April-June 2013Year 5, No. 2

4th Annual Event of Latinports in Cancun

Controversial Presidential Sanction of the Reform to the Law of Ports in Brazil

Principal Containers Ports in Latin America

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RICHARD KLIEN: LATINPORT’S CHAIRMAN 2009-2013

CONTENTSCONTENTSAprilJune

2013

Editorial

CoverRichard Klien: Outgoing Chairman 2009-2013 and Principal Promoter of Latinports

DesignJulian Pinedawww.miroamarillo.comstudio@miroamarillo.com

- Controversial Presidential Sanction of the Reform to the Law of Ports in Brazil

ANALYSIS

- The Principal Containers Ports in Latin America in 2012

- Latin America must have a Long-term Vision to Position Itself as the Region of the Future

- Chile and Panama Consolidate as Latin American Leaders in Competitiveness

LOGISTICS, COMPETITIVENESS AND PORTS IN LATIN AMERICA

4TH ANNUAL EVENT OF LATINPORTS - Infrastructure and Development

CHAIRMAN AND EXECUTIVE DIRECTION OF LATINPORTS

- Outgoing Chairman and Executive Director Meet in Rio de Janeiro

- Executive Director Meets with General Director of Antaq in Brasilia

- Executive Director Visits Liebherr and e-Tech Simulation Plants in Miami

- “Latin America is in a Unique Moment”: Joe Biden, Vice-president of the United States

- “Latin America enters a ‘Golden Age’: Xi Jinping, President of China

- China Would Replace the EU in 2015 as Second Investor in Latin America

LATIN AMERICA AND THE WORLD: MACROECONOMIC SITUATION OF THE REGION

April - June 2013CONTENTSCONTENTS

LATIN AMERICAN PORT NEWS

Mail

WATERWAYS IN LATIN AMERICA

- The Government of Brazil Studies Strengthening the Mode of Waterways by Freeing It

- In its Final Stage Tender to Deepen Upstream Waters of the Magdalena River in Colombia

- Compañía Sur Americana de Vapores Foresees a “Complex Scenario” for the Shipping Industry

- Hapag-Lloyd and Hamburg Süd Stop Merger Conversations

- MSC Negotiates 35% of its Terminal Division for US$2 Billions

MARITIME TRANSPORTATION AND PORTS

- Brazilian Roberto Azevedo: Next Director of the World Trade Organization

- Mexico and United States Committed to Create the Most Competitive Region of the World

- BRICS Committed to Implement the Bank of Development

- The Pacific Alliance Constituted as the Main Commercial Block of the Region

- OECD Invites Colombia to Negotiate its Accession to the Group

LATIN AMERICA AND INTERNATIONAL TRADE AGREEMENTS

UPCOMING EVENTS

- TOC CSC Américas 2013

April - June 2013

EditorialIn a demonstration of Latin American integration we developed with the greatest success our fourth annual event in Cancun, Mexico, jointly with the Association of Terminals and Port Operators of Mexico and the Mexican Association of Port Engineering, to which from this space we send our warmest appreciation. The message of the President of the Republic, Enrique Peña Nieto, transmitted by the General Coordinator of Ports and Merchant Marine, Guillermo Ruiz de Teresa, stating “it is the interest of the Mexican government to work very closely, both internally as externally, with the associations organizing the event”. This event, with the motto of Infrastructure and Development, served to demonstrate that although a lot has been done in the first 20 years of the port reforms in Latin America, there is still much to be done. Under this focus important conclusions were reached reflected in the Declaration of Cancun. Full text of the declaration appears on inside pages.

The event of Cancun concurred with the fulfillment of a crucial cycle in Latinports, under the leadership of its outgoing Chairman, Richard Klien from Brazil, during which time the association has consolidated as the spokesman of the Latin American port sector, and with this commitment has promoted the benefits of the “winning model: public ports and private operation”, as was so rightly defined by him. A new cycle is now starting, that of “the modification of laws to adapt them to the current situation of the industry and the public-private associations”, as described by the incoming Chairman, Arturo López, who as one of the most important Latin American port entrepreneurs, is a guarantee of continuity and projection. In good time the outgoing and incoming chairman have committed to work very closely to strengthen the association.

In this issue we make special emphasis on the excellent time now lived in Latin America, which we must exploit. It is with great pride we listen from the representatives of the two main economies of the world phrases such as “Latin America is in a Unique Moment” (Joe Biden, Vice-president of the United States) and “Latin America enters a Golden Age” (Xi Jinping, president of China). And even more, a representative of the region, the Brazilian Roberto Azevedo, was appointed as president of the World Trade Organization. We must then rapidly prepare to be in agreement with the circumstances and profit the most of this, as urged by the International Monetary Fund, “Latin America must profit of the bonanza as it will not last forever”. This is a huge challenge.

Until the next!

Julian Palacio, Executive Director

of Latinports

April - June 2013

4TH ANNUAL EVENT OF LATINPORTS IN CANCUN INFRAESTRUCTURE AND DEVELOPMENT

Guillermo Ruiz de Teresa, General Coordinator of Ports and Merchant Marine of Mexico

Opened by the General Coordinator of Ports and Merchant Marine of Mexico, Guillermo Ruiz de Teresa, the event jointly held by the Association of Terminals and Port Operators and the Mexican Association of Port Engineering was attended by more than 200 persons of Mexico and different countries of the region. The General Coordinator highlighted the message of the President of the Republic, Enrique Peña Nieto, showing the interest of the Mexican government of working very closely with Latinports.

The event revolved under the premise that during the 20 years of port reforms in Latin America “much has been done but also there is much yet to be done”, as rightly stated by Francisco Kassian, president for Mexico of the multinational port operation SAAM. On the other hand, the Executive

Director of Latinports, Julián Palacio, during the opening session, stated:“It is not only a formal issue the participation in this table of the General Coordinator of Ports, the presidents of two of the most important port associations of Mexico, and the Latin American Association of Ports and Terminals I represent. It is the demonstration that joint work of the public and private sectors, and the integration of the Latin American sector that although pursuing the same objectives of the ports of the world, have very particular characteristics.

“Some years ago in Cartagena, the minister of development of the former Spanish government said that ‘a port is of little use without a good internal transportation infrastructure’. Nothing could be truer. Consequences of a deficient internal

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DECLARATION OF CANCUNMay 17, 2013

Conclusions of this meeting may be summarized in the sentence “much has been done in the region during the first 20 years of port reforms, but there is also much yet to be done”. Regarding specific activities, worth mentioning are the following:

World Market and Port Development:

The Pacific doubles the Atlantic in growth, and for this reason, and without neglecting the ports located on this ocean, works must be considerably done for the adequacy of the Pacific ports.

Multimodalism and Logistics:

Ports alone are not the only solution for foreign trade competitiveness; this is the line in which Latin American countries are well behind. For this reason Multimodalism and Logistics should work thoroughly and this must be the set point in the short-term, having in mind that logistic development brings forth economic development.

Transportation Infrastructure:

Although significant progress is noted, greater emphasis must be given to the different road transportation modes in order to reduce costs and increase efficiency, basically regarding homogeneous cargo volumes and long distances.

transportation infrastructure, an endemic problem of our countries, brings us to what I call ‘the frustration of the port manager’, as an excellent company with an excellent manager may make a port or terminal the best of the world, but internal transportation deficiency does not make of this the benefit the countries need for its foreign trade competitiveness. Our competitiveness worldwide is way far from what our potential requires.

