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Begin New Search Political Geography Latin America Content Type Policy Brief

1. Korea’s Trade Policy Priorities with Latin America: Future Directions

Author:
Sungwoo Hong
Publication Date:
02-2025
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Despite Latin America’s potential as a trading partner, Korea’s exports to Latin America have continuously decreased over the past 10 years, while imports from Latin America have been increasing. The fact that Korea’s exports to these countries have decreased since the conclusion of FTAs with Chile, Peru, and Colombia suggests that it is time to identify the cause of Korea’s decline in exports to Latin America and seek opportunities to expand exports. One reason for the decline in Korea’s exports to Latin America is the decline in Korean companies' investment in Latin America. The correlation coefficient between Korea’s investment in Latin America and exports is quite high, indicating that the decline in investment since the mid-2010s has had a direct impact on the decline in exports to Latin America. As a short-term trade policy goal to consider, I propose establishing and activating a channel for cooperation between Korea and Latin America. It is possible to establish new dialogue channels and revive existing ones, centered on countries where consultative bodies such as the Resources Cooperation Committee, Senior Policy Council, and Joint Economic Committee have already been established, making this a more cost-effective approach compared to other initiatives As a task to be pursued from a long-term perspective, I propose preparing for the possibility of economic integration between the United States and Central America. Assuming that the conflict between the United States and China will continue in the future, expanding economic integration between the United States and Central America can be positive for Korea in that it can alleviate some of the uncertainty Mexico currently has as a bridgehead targeting the US export market. However, expanding economic integration between the United States and Central America is not only difficult for Korea to directly intervene in, but also requires economic and diplomatic efforts in parallel, meaning it may be difficult to achieve in the short or medium term, and thus needs to be pursued as a long-term task. Central American countries, excluding Nicaragua, may be countries that currently have a demand for increasing the level of economic integration with the United States, and the United States may also consider expanding economic integration with them.
Topic:
Investment, Exports, Trade Policy, and Economic Integration
Political Geography:
Asia, South Korea, and Latin America

2. Trade with Colombia is big business for US exporters—amid growing Chinese influence in Latin America

Author:
Geoff Ramsey and Enrique Millán-Mejía
Publication Date:
03-2025
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Colombia and the United States have achieved a close, mutually beneficial partnership over several decades on migration, security, counternarcotics, and commerce—with the US trade surplus with Colombia totaling $1.3 billion in 2024. The Colombian market is particularly important for US agricultural producers. Thanks to the US-Colombia Trade Promotion Agreement (TPA), Colombia is the top destination for US agricultural exports in South America and the third main destination in the Western Hemisphere. The United States is still Colombia’s largest trading partner in South America—with $36.7 billion in two-way trade in 2024—but January data showed Chinese products leading over US imports for the month. The TPA promotes both reciprocal trade and US influence; interpretative improvements to previously agreed-upon matters are possible,
Topic:
Economy, Business, Tariffs, Exports, Trade, and International Markets
Political Geography:
China, Colombia, South America, Latin America, and United States of America

3. Uncertainty in Caracas: What Awaits Venezuela's Maduro in his Third Term?

Author:
FARAS
Publication Date:
01-2025
Content Type:
Policy Brief
Institution:
Future for Advanced Research and Studies (FARAS)
Abstract:
On January 10, 2025, Venezuelan President Nicolas Maduro was sworn in for a third six-year term. The opposition condemned this event as a "coup," accusing Maduro of election fraud in connection with the presidential elections held on July 28, 2024. In response, the government organized a rally in support of Maduro in the capital. Meanwhile, the opposition staged a protest led by Maria Corina Machado, who made her first public appearance since August 2024.
Topic:
Economics, Elections, Protests, Organized Crime, Social Unrest, and Nicolas Maduro
Political Geography:
South America, Latin America, and Venezuela

4. ‘Maximum pressure’ sanctions on Venezuela help US adversaries, hurt Venezuelans

