Date: April 7, 2008

Source: Canadian Economic Press

Washington – Treasury Secretary Henry Paulson extended firmer U.S. support to relations with Latin American countries on Monday during remarks at the annual meeting of a key regional development bank.

Speaking Monday in Miami at the annual meeting of the Inter-American Development Bank, Paulson said greater integration of trade and openness not only helps Latin American countries, but the United States as well. Paulson again warned against what he termed “protectionist interests,” saying that some efforts to draw the U.S. out of greater participation in international trade are a "disturbing trend."

"History has shown that those countries that open themselves to trade and investment prosper, while those that don't are left behind," Paulson said. "There is no doubt that we are in a time of rapid economic change. What we need to do is figure out how to deal with the job losses that come from trade and make sure that we do not turn isolationist."

The United States remain "firmly committed" to expanded world and regional trade, he added.

Necessary improvements to increase Latin American participation in world markets include greater efficiency and integration, he said. Where it takes an average of six days for a business to move its product from warehouse to port in the United States, it takes 22 days in Latin America.

The Inter-American Development Bank (IDB) is similar in role and function to the International Monetary Fund (IMF), though it operates on a smaller scale and focus in Latin American countries. According to its website, IDB loans and grants help finance development projects and are also aimed at reducing poverty, expanding growth and increasing trade and investment.

By the end of 2007, the IDB had approved over $156 billion in loans and guarantees to finance projects with investments totalling $353 billion, as well as $2.4 billion in grants and contingent-recovery technical cooperation financing.

"Financial services are the backbone of any modern economy, and access to capital can mean the difference between a people who thrive rather than just merely survive," Paulson said. "Effective access to financial services can enable even the poorest households to manage their financial resources."

Paulson also noted he had been questioned several times by IDB meeting attendees about the health of the U.S. economy, which continues to be battered by the secondary effects of the 2007 housing market collapse.

He said that although the housing correction continues, U.S. long-run economic fundamentals remain sound and the economy will work through the rough patch as it has in the past.

Latin American markets appear poised to weather the U.S. downturn with minor impacts, he added.

"Closer economic ties between nations create common interests and common goals that will lead to solutions rather than conflicts," Paulson said.