“Thus, I agree with the new General Coordinator of Ports, Mr. Guillermo Ruiz de Teresa, with whom I had the honor to speak a few days after he entered office, on the matter that his management would be based on port productivity and connectivity. Also, Latinports bases its existence in what its slogan states: ‘Government and Private Sector Working Together for Port Logistics Development within the Region’.

“I want to hereby refer to the great moment now being lived by Latin American economies, and particularly by that of Mexico. Increasingly more the eyes of the world are focused on our region for as stated by the Minister of Transportation of Chile at our event last year in Viña del Mar: ‘I am very proud that while the world is undergoing a very serious crisis, Latin America is not only supporting it but continues to grow’.

“Therefore we must be prepared for what comes next. This is the best time of Latin America and we must benefit of it. Multimodality and Logistics must be the motto”.

Conferences of the Latinports module you can refer to them in the link events from our website www.latinports.org

April - June 2013

Arturo López Takes Office as Chairman of Latinports

Areas of Logistics Activities:

To improve competitiveness of the countries, the areas of interior logistics activities or dry ports, these should be an important complement of ports and connectivity.

Public-Private Relationships:

Public and private sectors understand ever more the importance of working together towards a common purpose, and worth noting are the expressions of President Enrique Peña Nieto through the General Coordinator of Ports and Merchant Marine, in the sense of the interest of the Mexican government to work closely, both in the internal and external

fields, with the Association of Terminals and Port Operators, the Mexican Association of Maritime, Coast and Port Infrastructure, and the Association of Latin American Ports and Terminals, the entities that organized the event held in Cancun.

Situation in Particular:

Mexican economic growth is outstanding worldwide, as well as the positioning of its principal ports that according to ECLAC has the same level of efficiency as the best ports of the world.

The General Coordinator of Ports and Merchant Marine of Mexico, Guillermo Ruiz de Teresa (in the middle of the main table), takes the oath to Arturo López of Mexico as new Chairman of Latinports, who is accompanied by the executive director of the association, Julián Palacio

April - June 2013

CONTROVERSIAL PRESIDENTIARY SANCTION OF THE REFORM TO THE LAW OF PORTS IN BRAZIL

The President of Brazil, Dilma Rousseff, enacted the law of ports the beginning of June to facilitate unblocking investments for almost 13 billion dollars in tenders foreseen for this year, informed Mundo Marítimo that received the news from Reuters, although ten articles of the document approved by Congress were vetoed, largely contrary in great part to the entrepreneurial lobbies put forth along the procedures of MP 595. “We made vetoes to assure the main objective of the measure, the opening and competitiveness of the port system and also to eliminate any legal insecurity regarding text interpretation”, said the cabinet chief minister, Gleisi Hoffmann, when she commented the decision made by the president.

According to the minister, approval of the law created conditions for the government to take measures in several sectors, including the tender for 52 areas of the ports of Santos, the principal of Brazil, and in the state of Pará. Until January 2014, the Government wants to implement the tender for the last block of port leasing, including another 107 port areas in the south, the southeast and the northeast of the country.

Below are the principal points vetoed that have been controversial:- Creation of the industry terminal category;- Prohibiting sea navigation companies to

operate terminals;- Mandatory use of OGMO (Managing Body

for Labor, in Spanish) to contract integrated workers;

- Extension of concessions at dry docks;- Requirement that concession contracts have a

maximum term of 50 years;- Surveillance of ports only in charge of the

guard of ports;- Article requiring professional qualification of

independent port workers;- Elements in charge of renewal of leasing

contracts entered into prior to 1993;- Elements allowing the extension of leasing

entered into after 1993.

Meanwhile, Nuestro Mar Foundation, quoting Valor and Portos e Navíos, explained that by means of the vetoes the government closed the doors to an automatic extension of any type of leasing contract for public ports, including at least 54 terminals leased prior to 1993. In said year entered in force the last regulatory framework of the sector, derogated by MP 595. Operators of these facilities were in general looking for a ten-year renewal of the contracts. The heads of containers terminals tendered after 1993 also lost the extension guarantee of their contracts that expire just in the next decade. Vetoes open the way to lease 159 areas at public ports that will be divided in four lots. The first round of tenders, including 52 terminals located in Santos and Pará, must be specified in October. The other tenders will be launched prior to January 2014, as stated yesterday by the Minister of the Civil House, Gleisi Hoffmann.

The government also raised its investment estimates in private ports. In December, the Secretary’s Office of Ports spoke of projects for the amount of R$21 billions until 2017. Now, forecasts refer to investments of R$ 25 billion,

April - June 2013

according to the Minister. “These are preliminary numbers”, stated the minister, recalling that part of the projects of private terminals with requests submitted to the National Water Transportation Agency (Antaq) do not have precise data.

With the new law the difference between own cargo and third-party cargo is terminated, thus facilitating the construction of private ports. President Rousseff vetoed, in the meantime, the figure of “industrial terminal” – a case whose leader is the entrepreneur Jorge Gerdau. Large companies such as Vale and the same Gerdau, using port facilities as the last point of their productive chains, would like having the possibility of building new terminals without a process of selection that involves public calls. “Returning to the restriction on type of cargo to be moved at each port terminal becomes an obstacle to an ample opening of the sector and to the increase of competition, basic objectives of the MP”, as was justified by the Ministry of the Treasury, the Ministry of Planning and the Secretary’s Office of Ports, when explaining the veto.

Minister Hoffmann explained that the regulation of the new law will be done in two parts. The first, the government will present details of the selection process for the construction of private ports. Afterwards, specific matters of port workers will be regulated. “All agreements entered into with the National Congress, either with workers, or within the scope of a mixed commission, were complied with”, stated the Minister. Among the vetoes related to labor matters, there is one determining that supervision and security of public ports will be exclusively executed by the ports guard.

Besides, to prevent that the logic of Manpower Management Bodies (Ogmos, in Spanish) were

mandatorily adopted by private terminals, the president vetoed part of the law that established that independent workers could only exercise their activities if registered in the list of ports, managed by Ogmos.

In order to justify these vetoes, the government alleges that changes would violate the agreement negotiated between the Executive Power, the National Congress and the entities representing port workers. Legislators quickly reacted. “We will vote the vetoes. The President has the right to veto and us to evaluate the vetoes. During the meeting of chiefs of the bench of representatives it was already discussed to have a meeting with the President of the Senate to consider the proposal for the evaluation of vetoes”, stated the leader of the PMDB, Eduardo Cunha (RJ), who was one of the principal negotiators of the text during the proceedings for the provisional measure (MP, in Spanish). For Cunha, the evaluation of the vetoes is a “self-affirmation of Congress”, and an indication that the Government “must have more responsibility”. “They (the Government) have to be more responsible with the contents of approved matters. They have to understand that when votes are cast, in case of veto, it must be evaluated”. Cunha also refuted the declarations of Minister Gleisi Hoffmann and stated that the government vetoed parts of the Provisional Measure (MP) where the agreement had been reached: “The agreement with me was obviously not complied with”. An amendment of its authorship – that included the possibility of renewing contracts prior to 1993 – was vetoed.