Author:
William Tobin
Publication Date:
01-2025
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The “maximum pressure” strategy employed from 2018 to 2022 against the illegitimate Nicolás Maduro regime in Venezuela did not serve US interests. Stringent oil sanctions imposed on Venezuela forced the retreat of Western oil firms from the country, principally benefitting adversaries. During the maximum pressure campaign, Venezuela’s oil production was rerouted to China at discounted prices, Iran supplied the diluent Venezuela required for oil production, and Russian investors became more critical amid a dearth on Western investment. A democratic transition remained elusive while repression and human rights violations continued. Venezuelans suffered, US adversaries expanded their influence, and Maduro remained. The current system of issuing specific licenses for Western oil producers to operate in Venezuela has yielded superior results. The benefits of this policy have been the following: Venezuelan oil exports have been diverted to friendly nations. Treasury has increased visibility on all oil-related transactions, decreasing the clandestine shipment of oil through shadow tanker fleets operated by the Chinese defense establishment, Iran, or PDVSA. Compensation to the regime is limited to taxes and royalties, which are required by Venezuelan law. The system has enabled the return or reemployment of qualified engineers and technicians to restore production from degraded oilfield infrastructure. The incoming US administration should prioritize inflicting more harm on the regime and its enablers than the Venezuelan people—or US interests. To do so, sanctions must be linked to clear objectives. An uncalibrated reapplication of maximum pressure would cede influence to China, Russia, and Iran, while doing little to loosen the regime’s grip on power. Instead, the existing system of specific licenses should be maintained and expanded. To punish Maduro, the administration should continue to target individuals who enable his illegitimate rule, adding to the 180 individuals already sanctioned by the Treasury. A targeted sanctions policy—not maximum pressure—is the only way to ensure that US actions to confront the Maduro regime impose their desired effect, and do not play into the hands of Beijing, Moscow, or Tehran.
Topic:
Markets, Governance, Sanctions, Geopolitics, Economy, and Energy
Political Geography:
South America, Latin America, Venezuela, and United States of America

5. The geoeconomic turn in the Americas: The Dominican Republic at the centre of Washington’s return

Author:
Lauri Tähtinen
Publication Date:
09-2025
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
The tide is turning rapidly as the United States shifts its response to China’s industrial rise, with Washington returning to the Western Hemisphere in search of not only new trade relationships but also industrial, foreign, and security policies. This shift reflects a geoeconomic turn in the Americas, where economic actors – from drug cartels to critical supply-chain partners – are increasingly treated as security concerns, blurring the line between commerce and security. The Dominican Republic is positioning itself as a partner in both the joint development of the Americas and US security. Its growing alignment with the United States reflects global shifts elsewhere, such as in Finland’s relationship with Washington. The Dominican Republic’s sustained economic growth and its location between the US territory of Puerto Rico and the region’s security challenges place it at the centre of Washington’s attempt to re-engineer hemispheric value chains and security partnerships.
Topic:
Security, Defense Policy, Economic Growth, Trade, Supply Chains, and Geoeconomics
Political Geography:
Latin America, North America, and United States of America

6. Latin America’s Role in De-Risking Semiconductor Supply Chains

Author:
Ryan C. Berg and Rubi Bledsoe
Publication Date:
08-2025
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
While the semiconductor supply chain currently spans several continents, China has made efforts to develop a self-sufficient semiconductor manufacturing ecosystem through industrial policies such as “Made in China 2025,” which presents a direct strategic and economic challenge to the United States. De-risking the semiconductor supply chain, particularly that of “legacy chips,” is of paramount importance, particularly at a time in which the Trump administration considers imposing additional sectoral tariffs on semiconductors. Latin America sits at the juncture of possibility and opportunity at a critical time for the expansion of semiconductor manufacturing, providing some of the key elements and capabilities that allow for semiconductor assembly, testing, and packaging as well as final integration into electronics. For companies relying on semiconductor manufacturing, diversifying production sources is key to reducing the risks associated with supply chain disruptions and great power competition.
Topic:
Manufacturing, Strategic Competition, Supply Chains, and Semiconductors
Political Geography:
Latin America

