming unification will bring peace, stability—luxury! The masses will be on board with this new socio-political-military system. In fact, conditions in Europe, and likely Latin America, will be better than at any point in its history.

The Bible indicates that “ships of Tarshish” supply “all riches” to a soon-coming world economic power.

Notice: “Tarshish [was] your [Europe’s] merchant because of your many luxury goods. They gave you silver, iron, tin, and lead for your goods” (Ezek. 27:12, New King James Version). The rest of the passage describes how the people of modern “Tarshish,” along with other merchants from various regions of the world, trade with this system. This system is also referred to elsewhere as the “mart of nations” (Isa. 23:3).

Ezekiel continues, “The ships of Tarshish did sing of you in your market: and you were replenished, and made very glorious in the midst of the seas…When your wares went forth out of the seas, you filled many people; you did enrich the kings of the earth with the multitude of your riches and of your merchandise” (27:25, 33).

Yet there is a problem. Each of the resurrections of the Holy Roman Empire failed.

Despite its best efforts, Europe—and any man chosen to rule over it—will never bring the true lasting peace and abundant living so many desire.

And in the case of this time, the empire will meet a catastrophic end! Notice: “[The people] cried when they saw the smoke of her [Europe] burning, saying, What city is like unto this great city! And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas, that great city, wherein were made rich all that had ships in the sea by reason of her costliness! For in one hour is she made desolate” (Rev. 18:18-19). (To learn more about this topic, visit rcg.org/prophecy.)

Global Shift

Yet the story does not end there for Latin America’s modern ships of Tarshish.

Throughout the Bible another governmental system is pictured in detail. In fact, it is mentioned so often that Jesus Christ’s main message is named after it: the “gospel of the kingdom of God.” This can also be termed, the gospel of the government of God. This ruling system will finally bring the peace and abundance that humanity desires.

Soon after Europe’s prophesied rise and fall, this coming supergovernment will be established over the entire world. The book of Daniel states: “And in the days of these kings”—the 10 European “kings” mentioned in Revelation 17—“shall the God of heaven set up a kingdom, which shall never be destroyed: and the kingdom shall not be left to other people…and it shall stand forever” (Dan. 2:44).

Where does Latin America fit into all of this?

Isaiah brings the answer: “Surely the isles shall wait for Me [God], and the ships of Tarshish first, to bring…their silver and their gold with them, unto the name of the Lord your God, and to the Holy One of Israel…” (60:9).

Yes, Latin America will be first in line to transport riches to the capital city of this coming kingdom!

Eventually, all nations on Earth will begin to learn and apply God’s ways including how to do business correctly. His global supergovernment will bring ultimate peace and be established “with judgment and with justice from henceforth even forever. The zeal of the Lord of hosts will perform this” (Isa. 9:7).

The Bible contains a wealth of information of how life on Earth will be during this time. Read David C. Pack’s Tomorrow’s Wonderful World – An Inside View! to learn more.


FREE Email Subscription (sent weekly)


Contact Information This information is required.

Comments or Questions? – Receive a Personal Response!



Send

Your privacy is important to us. The email address above will be used for correspondence and free offers from The Restored Church of God. We will not sell, rent or give your personal information to any outside company or organization.


Latest News

View All Articles View All World News Desk