April - June 2013

CHAIRMAN AND EXECUTIVE DIRECTION OF LATINPORTS

Richard Klien, Chairman, and Julian Palacio, Executive Director

Former Minister Pedro Brito, General Director of Antaq

Last April met in Rio de Janeiro the outgoing Chairman of Latinports, Richard Klien, and the Executive Director, Julián Palacio, to make an evaluation of the first four years of the association and plan its future.

Also in April, the Executive Director of Latinports met with the former Minister of Ports of Brazil and current General Director of the National Sea Transportation Agency, Pedro Brito, with the purpose of strengthening relationships between the two entities.

Executive Director Visits Plants of its Affiliates Liebherr and E-Tech Simulation in Miami

Upon a kind invitation of Liebherr Nenzing of Austria, the Executive Director of Latinports, Julián Palacio, visited Miami to get acquainted with the last technological advances of its port equipment. He took the opportunity to visit E-Tech Simulation, complementary company dedicated to manufacture training simulators to handle this type of equipment. Below is a review of these important visits:

Under the motto “Meet Diversity and Innovation” Liebherr celebrated on June 11, 2013 the grand opening of its new sales and service center in Miami. The ceremony was attended by more than 300 invited customers and guests.

Outgoing Chairman and Executive Director Meet in Rio de Janeiro

Executive Director Meets with the General Director of ANTAQ in Brasilia

New Sales and Services Center of Liebherr

April - June 2013

Leopold Berthold, Managing Director of Maritime Division of Liebherr, with Executive Director of Latinports, Julian Palacio

In terms of logistics, the sales and service center is ideally located: the port of Miami and Miami International Airport are in close proximity to the new site. This allows Liebherr to respond to customer enquiries within a short time and to accelerate the distribution of parts and services. In 2013 about 52 staff members will be working in this new facility. The new sales and service center could be completed only 15 months after groundbreaking. The total investment sum for the building was approximately $20 million. “The new facility perfectly meets the requirements to further improve our sales and service performance in both North and Latin America”, emphasized Gernot Schranz, president of Liebherr Nenzing Crane Co.

Another important point that favored the construction of new facilities in Miami is Liebherr’s continuous success in Latin America. In 2011 and 2012 alone, more than 30 Liebherr Mobile Harbor Cranes have been delivered. In 2013, customers in Latin America have already ordered six LHMs to boost their port operation capabilities.

Lázaro Cárdenas Multipurpose Terminal S.A. de C.V. has ordered two LHM 600s. The Hutchison Port Holdings affiliate is located on Mexico’s Pacific coast. Each crane is equipped with a 104t winch and will mainly be used in handling containers and bulk cargo. Another LHM 600 has start operation in Mexico. Terminal Internacional de Manzanillo S.A. de C.V. (TIMSA) opted for Liebherr’s strongest mobile harbor crane. TIMSA is a multipurpose terminal. Montecon S.A. started operation at the Port of Montevideo in 2000. Since then, their Liebherr mobile harbor crane fleet has steadily grown. In 2013, Montecon S.A. will receive two mighty LHM 600s.

The 2013 year looks to be the most successful year in history regarding LHM deliveries to Mexico thanks in part to the order of three LHM 600 cranes. Generally, Liebherr is optimistic that 2013

is going to be another very strong year in Latin America.

The new sales and service center also focuses on training. Equipped with the LiSIM® training simulator, professional crane driver training is available in Miami. Based on state-of-the-art technology, simulator-based training allows for increased productivity and safety while training costs are minimized. The installation of original Liebherr drive systems, software and hardware guarantees a realistic training experience. The drive systems reproduce all crane movements exactly both in space and in real-time. The sophisticated LiSIM® environmental and physics engine allows for an unprecedented level of detail and realism.

The new sales and service center also focuses on training. Equipped with the LiSIM® training simulator, professional crane driver training is available in Miami. Based on state-of-the-art technology, simulator-based training allows for increased productivity and safety while training costs are minimized. The installation of original Liebherr drive systems, software and hardware guarantees a realistic training experience. The drive systems reproduce all crane movements exactly both in space and in real-time. The sophisticated

April - June 2013

Operation Simulators Equipment

The story began several years ago when e-Tech Simulation, a USA company with offices in 13 countries, launched some of the most advanced and cost effective simulators in the market. Starting with port equipment simulators and then expanding to provide simulators to several industries such as construction, transportation,

LiSIM® environmental and physics engine allows for an unprecedented level of detail and realism.

A major benefit of simulator training is the ability to simulate harsh environmental conditions when required. This allows both experienced operators and trainees to gain valuable experience operating under challenging conditions. Thanks to the virtual environment, damage to maritime equipment and injuries to personnel are eliminated. The resulting increase in operator skills allows for safe and productive crane operation under similar conditions in the real world

For more information, visit www.liebherr.com

mining, oil and gas among others, e-Tech has quickly become the preferred one-stop simulation solutions supplier in the Americas.

Having developed a pyramid -shift concept, e-Tech not only designs and produces the most advanced simulators but it also provides turnkey solutions the company calls DIESeL (Dynamic Instructional and Educational Simulation e-Lab). “Based on our clients’ needs, each DIESeL solution is designed for areas and spaces that reflect the required circulation flow to reach training objectives; furthermore, match methodology and curricula developed specially for the client” Says Jairo Leiva, the company’s President. A DIESeL solution was precisely what e-Tech installed in Panama, the largest logistic hub in Latin America.

Inaugurated in April 2012, the port operator simulation center is located on Panama’s Pacific area and it’s managed by INADEH, the country’s main technical training institution that trains over 63 thousand students every year. With four STS, three RTG, one Mobile Harbor Crane, one Reach Stacker, and three Forklifts simulators, the 10,000 square foot center includes auditorium, library, cafeteria, office spaces and it became the largest simulation center in the Americas.

But e-Tech’s success does not end there; the company has developed other DIESeL solutions and provided simulators to several customers distributed in many countries. Among them there are the Port of Santos in Brazil, which it is serviced through the company’s strategic partner in Brazil, INCATEP. This highly referenced professional center has trained and certified more than 15,000 students using e-Tech’s simulators.

Other e-Tech port related customers includes but are not limited to CONTECON in Ecuador, TECPLATA in Argentina, CONTECON in

April - June 2013

Mexico, World Shipping School in Brazil, TRP in Argentina, TC BUEN in Colombia, Bolipuertos in Venezuela, and Three National Apprenticeship Service (SENA in Spanish) Regionals in Colombia serving the ports of Buenaventura, Cartagena, and Barranquilla.

The company has many other simulation solutions in other industries. Customers interested in e-Tech products could visit the various showrooms of West Palm Beach (Headquarters), Colombia, Ecuador, Venezuela, Brazil and Peru.

For more information, visitwww.etechsimulation.com

April - June 2013

moved 261 billion dollars, is “a fraction” of the 834 billion dollars reached with the exchange of Latin America and the United States that same year. He also considered that the new relationship between China and Latin America may be beneficial for the region. “The economic bonds of Latin America with China may have a positive role in the construction of a more prosperous and globalized society”, he pointed out.