7. Brazil’s split worlds: Navigating between the Global South and the United States

Author:
Lauri Tahtinen
Publication Date:
07-2025
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
Brazilian foreign policy, traditionally nonpartisan, is increasingly shaped by domestic political divides, complicating alignment with global powers. This also fuels unpredictability, especially in relation to the United States. Brazil’s political right is looking to align with Washington in a bipolar world order, while its political left still seeks multipolarity through the Global South and with the help of the Global East. If, contrary to many expectations and current Brazilian policy, the world becomes bipolar, Brazil may be forced to pick sides, challenging its tradition of balanced diplomacy. If the world appears to be heading towards multipolarity, this would fulfil a long-held Brazilian foreign policy objective. However, Brazil faces regional dynamics that, perhaps paradoxically, resemble bipolarity, as South America remains only a secondary, or even tertiary, zone for great power competition. Hosting major forums like the G20, BRICS, and COP30 puts pressure on Brazil to deliver more consistent global messaging, limiting its room for strategic flexibility.
Topic:
Global South, Multipolarity, Strategic Autonomy, Great Powers, and Middle Powers
Political Geography:
Brazil, South America, Latin America, North America, and United States of America

8. Mexico: A Pivotal State on the Global Stage

Author:
Ryan C. Berg, Rubi Biedsoe, and Michael Ferguson
Publication Date:
12-2025
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
In his 1867 Manifesto to the Nation, Benito Juárez famously stated: “Among individuals, as among nations, respect for the rights of others is peace.”1 Spoken by Mexico’s first indigenous president, Juárez’s quote demonstrates Mexico’s view of the global order—that countries should promote national sovereignty, security, and prosperity through collaboration and dialogue rather than through intervention. Mexico effectively operates with one foot in the door of the Global North, via its position in North America, and one foot in the door of the Global South, as one of the leading economies and cultural powerhouses of Latin America. This hybrid role, characterized by some as a “pivotal state,” has created both opportunities for leverage and areas of tension with other countries, particularly with regards to its close but complicated relationship with its northern neighbor.2 A key player and beneficiary of a global economy underpinned by a U.S.-led order, Mexico has found itself in a state of “autonomy within limits,” by which U.S. interests oftentimes circumscribe Mexico’s range of potential actions.3 Being the United States’ southern neighbor both grants Mexico unmatched economic benefits and presents it with a delicate balancing act: In pursuing autonomy within limits, Mexico must maximize its benefits from the Western-led order while asserting its sovereignty and reducing its dependence on the order’s biggest players, especially the United States. This tension influences Mexico’s policy positions as its presidents balance nationalistic rhetoric at home and trying to assuage U.S. concerns. Mexico’s balancing act also exacerbates divisions between the country’s pro–Global North elites and its disadvantaged populations who have not received the benefits of global economic integration, which has led to the success of the social welfare and populist-oriented Morena party. Mexico’s effort to maintain relations with its neighbor to the north consumes most of its foreign policy energy. But Mexico’s foreign policy DNA, often described as noninterventionism or the Estrada Doctrine (after Foreign Affairs Minister Genaro Estrada), can sometimes undercut its desire to play a leadership role on the global stage. Mexico firmly believes that nonintervention in the internal affairs of other countries can earn it a seat at the tables that matter, allowing it to negotiate or mediate conflicts. In practice, however, Mexico has demonstrated little global leadership of late, preferring to stay on the sidelines (and under President Lopez Obrador, to focus on his project of domestic transformation). Mexico’s ultimate goal is to exert full sovereignty over its domestic affairs; it has also used its political capital on the global stage to openly criticize the role of U.S. sanctions and containment policies against Cuba, Nicaragua, and Venezuela for contributing the region’s security and migration crises. Further, Mexico does not see the world through the West’s post–Cold War lens, but rather as a group of politically equal states. China and Russia are treated as normal states in the international system the same way Algeria, Ethiopia, or Thailand might be.
Topic:
Foreign Policy, Economics, Geopolitics, and Strategic Competition
Political Geography:
Latin America, North America, and Mexico

