By: Staff Writer
March 17, 2026
A former Jamaican finance minister said at the Inter-American Development Bank Annual Group meetings held on Paraguay last week that deeper integration for the Latin American and Caribbean (LAC) region could lower trade costs and cross border frictions.
Nigel Clarke, who is also the deputy managing director of the International Monetary Fund, said: “Deeper regional integration can be a powerful and practical tool for resilience, lower trade costs and cross border frictions can translate into a greater variety of suppliers for business, for higher trade and investment and for better resource allocation, closing gaps therefore in customs and transport infrastructure, reducing non-tariff barriers and strengthening trade policy coordination within The region can also support regional value chains.
He added: For example, there’s copper concentrate mined in one country, smelted and refined in another and then turned into wire, tubing or grid components in a third, resilience also depends on integration with the rest of the world.
“With deep and comprehensive trade agreements, firms can operate with more predictability as well as more sourcing and production options.
“That is why the recent EU Mercosur agreement is such a welcome development. It would bring together a market of 720 million people, covering nearly 21 percent of the entire global economy, and over time, it would help Mercosur exports to the European Union to grow by more than 17 percent according to economic modelling by the European Commission, while also encouraging more diversified and higher valued exports, the third and final point create an enabling policy environment for investment.”
Clarke also said: “Resilience requires investment, and investment requires good policies. Businesses can manage commercial and technology risks, but policy uncertainty can be a significant source of risk.
“Long term investment requires confidence, low and stable inflation, sustainable public finances, predictable tax systems, transparent regulations and strong, credible institutions. This is where the efforts of government and the private sector are complements and not substitutes.
“Governments create an environment for entrepreneurship, competition and investment, and as the IDB knows well, the private sector brings capital, technology, execution, capacity and market discipline, so to maximize long term private investment cross linked value chains, from energy supply and mining to processing and refining to grids and infrastructure and onto manufacturing, macroeconomic stability, predictable policy frameworks and regulatory clarity are absolutely essential.”