In the particular case of Brazil, Biden said that the interests go beyond the commercial and economic bonds that the United States wishes to tighten even more. “Brazil is today an influential member of many multilateral institutions and we want to work with them and with the leaders of our hemisphere that are assuming greater global responsibilities”, he stated. Regarding commercial exchange that last year amounted to almost 60 billion dollars, Biden declared that the United States expects to give it greater depth and quality by increasing the acquisition of manufactured Brazilian products, which currently represent almost two thirds of bilateral trade.

“Latin America lives a unique moment and has a reliable partner in the United States”, affirmed the vice-president of the North American country, Joe Biden. According to CNN Expansion, the democrat valued the programs fighting poverty in many Latin American countries and highlighted that the region has adopted “economic promotion policies” that have contributed to the “recovery of global economy”.

In an interview published by the Brazilian magazine Veja, Biden stated that “in the last 15 years, 56 million Latin American and Caribbean families have joined the middle class, which now has 275 million persons”, and added that “All this has reinforced the relevance of the region worldwide”. Biden denied that the United States is in decadence and rejected that the strong penetration of China in Latin American countries responds to a U.S. omission. “The commercial and investment relationship of China with Latin America and the Caribbean reflects the emerging global importance of the region”, he assured. He further pointed out that the trade of the region with China, that in 2012

“LATIN AMERICA IN A UNIQUE MOMENT”: JOE BIDEN, VICE-PRESIDENT OF THE UNITED STATES

April - June 2013

Latin Business Chronicle with Information from La Prensa/AFP, the president of China, Xi Jinping, assured that Latin America is entering to a new “golden age” and summoned to deepen the commercial bonds with his country, in a speech before the Mexican Senate during his State Visit to that country. “The new contact with this continent, full of dynamics and hope, secures my perception that Latin America has incomparable conditions in favor of its development, the same that are becoming another golden age for Latin American development”, affirmed the Chinese president in his recent visit to Mexico. Beijing has encouraged an active commercial and investment policy during the past years in Latin America to assure provisioning the commodities required for its rapid growth and gain geopolitical influence with the United States.

Xi expressed his confidence that Chinese economy, the second of the world, will maintain a “relative quick” rhythm of development and called to deepen even more the relationships with Latin America. The president offered some

figures to demonstrate the great leadership which will continue having the Asian giant in the world economy: China “will invest abroad more than 500 billion dollars in the next five years”, stated the president, who estimated that the citizens of his country will make 400 million trips abroad during that period of time.

During his visit to Mexico, the second economy of the region after Brazil, Xi agreed with his peer Enrique Peña Nieto of bringing the bilateral relationship to an integral strategic association. Within the framework of the new phase of the relationships, Xi called for a consultation to face common challenges in opposition to the obstacles to world free trade. “It is necessary to jointly condemn protectionism and persist in dialogue and consultation to resolve economic-commercial issues”, affirmed the president. Xi also requested that the relationship with Mexico complies with “mutual respect and confidence to demand comprehension and support in matters related to its respective vital interests”.

LATIN AMERICA ENTERS A “GOLDEN AGE”:XI JINPING, PRESIDENT OF CHINA

April - June 2013

considers the United States likewise. Even one of five persons consulted believes China is already the most influential country, ahead of Japan, India and the United States.

Chinese Secret

Liu Kang, professor of Chinese Cultural Studies of the Department of Asian Studies and director of the Research Center on China of the University of Duke explained to El País that the success of China in the region is due to its lack of political intromission. What he calls “pragmatic diplomacy” has allowed that investments in Latin America and the Caribbean are not based on ideology. This policy has become more efficient than that used in the Middle East of Africa. For example, Kang said that its commercial relationships with some countries of the region do not depend on the recognition of Taiwan.

According to a report of Latin Business Chronicle based on a study of the Economic Commission for Latin America and the Caribbean (ECLAC), if there is something in common among the perspective of economic growth between China and Latin America it is the search for new markets. Therefore, the report states that the drive of Chinese investments in the region will displace the European Union towards 2015 as the second principal investor.

On the other hand, based on a report of El País, this economic influence would also be risky for the “privileged relationship” that Latin America still maintains with the United States. According to a survey of the Barómetro de Las developed by the University of Vanderbilt, this relationship with the Asian giant is seen with good eyes by Latin Americans. Thus, 68.2% of the citizens of the region see this presence in the economy as positive, while a minor percentage (62.2%)

CHINA WOULD REPLACE THE EUROPEAN UNION IN 2015 AS SECOND INVESTOR

IN LATIN AMERICA

April - June 2013

According to data of the Chinese Ministry of Commerce, Latin America is the second largest investment destination of the country, after Asia. In 2000, Peking invested US$10 billion in the region, in 2009 this figure was US$100 billion and two years later it was more than US$245 billion. These continuous increasing figures served as “cushion” against the impact of the economic recession of 2008 in Latin America,

according to the Woodrow Wilson Center.

Unites States Alert

The largest economy of North America addresses empirically the increasing weight of China. However, Washington alerts on the commercial practices of China, the conditions of its labor market – with a cheaper labor allowing reducing production costs – and the lack of guarantees on human rights. These appear as factors that favor the commercial relationship of emerging countries of the region with the U.S. for its political-economic affinity, than with Peking’s.

April - June 2013

Containers movement in the ports of Latin America and the Caribbean maintained a low dynamics in 2012 with a growth of 4.3% in 2012, which confirmed the deceleration of foreign trade for the region during last year, affected by the European recession and a lower growth in the United States

THE PRINCIPAL CONTAINERS PORTS IN LATIN AMERICA IN 2012

1 Colón (MIT, Evergreen, Panamá Ports), Panama 3.500.0002 Balboa, Panama 3.300.0003 Santos, Brazil 2.950.0004 Cartagena (Sociedad Portuária, Contecar, El Bosque), Colombia 2.200.0005 Manzanillo, Mexico 1.900.0006 Callao (DPW/APM), Peru 1.800.0007 Buenos Aires (Exolgan included), Argentina 1.650.0008 Guayaquil, Ecuador 1.500.0009 Lazaro Cárdenas, Mexico 1.250.00010 Caucedo, Dominican Republic 1.150.00011 San Antonio, Chile 1.050.00012 Limón-Moin, Costa Rica 1.050.00013 Valparaiso, Chile 950.00014 Buenaventura (Sociedad Portuária, TCBUEN and Grupo Portuario),

Colombia 850.000

15 Porto Cabello, Venezuela 850.000

and China. Port movement ranking of containers of Latin America and the Caribbean in 2010 grew 15.9%, rate that reduced to 13.9% in 2011. Below is the 2012 Ranking prepared by the Unit of Infrastructure Services of ECLAC in TEUs (round numbers):

April - June 2013

Principal Latin American Ports are Efficient Worlwide: Eclac

In accordance with the following graphic, belonging to recent study prepared by the Infrastructure Division of ECLAC and

presented first by its Chief Ricardo Sánchez in the port Conference held in Cancun, two ports of Mexico (of five studied), two of Chile (of three studied) and one in Colombia and Ecuador, have a productivity similar to the best in the world.

April - June 2013

Latin America should have long-term vision for its investment and savings programs, in order to position itself in the next 20 years as the region of the future at world level, stated the Latin American Development Bank (CAF) based on the report “Vision for Latin America 2040”, according to the news of the Latin Business Chronicle, quoting EFE.