9. Analyzing how rampant organized crime is impacting Latin America’s stability ?

Author:
FARAS
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
Future for Advanced Research and Studies (FARAS)
Abstract:
The ongoing violent tensions engulfing some Latin American countries, starting with Ecuador in the east and extending to Haiti in the Caribbean in the west, raise questions about the motives behind the growing illicit activities of organized crime across the continent. Those activities include drug production and trafficking, human trafficking, arms smuggling, and others. Such transnational crimes pose security threats and challenges to the countries of the region and neighboring states, foremost among them the United States, which has historically regarded Latin America as its backyard, allowing no one to approach the continent or interfere in its affairs without prior permission.
Topic:
Crime, Political stability, Violence, Organized Crime, Gangs, and Regional Security
Political Geography:
Latin America, Haiti, and Ecuador

10. Why the BRICS Summit in Kazan should be a Wake-up Call for the EU

Author:
Reinhold Brender
Publication Date:
11-2024
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
This policy brief examines the growing influence of the BRICS in a multipolar world, as highlighted by their recent summit in Kazan, Russia, and the challenges to effective global multilateralism. Originally comprising Brazil, Russia, India, China, and later South Africa, the BRICS have recently expanded to include Ethiopia, Egypt, the UAE, and Iran. All BRICS members seek to reshape global governance to provide a greater voice for the Global South and strengthen South-South cooperation. However, internal divisions persist: China, Russia, and Iran view the BRICS as a platform to counter Western influence, while India, Brazil, and South Africa pursue ‘multi-alignment’ to diversify their global partnerships. This brief argues that, given the urgency of pressing global challenges, the EU should take the Kazan Summit as a wake-up call to develop and implement a strategy for engaging the Global South in the much-needed reform of global multilateralism. This effort is essential despite the reelection of Donald Trump as US President.
Topic:
Foreign Policy, Economics, European Union, Multilateralism, BRICS, and Strategic Partnerships
Political Geography:
Europe, Latin America, North Africa, and Asia-Pacific

11. Driving Change: How EVs Are Reshaping China’s Economic Relationship with Latin America

Author:
Ilaria Mazzocco, Ryan C. Berg, and Rubi Bledsoe
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
Countries in Latin America and the Caribbean (LAC) are navigating a new geopolitical moment. Some LAC countries are benefitting from increased access to low-cost, high-quality electric vehicles (EVs) and new investment throughout the value chain from China that can help meet governments’ climate and economic objectives. However, this comes with risks, as dependencies on Beijing may be exacerbated at a time when China’s economy is underperforming and geopolitical competition with the United States is on the rise. Washington should find new ways to engage with the region to find solutions that address local demands and simultaneously mitigate U.S. geopolitical risk.
Topic:
Global Markets, Economy, Innovation, and Electric Vehicles
Political Geography:
China, Asia, and Latin America

