The embrace of democratic and free market principles has been a major impetus for trade expansion in the 1990s. Privatization, deregulation and market opening principles to which the Council of the Americas is dedicated have transformed the marketplace. The current financial crisis has put these reforms under tremendous stress in some countries. Popular sentiment is growing against the burden of policies designed to restore health to economic accounts and banking systems. Mexico is the clearest example.
Brazil now seems to be following a similar path.
In a recent speech here in Washington, Brazilian Finance Minister Milan forecast his country's GDP decline this year at less than three percent much smaller than previous predictions. Significantly, he cited privatization and market reform measures taken before the current downturn as factors that have eased the economic blow. This is all the more remarkable since Brazil achieved some of its hardest fought reforms after its devaluation. In Argentina, no one is doubting the durability of the Convertibility Plan. In Central America, there is a realization that, along with the cessation of internal hostilities, trade opening and recent economic and legal reforms will make the reconstruction from Hurricane Mitch much easier.