“This report is a warning to all leaders of public and private institutions of Latin America so they wake up to the self-complacency in which they live, (thinking) we are doing well and will continue doing so, while in reality this is not

Colombia: The Country with the Highest Growth in Movement of Containers

While Colombia, Mexico and Peru are the three countries that increased most the movement of containers in Latin America during 2012,

with growths of 18%, 13% and 9% respectively, Argentina decreased 35%. The most dynamic ports in these countries were Cartagena and Buenaventura in Colombia; Callao in Peru; and Lázaro Cárdenas, Veracruz and Manzanillo in Mexico. According to a report of the Economic Commission for Latin America and the Caribbean (ECLAC), quoted by T21, although containers transportations maintained low dynamics, thus confirming the deceleration of foreign trade for the region during last year because of European recession and the lower growth in the United States and China, some countries of the region “seemed more immune to the deceleration of ports and maintained strong growth rates”.

LATIN AMERICA SHOULD HAVE LONG-TERM VISION TO POSITION ITSELF AS THE REGION OF THE FUTURE

the case”, stated to EFE the representative of CAF in Panama, Susana Pinilla, former Minister of Labor and Women of Peru, who last April presented in Panama an 800-page document prepared during two years by a group of international researchers at the request of the bank entity.

She emphasized that Latin America is the better endowed developing region of the world, with extensive areas of fertile land, lots of sun and abundant hydric resources, in contrast to most developing regions, among others, Africa, an important sector of Asia and the Middle East.

April - June 2013

However, details show how Latin America moved from being the “continent” with the greatest advantages worldwide by the end of the 70s to currently become an average region, in circumstances almost similar to Africa. It was also affirmed that Latin America at the beginning of the 80s started a stagnation process that made it lose its constant growing rhythm and its course as the most advanced and prosperous developing region.

Latin America will be the Main Exporter of Grain in the World

The Center of Economic Studies of the School of Mexico, Sidesa of Costa Rica, the Institute of Peruvian Studies (IEP, in Spanish), Rimisp of Chile and the Ceo/Forges Group of Argentina gathered a group of experts to analyze the possible scenarios and make offers and suggestions on how to face the challenges for agriculture to

She stated that Latin America represented in 1981 31% of the GDP of developing countries, average that fell to just 20% in 2009, whereas GDP of Brazil and Mexico was one third higher than that of India or China, a situation that changed drastically in 2009. This year – she stated – the gross domestic product of India was one third higher than Mexico’s, while China was 50% higher than all Latin America. She said that in 1980, Brazil and Mexico were the two largest emerging economies of the world and Latin America had four countries in the list of the 10 largest, whereas at present, the 10 largest emerging economies are in Asia.

Ms. Pinilla states that a much more thorough work is necessary, coherent and with longer duration State policies and that must, furthermore, be accompanied by the work and cooperation of the private sector. “A much greater effort must be done at investment and savings levels (…) and have a long-term vision that generates transformation with high technology that improves total competitiveness of factors, especially human capital”, she said. Also, she asserted that among recommendations worth noting is the need to improve education, above all technical education, to produce technology and not depend “exclusively” of the exports of commodities, and empower the region based on its natural, cultural and historical wealth.

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On the other hand, the report coordinator, Andrew Powell, principal adviser of the Research Department of the international organization, highlighted that “potential benefits of improving the use of resources are very significant” in the Latin American region. Among things that may be improved he emphasized the high labor informality that in Latin America reaches 56% of jobs, and the

contribute to development. Conclusion was that according to the IEP Latin America will be in the future the principal net exporter of food in the world as it has 30% of the water of the planet, which represents a privileged situation. For this reason agriculture resources will gain economic leadership within the region; the IEP added that Latin America is one of the only two regions with available lands for agriculture, although its complete use would require investments in infrastructure and technological development allowing its sustainable use, as informed by Latin Business Chronicle quoting the news from Gestión.

The study also shows that within the new international contexts, agricultural natural resources have an increasing economic importance and that development strategies for agriculture are gaining more and more leadership, thus an appropriate balance must be established between the different contributions development may do.

Latinports considers of the utmost importance the conclusions of this study as this will necessarily drive to give much more attention to the waterways of the region and to the connectivity of the river ports with production centers, as is being done by Brazil and somewhat late by Colombia (although better late than never).

Latin America Could Grow to Asian Levels

Latin Business Chronicle, quoting the economic paper Portafolio of Colombia and the EFE agency informed that according to the Inter-American Development Bank, Latin America

and Caribbean growth, currently around 4 percent, could reach levels close to that of Asian countries if structural economic reforms are applied to the labor market or to a greater investment in infrastructures. “The issue is there exists an opportunity which must be exploited so that Latin America grows 6% instead of 4%, as the Asian countries”, assured to EFE José Juan Ruiz, chief economist of the Inter-American Development Bank (IDB), after the presentation of the report, “Reframing Reforms: How Latin America and the Caribbean may Escape from the Lower World Growth”.

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International Monetary Fund Urges Latin America to Benefit of the Bonanza “That will not Last Forever”

The International Monetary Fund (IMF) urged Latin American economies to benefit of the external favorable conditions “that will not last forever” and to set the bases for a future “sustained growth”, informed Latin Business Chronicle quoting EFE. The Fund recommended in its new regional report that Latin American and Caribbean countries must redouble their macroeconomic defenses at a time in which a regional growth of 3.4% is expected for 2013 and 3.9% for 2014, driven by the abundance of funding and the robust demand for commodities.

low investment in infrastructures. Likewise, he explained that the fiscal and monetary space to take counter-cyclic measures is considerably lower to that existing before the crisis, and part of these reserves have already been consumed, therefore it is important to influence these structural reforms to revitalize growth.

Despite this positive environment, the report also advises of the mid-term risks resulting from a potential “hardening” of the world funding conditions and the possibility of a “strong deceleration at Asian emerging countries, with the relevant effects on prices of commodities”. “The conditions are still favorable but will not last forever”, stated in a communication the director for the Western Hemisphere of the IMF, Mexican Alejandro Werner, in Montevideo, where the report was officially presented. The executive of the Fund alerted on the signs that are beginning to show on price moderation of commodities, a trend that could intensify, and insisted that interest rates will increase as advanced economies improve.

In this study, the international organization warns that despite the general good economic situation of the region, there are different challenges regarding the particular economic structure of the countries. On one hand, places economies financially integrated into international markets of the region (Brazil, Chile, Colombia, Mexico, Peru and Uruguay) that according to forecasts will grow at a medium rate of 4.3% in 2013, and for “which is important to calibrate macroeconomic policies”. On the other hand, the international organization stated that Central American and Caribbean countries continue having high indebtedness levels and therefore must “consolidate their fiscal positions as soon as possible”.

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Eclac Reduces Growth Prediction for Latin America in 2013

According to Latin Business Chronicle, and quoting Reuters, the Economic Commission for Latin America and the Caribbean (ECLAC) slightly reduced growth forecast for the region in 3.6 and 3.7 percent for this year, from a 3.8 percent forecast in December, stated in Montevideo the beginning of April the executive secretary of the organization, Alicia Bárcena. “We believe that some countries will not reach the growth level we had expected”, stated Bárcena, and added that most probably the average figure of the region will finally be 3.6 percent. “We expect Argentina and Brazil to do better, but we are cautious in our forecasts as obviously what we clearly see is that Europe will continue in recession”, she stated, adding that Europe would show a 0.6 percent contraction of its Gross Domestic Product. “This is a great impact for us, above all in the commercial channel. Until we have clarity to where the global context is going, this continues being a very uncertain context”, assured the chief of ECLAC.