12. Service Market Opening in Latin America and Its Effect on the Region's Manufacturing GVCs

Author:
Sungwoo Hong
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Due to the accelerating digital transformation in the post-COVID-19 world, the share of service trade in the economies of major countries worldwide is expected to increase further. Services and participation in the global value chain (GVC) are closely related because services serve as a significant input factor in the manufacturing sector. The recent movement to open the service market in Latin American countries has an inherent policy goal of enhancing participation in the GVC centered on the manufacturing industry by facilitating the introduction of services within and outside the region in product trade. Korea’s exports are still concentrated on the trade of manufacturing-centered products, and improving competitiveness in the service sector is a challenge. In a situation where Korea's exports to the world are sluggish due to the spread of protectionism and delayed global economic recovery, the Korean government and companies need to move away from the traditional Korea-Latin America cooperation model that was focused on manufacturing-oriented product trade. In addition, they need to expand service trade and create new solutions in the service sector. Therefore, against this background, it is essential to understand the level of service market openness in major Latin American countries, provide information to governments and companies, and provide the logic for economic cooperation between Korea and Latin America in the service sector. This report briefly shows the status of service market opening in major countries in Lain America and empirical findings of relationships between service market opening and manufacturing GVCs of Latin America. As a result of reviewing the domestic laws of MERCOSUR and the Pacific Alliance in Latin America, the level of regulation on investment in the service sector has been lowered due to the past active policy of attracting foreign direct investment except for some cases. However, the level of service concessions in these countries was significantly lower than the level of investment liberalization based on domestic law. As a result of the empirical analysis, I found that when Latin American countries signed a bilateral service trade agreement with a Global North country, the agreement significantly strengthened the backward linkages of Latin American exporting countries. Among Latin American countries, when a country in the Global North concluded a service trade agreement with a Global North country, forward linkages of Latin American exporting countries also increased.
Topic:
Markets, Manufacturing, Trade, and Service Marketing
Political Geography:
South America and Latin America

13. The shift from party to personality politics is harming Latin American democracies

Author:
Christine Zaino and Sofia Herrera
Publication Date:
11-2024
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Across Latin America and the Caribbean, personality-driven political movements and political outsiders are increasingly prevalent, often at the expense of party-based politics. A theme of recent elections in the region has been a widespread embrace of political figures and movements vowing to upend the status quo. From Ecuador to Argentina to Guatemala, political outsiders have unseated the establishment. Meanwhile, recently formed, ideologically vague political movements in Mexico and El Salvador overtook the traditional parties that they broke away from to win landslide elections. With few exceptions, the region has failed to develop competitive, institutionalized, and programmatic parties. This breakdown in party systems and proliferation of personality-driven movements has not delivered better results. Improving institutionalized competition among programmatic, ideologically distinct, and identifiable parties would bolster Latin American democracy, delivering citizens freedom and prosperity. Within the past decade, several countries with once seemingly institutionalized party systems, such as El Salvador and Mexico, collapsed as parties lost their grip on power to personality-driven figures and movements. Others, like Ecuador and Guatemala, have systems that appear to provide a wide variety of options to citizens through a great proliferation of parties. These systems are unpredictable to citizens, and parties are unable to develop the structure, ideology, and institutionality necessary to deliver solutions to citizen’s needs. This piece examines how political parties across four Latin American countries in two types of systems have failed to serve as effective vehicles for delivering democracy, and what must change for parties in the region to succeed. We examine the breakdown of the formerly institutionalized party systems in Mexico and El Salvador, and the persistently weak parties in Guatemala and Ecuador. Each country’s experience illustrates how a lack of programmatic parties has contributed to poor governance, which fails to adequately deliver essential services to citizens, potentially undermining democracy and the freedom it should deliver. For each case, we reference data from the Atlantic Council Freedom and Prosperity Indexes and other sources to illustrate the critical role of parties in advancing democracy.
Topic:
Politics, Reform, Elections, and Democratic Transitions
Political Geography:
Latin America and Mexico