Peru will Lead the Economic Growth of South America in 2014

The International Monetary Fund in its report Economic Perspectives: The Americas, presented in May, stated this year the economic growth will be lead by Paraguay (11%), followed by far by Peru (5.5%). However, the IMF forecasted that Peru will be leader of the economic growth of South America in 2014, showing an advance of 6.1%, while Paraguay will decrease to 4.6%, to less than half the figure estimated for this year.

According to the report, Peru will end this year with the lowest inflation of South America (2.1%), followed by Colombia (2.4%) and Chile (3%). On the contrary, the highest inflation rates for this year will be reported by Venezuela (28%), Argentina (10.1%), Uruguay (7.8%), Guyana (6%), Brazil (5.5%) and Paraguay (5%). In 2014 Peru will remain the country with the lowest inflation of the region (2%). After Peru, South American economies that will grow the most next year are: Guyana (6%), Bolivia (5%), Chile (4.6%), Paraguay (4.6%), Colombia (4.5%), Surinam (4.5%), Brazil (4%) and Uruguay (4%). The countries reporting the lowest growth in the region are Venezuela (2.3%), Argentina (3.5%) and Ecuador (3.9%).

On the other hand, according to the investigation of Grant Thorton consulting, quoted by Gestión, during the first quarter of the year Peru was the world ranking leader on entrepreneurial optimism, followed by Philippines, United Arab Emirates, Mexico and Chile. For the first time none of the BRICs (Brazil, Russia, India and China) economies are among the first places.

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Chile and Panama are heading the Competitiveness Ranking of Latin America for third consecutive year, prepared biannually by the Institute of Competitiveness of ADEN Business School, an entrepreneurial education institution originated in Argentina that presented in April its report at the capital of Panama. The study places Chile in first place with 82 points, over a total of 100, followed by Panama with 77.2. In April and October 2012 Chile had the first place with 81.4 points in both cases, and Panama followed with 76 in the first period and 74.7 points six months after. Following Chile and Panama came this time Costa Rica with 74.1 points, Uruguay (73.1), Mexico (71), Brazil (70.6), Peru (68.8), Colombia (68.2), Argentina (64.5), Ecuador (64.5), El Salvador (63.6), Paraguay (61.9), Guatemala (60.5), Honduras (60.4), Dominican Republic (59.4), Nicaragua (59.3), Venezuela (57.1) and Bolivia (56.4).

Since 2010 when the Institute started this evaluation, these two Latin American nations have remained at the forefront with slight variations. ADEN evaluates ten aspects to determine the Index: coverage of

basic needs, institutional issues, infrastructure, macroeconomic stability, health, education, population expectations, market competence, labor relations efficiency and access to technology, as confirmed by the responsible of the study, the Argentinean Alejandro Trapé. The ranking is prepared by investigating these ten variables at “the 18 most important countries” representing 99% of the Gross Domestic Product (GDP) of Latin America, explained the executive. Economies such as Antigua and Barbuda, Bahamas or Belize are not included because of its small size and Cuba for the lack of reliable data, he stated.

According to Trapé, measurements made are based on data supplied by international financial organizations, official institutions of the different countries and “occasionally” some private, solid reputation measurement firm, which are listed in the document. The ranking has a margin of error of 5%, thus in some cases there are technical ties between countries as a result of the small difference between their averages.

CHILE AND PANAMA CONSOLIDATE AS LATIN AMERICAN LEADERS IN COMPETITIVENESS

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Estado de Sao Paulo informed that President Dilma Rousseff prepares the creation of another state entity in charge of the responsibility of river ports, waterways and locks of the country, functions now in charge of the National Department of Infrastructure and Transportation (DNIT). The newspaper highlights that based on the above, this government will create in three years the same number of state management entities than the previous government did in eight years. The new entity will be in charge of projecting, building, operating, maintaining and renewing navigation structure in rivers, today way under its possibilities and the potential of the country.

Still underway, Hidrobrás would have a double entailment reporting both to the Ministry of Transportation and to the Secretary’s Office of Ports of the presidency, responsible today of the seaports. The principal justification for its creation is that under the dependence of the DNIT river ports and waterways are in a second place, as sovereignty concentrates its activities in managing the immense railway network. “Countries the size of Brazil do not have multimodal bodies (managing more than one type of transportation) as the DNIT”, is the argument of the government authority involved in the project, explaining that Brazil does not use

GOVERNMENT OF BRAZIL STUDIES MAKING THE WATERWAY MODE INDEPENDENT

one third of its waterway capacity. “To potentiate this requires specialization”, he states.

The outgoing Minister of Transportation, Paulo Sérgio Passos, said the objective of the government is creating the state entity this year. “We are working in restructuring and considering a company to respond for river ports and the maintenance of waterways”, he affirmed, without giving any more details. According to Passos, continuity will depend of the new head of the ministry, former senator César Borges. On the other hand, the Superintendent of Interior Navigation of the National Water Transportation Agency, Antaq, Adalberto Tokarski, confirmed the project, which name according to him will be Empresa de Desarrollo Hidroviario EDH that will have the purpose to prepare the studies and investigations to plan the sector.

New State Entity Generates Information Shock in the Government

However, according to Estado, the Civil House (Casa Civil) denied the project, and at the same time the Minister of Ports, José Leonidas Cristino, stated this idea must still be studied in-depth and that a final decision has not been made. Valor, on the contrary, quotes Minister Cristino saying: “We are not going to constitute a state entity for waterways, and the official position of the government is that its creation is discarded”, who added that the waterways projects will remain under the responsibility of the Ministry of Transportation and the DNIT. Likewise, the

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minister emphasized that with the so called Provisional Measure of Ports, under discussion in Congress at this time, the Secretary’s Office of Ports he directs would be responsible of river and lake terminals, while waterways would remain with the DNIT, also responsible of road and railway management. The minister observed that the government is studying alternatives to stimulate developing river navigation, based on a plan prepared by Antaq. “If we are going to invest a representative amount of resources in roads and railways, we must also include the waterways”, he concluded.

IN ITS FINAL STAGE TENDER TO DEEPEN UPSTREAM WATERS OF

THE MAGDALENA RIVER IN COLOMBIA

in making the river navigable once again, which concentrates most of the GDP of the country. Companies as important as the Belgian Jan de Nul and the Dutch VanOord are part of the three selected consortia. The tender, which amounts to US$600 millions including ten years of maintenance, shall be formally opened in August.

Three international consortia out of nine presented were selected by Cormagdalena to participate in the tender for the channeling works between Puerto Salgar, 150 km by road from Bogotá, and Barrancabermeja, 250 km downstream, consistent

In between this conflicting information, Valor informed that an assistant of President Dilma Rousseff said that the creation of a new state entity in charge of the waterways and river ports has not yet been totally decided, but is now in its maturing phase, and that its launching tends to occur in the second semester of this year. The package must include the first concession of a waterway corridor (of the Tocantis River) to private initiative.

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COMPAÑÍA SUR AMERICANA DE VAPORES FORESEES “COMPLEX SCENARIO” FOR THE

SHIPPING INDUSTRY IN 2013situation of most competitors was a stabilizing factor during 2012 and will continue being so, in our opinion, during this year 2013”. Thus, the communication states that “the evolution of the market during 2013 will basically depend on the rationality of measures taken by the principal shipping lines”.

Besides, he acknowledged that “although the crisis of the industry has not ended yet, we do observe changes that may be determinant in the recovery and stability of the industry in the mid- and long-term, product of the great losses that the shipping industry as a whole has faced since the crisis of 2009”. In any case, Luksic stated that “despite volatility and risks, we are optimist towards the future of CSAV (and therefore) we have made great efforts to transform CSAV into an efficient company, more capitalized and focused on its clients and with a strong presence in Latin American markets, where we consider having competitive advantages”.

“The shipping industry in general is still suffering the unbalances of supply and demand that generate a considerable volatility in freights and, therefore, in earnings of companies”, is the analysis of the Compañía Sur Americana de Vapores, CSAV, according to a report of Mundo Marítimo, quoting Diario Financiero. In the communication addressed to shareholders of Memory 2012, deceased entrepreneur Guillermo Luksic mentioned the changes the industry must have done, which has “increased the fleet detained now for several quarters at levels of 5% (…) and the increase of joint operations, among others”. This, he explained, “has allowed that during 2012, which from the point of view of world economy has significantly been a more difficult year than 2011, freight tariffs have considerably increased compared to 2011, without prejudice of not reaching yet historical tariff levels”.

However, “the projection for delivery of new vessels by shippers for this year 2013 is approximately 10% of the world fleet. This compared to a growth projection of the industry of 5%-7% depending on different analysts”. This will unchain, says the letter “a complex scenario for this industry during 2013, which must continue with the measures described” before. Luksic added that “the complex financial

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The shareholders of Hapag-Lloyd and Hamburg Süd mutually agreed to stop conversations temporarily, informed World Maritime News. “Hamburg Süd does not wish to publicly comment on the matters of the points discussed. However, it wants to expressly establish that the owners of Hamburg Süd – different to the impression transmitted in several articles of the press – does positively favor listing the new

company that results from the merger if certain conditions are met”, declared the company in a press release. The Board of Consultants and the Board of Directors of Hamburg Süd have the firm vision that the merger of Hapag-Lloyd and Hamburg Süd would benefit both companies, and also to have Hamburg as boarding place.

HAPAG-LLOYD AND HAMBURG SÜD STOP MERGER CONVERSATIONS

MSC NEGOTIATES 35% OF ITS TERMINALS DIVISION FOR US$2 BILLIONS

Mediterranean Shipping Company (MSC) negotiated 35% of its division of terminals (Terminal Investment Limited TIL) with investment fund Global Infrastructure Partners

(GIP) and a group of co-investors, according to a joint communication published the beginning of April, informed Port Finance International. Business closure is expected for mid-year and will be subject to obtaining the relevant approvals.

Terminal Investment Limited (TIL) was founded in 2000 to assure docks and terminal capacity at the principal ports used by MSC, with headquarters in Genoa. Since then, TIL has continued growing becoming the sixth largest operator of terminals of the world, with interests in almost 30 terminals. With

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Roberto Azevedo, Brazilian diplomat

headquarters in New York, GIP is an investment fund with US$15 billion under its responsibility.

“We are extremely pleased of joining forces with GIP, one of the largest and most experienced investment funds”, stated Diego Aponte, Vice-president of MSC. “Through this society we are reinforcing our terminals division, which will allow us to capitalize opportunities and growth in the future. This complements the strategy of MSC of keeping a leading position in the industry”. On the

other hand, Adebayo Ogunlesi, Chairman of the Board of Directors of GIP, commented: “We are pleased of having entered into this exciting new society with MSC. This is in line with our strategy to develop the best agreements with industry leaders. We hope to work closely with MSC in the growth and improvement of this high quality portfolio of active containers terminals”.

He is the first Latin American to lead the World Trade Organization (WTO) since its creation in 1995 replacing French Pascal Lamy and will enter office next September, as reported by Portafolio quoting the EFE agency.

At the end of the consulting process held in private with each of the 159 member countries of the organization, the balance inclined in favor of the candidate of Brazil, who was competing with the former Mexican Minister of Commerce and

recognized negotiator of free trade agreements, Herminio Blanco. Brazilian diplomatic sources said that shortly after knowing the victory of Azevedo, he received a call from Blanco congratulating him for the quality and cleanliness of his campaign, and at the same time confirming him he accepted the result.

Azevêdo, 55 years old, is a respected diplomat that has dedicated most of his career to economic and commercial issues, and his work has been linked – in different stages – directly to the representation of his country at the WTO in Geneva. He has been ambassador of Brazil to the WTO for five years, where his country has a leading role among Latin American and developing nations. His fine diplomacy is acknowledged and is considered a connoisseur of an institution that coincidently is now in a situation of paralysis since his appointment as ambassador. He will enter office next September 1st, once the French Pascal Lamy has ended his second mandate at the institution, which he has directed for the last eight years.

BRAZILIAN ROBERTO AZEVEDO WILL BE THE NEXT DIRECTOR OF THE WORLD TRADE

ORGANIZATION

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Presidents of the United States and Mexico, Barack Obama and Enrique Peña

Latin Business Chronicle, quoting Milenio and Notimex, informed that during the recent visit to Mexico of the President of the United States, Barack Obama, both governments committed to work to make of North America the most competitive and dynamic region of the world, stated the Secretary of the Treasury and Public Credit (SHCP, in Spanish). In the Weekly Report of Vocero, the entity stated that between Mexico and the United States “there are great cooperation activities in benefit of our populations”, and that both countries represent a unique economic and commercial block at world level, because of the high degree of integration and complementarities existing between its economies. In this framework, he stated that the federal government endorsed its commitment of driving internal economic growth through structural reforms in order to advance towards forming a stronger and more competitive North American region. The above in order to accomplish that these internal agreements and transformations become a reality and an improvement for the pockets of

Mexican families through more and better jobs. “That is why within the framework of the visit of President Barack Obama to our country, both governments committed to work to make of the North American region the most competitive and dynamic worldwide. Between both countries there exist great cooperation opportunities for the benefit of our populations”, he stated.

In 2012, real growth of U.S. economy was 2.2 percent per year (compared to 1.8 percent in 2011). However, during the last quarter of last year the growth of the neighbor country showed signs of weakness (moving from an annual increase of 3.1 percent in the third quarter to -0.1 percent in the fourth quarter). For Mexico, the real GDP grew 3.9% in 2012, and in response to the growth weakness in the United States, the Mexican economic activity was partly affected, whereas for this year the economy would have a real 3.5 percent annual increase. However, to reduce vulnerabilities shown in the United States, Mexico is looking for the years to come that its economic growth is driven from the interior, stated the SHCP.

Ambitious, the Mexican Economic Reforms: Barack Obama

Meanwhile, the President of the United States, Barack Obama, during his visit to Mexico, affirmed that the “ambitious” reforms being worked in Mexico will cause the economy between both countries to reinforce and be more competitive to face together other markets.