14. Is the European Union Deforestation Regulation WTO-Proof?

Author:
Bruno Capuzzi
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The European Union Deforestation Regulation (EUDR) is set to take effect on 30th December 2024. While it aligns with EU’s climate goals under the European Green Deal, it has sparked concerns with EU partners regarding its compatibility with World Trade Organization (WTO) principles. Internally, some member-States and productive sectors fear that the lack of clarity in its rules could disrupt European supply chains. Products like coffee, chocolate, and leather are some examples where costs and price are expected to rise due to compliance requirements, documentation, and shipment segregation. Critics argue that the EUDR’s unilateral imposition of EU standards on third countries could be viewed as extraterritorial and more restrictive than necessary towards its objectives. This paper analyses lessons from WTO reports on US Shrimp/Turtle and US Tuna/Dolphin, which are relevant to discussions on non-product-related processes and production methods (PPMs). Key findings suggest that the EUDR could be justified under GATT exceptions clause (Article XX). However, for this to be successful, the Policy Brief proposes more flexibility in considering local realities of exporting countries. This would include shifting the EUDR approach to cooperating towards an outcome-based equivalence systems instead of rigid procedural requirements.
Topic:
Agriculture, European Union, Trade, WTO, Deforestation, and Mercosur
Political Geography:
Europe and Latin America

15. A post-Western global order in the making? Foreign policy goals of India, Turkey, Brazil and South Africa

Author:
Sinikukka Saari, Toni Alaranta, Bart Gaens, Katariina Mustasilta, and Lauri Tahtinen
Publication Date:
10-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
India, Turkey, Brazil and South Africa are striving for a more multipolar, post-Western world order in which they would not be seen merely as auxiliary powers to the bigger players, but as independent great powers. For them, a key foreign policy goal is to transform global governance institutions. They all call for a permanent seat for their country on the UN Security Council. To achieve that, the states need backing from more than the Western states – and this logically strengthens the multi-aligned logic of their foreign policies. India, Turkey, Brazil and South Africa see Russia’s war of aggression in Ukraine and the Western countermeasures from their own perspective. They describe Russia’s invasion as a violation of international law, but see the war primarily as a Western concern, not theirs. Although these states are critical towards the West, they are not anti-Western and they all value multilateral institutions; their foreign policy goals and features offer opportunities for the EU to engage with them, but that needs to happen on a more equal footing than what has traditionally been the case.
Topic:
Foreign Policy, UN Security Council, Multipolarity, International Order, and Russia-Ukraine War
Political Geography:
Africa, Turkey, India, Asia, Brazil, and Latin America

16. Mexico’s domestic decay: Implications for the United States and Europe

Author:
Lauri Tahtinen
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
President Andrés Manuel López Obrador (AMLO) has challenged Mexico’s democratic institutions, including the electoral commission INE, and relies on the military to run sectors of the economy and to provide internal security. Recognizing the continuing strategic importance of its southern neighbor, the United States is attempting to “friend-shore” American industry to Mexico despite trade disputes. Mexico’s economic convergence with the US is giving way to ideological divergence. In the past year, Mexico has called NATO’s stance on Ukraine “immoral” and openly aligned with the leftist, anti-US dictators of Cuba, Nicaragua, and Venezuela. Mexico’s internal development and shifting external stance could spark a return to a United States focused on the protection of its 19th-century borders instead of its 20th-century global footprint. European attention to the future of Mexico can help diversify the country’s trade and other partnerships, as well as shine a light on its democratic decay.
Topic:
Security, Defense Policy, Democracy, Europe, and Economic Policy
Political Geography:
Europe, Latin America, North America, Mexico, and United States of America

17. Monetary policy in Latin America: The easing cycle has begun

Author:
Alejandro Werner
Publication Date:
11-2023
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Latin America’s central banks acted promptly and decisively to contain the medium-term consequences of the global inflation shock. Since then, however, headline and core inflation have come down within the region, real growth has slowed, and the US Federal Reserve appears to have settled on a (however brief) pause of its own tightening cycle. Werner says the time has come for a gradual return to looser financial conditions in Latin America. Brazil, Chile, and Peru have already started the process of cutting rates, and there seems to be significant space to continue; Mexico should follow, with Colombia waiting for more clear signals.
Topic:
Monetary Policy, Inflation, Interest Rates, and Central Bank
Political Geography:
Latin America

18. A shared EU-US economic agenda for the world: Engagement as an imperative

Author:
Lauri Tähtinen
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
It is time for the European Union and the United States to build a shared, positive economic agenda towards third countries. Such an agenda would build upon the bilateral relationship but not focus on it. It would still be shared, even if the parties may have distinct reasons for supporting different aspects of it. The first elements of a shared economic agenda are evident in the EU-US Trade and Technology Council projects for Jamaica and Kenya. However, the political window for further alignment between the US and the EU, as well as for European trade deals, may be closing in 2024. Future initiatives should take into account major economies such as Brazil, Mexico, and Indonesia. The entry into force of the EU-Mercosur agreement should be a high-level priority for both Washington and Brussels. The current state of the EU-US relationship is characterized by a divergence in technology, industrial policy, and environmental policy. To move onto a path of convergence, Washington must reassess its exaggerated fears regarding the regulatory power of the EU, and use the spread of European standards as a means towards shared ends.
Topic:
Environment, Industrial Policy, Science and Technology, Bilateral Relations, European Union, and Economic Policy
Political Geography:
Europe, Latin America, and United States of America

19. The Resilience and Sustainability Trust: Early Learning and Challenges from Costa Rica and Rwanda

Author:
Andrew Wainer
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
In 2022, as part of the IMF’s recent efforts to re-channel Special Drawing Rights, it created the Resilience and Sustainability Trust (RST), facilitating the transfer of concessional finance from high- to lower-income countries for climate resilience and pandemic preparedness. It is the first new such facility following the polycrises of the early 2020s. Demand for the RST is strong and learning from its pilots can inform how future RST financing can be used most effectively. This research provides case studies of two RST pilots: Costa Rica and Rwanda. Lessons from the pilots are not only relevant for future RST recipients. The RST is operational, and therefore, uniquely worthy of analysis in terms of how additional financing—above and beyond the RST—can be effectively integrated. Our analysis finds that the RST is becoming the IMF’s de facto climate finance facility; is government-driven; is being awarded to countries with strong governance and climate credentials; and that authorities are banking on using the RST to attract additional climate finance. At the same time, the RST faces the challenges of being too small to confront climate resilience; has questionable priorities in terms of supporting climate over poverty reduction in low-income countries; is almost tripling the number of IMF program conditions some countries are facing; and is escalating IMF policy influence over governments in an area where the IMF has limited experiences.
Topic:
International Monetary Fund, Finance, Sustainability, Resilience, COVID-19, and Sustainable Development
Political Geography:
Africa, Latin America, Rwanda, and Costa Rica

20. Forest-Based Carbon Markets: Pitfalls and Opportunities

Author:
Julián Cárdenas and Juan Jose Guzman Ayala
Publication Date:
11-2023
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Forest-based carbon markets could become an important source of income for countries in Africa, Latin America and Asia-Pacific. Estimates indicate that under a high carbon prices scenario, the value of the forest-based carbon credit market could increase from US$1.3 billion in 2021 to US$25 billion per year by 2030. Apart from the climate and monetary benefits, forest based carbon markets also have pitfalls that must be avoided. Without the right institutions in place, at the national and local level, forest projects can generate negative externalities, such as population displacement, increases in food prices, and biodiversity degradation. The value chain in carbon credits involves a number of high value-added upstream and downstream activities that tend to take place outside the countries where the projects are located. Industrial policies are required for host countries to receive a higher share of the revenue stream, including in areas such as structuring, monitoring, verification, and surveillance. Countries need to promote actions in labor training, research and development, and access to long-term capital. The paper proposes the creation National Carbon Federations as institutions to resolve several market failures, while preventing conflict, ensuring adequate savings of the additional income, and strengthen democratic governance. These organizations can also provide key public goods, so that local communities benefit from the development of carbon credits from tropical forests.
Topic:
Climate Change, Environment, Climate Finance, Forests, and Carbon Markets
Political Geography:
Latin America