MEXICO AND THE UNITED STATES COMMITTED TO CREATE THE MOST COMPETITIVE

REGION OF THE WORLD

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Growth, the Challenge of Mexico: Nobel Prize in Economics, Paul Krugman

Regardless of the above, growth continues being the main problem for Mexico despite the favorable perspective of its economy, considered the Nobel in Economics 2008, Paul Krugman, according to report of CNN Expansion. “Everything functions well except the growth rate”, said the economist. The expert states that in these past years the growth rates in Mexico have exceeded those of emerging economies as Brazil; however, they are 3% and 4% far from those entered by nations such as India or China.

Krugman considers that Mexico has shown progress in its social development dynamics, which at some time must reflect in economic growth; but it must find the way to exploit its economy. “I am optimist that this growth will speed up (…) but I continue waiting for the case

Nobel Prize in Economics, Paul Krugman

Mexico is an example for many economies of the world: BBVA

Mexico has become an example for many economies worldwide because it has been capable of maintaining a responsible management regarding handling public finance and has driven structural reforms that seek gaining competitiveness and stimulating growth, said Francisco González, Chairman of the Management Council of BBVA.

During the National Meeting of Regional Counselors, the executive highlighted that

Francisco González, Chairman of the Management Council of BBVA

He emphasized that in economic matters, the relationship between both countries is one of the most fruitful worldwide with a flow of more than one billion dollars, which places Mexico as the second market of exports. He insisted that more competition generated, Mexico will have a firm partner, as “when one prospers, so does the other”.

of a miraculous economy”, said the Nobel Prize. “Mexico in most cases is a happy story”, he added.

The Mexican government expects that the economy will grow 3.5% this year, although the International Monetary Fund and analysts of the private sector have reduced their forecasts in the last weeks in view of the deceleration of U.S. economy.

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President Dilma Rousseff of Brazil talks to the host President, Jacob Zuma of South Africa, in the presence of the other presidents of the BRICs Group, Manmohan Singh of India, Xi Jinping of China and Vladimir Putin of Russia

Mexico has solid economic strengths which places it among the less vulnerable nations worldwide and assured that the European crisis has not affected BBVA Bancomer. González mentioned that the country shows signs that will make it accomplish a potential growth higher than three percent in the next two years. “Mexico has consolidated as one

of the economies with less macroeconomic vulnerabilities of the world, it not only has a low debt level and a solid profile, but also has a moderate current account deficit, appropriate international levels of reserves and a contingent line of credit of the International Monetary Fund”, he stated.

BRICS COMMITED TO IMPLEMENT THE BANK OF DEVELOPMENT OF INFRASTRUCTURE

According to the agency EFE, during the last meeting of the BRICs Group (Brazil, China and South Africa) held in Durban the end of March, was decided the creation of its own bank of development as a financial

international alternative, which purpose is to “move resources, encourage the construction of infrastructures, and sustainable development” in emerging and developing countries, as explained by the President of South Africa, Jacob Zuma.

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The President of Brazil, Dilma Rousseff, stated the bank will be a key issue in “one of the most decisive aspects” of the contribution of the BRICs to global economy, which is “financing of development”. Once it starts, the institution will service as complement to institutions such as the International Monetary Fund (IMF) and the World Bank (WB), which the BRICs consider controlled in excess by Europe and the United States. The meeting at Durban also served to establish a center of studies of the BRICs, and also a business council with which the block may build commercial relationships between its partners.

BRIC countries represent 42 percent of world population and almost 45 percent of the labor force existing on the planet, based on data of the group. In 2012, Brazil, Russia, India, China and South Africa gathered 21 percent of the world’s Gross Domestic Product (GDP) and commerce among them reached 282 billion dollars. Brazil will host in 2014 the sixth summit of the group, which growth and need for investments in current financial crisis has multiplied its importance within the global economic scenario.

Pacific Alliance formed by Chile, Colombia, Mexico and Peru was confirmed today as a model of regional integration upon its announcement of having concluded 92% of tariff relief for the trade of goods and services and another 8% to be finished at the end of July, informed Latin Business Chronicle quoting Emol.economia. The announcement was done by the Ministers of Foreign Affairs and Commerce of the four countries at a press conference given in Villa de Leyva, a colonial city of the center of Colombia, to present the advances of the 8th Ministerial Meeting of the block that reviewed what was agreed at the Presidential Summit held in May in Cali.

“We have advanced so quickly that the paths are almost all fulfilled”, stated the Colombian Chancellor, María Ángela Holguín, host of the meeting, altogether with her peer of Commerce, Industry and Tourism, Sergio Díaz-Granados. Holguín stated that the Alliance advances towards “a deep integration” including, besides free trade, the opening of commercial offices or joint embassies, free movement of individuals, strengthening of education and of small and medium enterprises, among other factors. The Chancellor also announced that the range of countries observers of the Alliance will continue extending as incorporation requests have been received from Turkey, South Korea, China and the United States, which in her opinion shows the level of interaction that the Latin American block will have with the rest of the world. If its incorporation as observers is approved, these countries will add up to the dozen nations from several parts of the world that currently have this status within the Alliance, a mechanism that

PACIFIC ALLIANCE DEEPENS ITS INTEGRATION

BY THE ROUTE OF FREE COMMERCE

April - June 2013

as stated to EFE by the Mexican Chancellor, José Antonio Meade “is a good platform to look to Asia”.

Of the advances achieved, the one that must have the most economic repercussion is the agreement of tariff relief that, according to the Minister of Commerce of Colombia, will be concluded before the end of July, as was requested by the Presidents of the Summit at Cali. “We have reached a consensus for almost 92% of goods and the other will be done gradually, with this we comply with the mandate of the Presidents that before the end of June we will have concluded the commercial negotiation”, said Díaz-Granados. The Minister explained that the tariff relief of 8% will

be negotiated during a meeting of the Vice-Ministers of the four member countries coming soon in Santiago de Chile. “Before July 30 we must have closed this negotiation and inform it to the members of the Alliance”, he reiterated.

Once this commercial negotiation is concluded an agreement will be signed for the zero tariff that will complement the Marco Agreement which resulted in the Pacific Alliance adding up to 210 million persons of member countries, equal to 35% of Latin America and the Caribbean, and representing 33% of the commerce of the region. The alliance as “a great integrated market”, stated Minister Díaz-Granados.

The countries of the Organization for Economic Cooperation and Development (OECD) invited Colombia and Latvia today to start negotiations towards their next accession and at the same time expressed their intention of making the same with Costa Rica and Lithuania in 2015, as informed by the economic paper Portafolio. The Ministers of the 34 members of the OECD decided this invitation during the examination of the applications of the candidates to enter during the annual meeting held in Paris.

Colombia had formalized its wish to integrate the organization in January 2011 during a visit to Paris of President Santos, when he justified this intention because the OECD “is the club of good practices”. “Colombia and Latvia have made clear that their entry is critical for their development and reform efforts”, stated the general secretary of the organization, José Ángel Gurría, who also stated that both countries “will enrich our collective experience and reinforce OECD as source of effective and innovative public policies”. Gurría also stressed that today’s decision “underlines the commitment of the OECD for a greater diversity of its members and reinforces its roles as a marker of standards and as the “house of the best practices”.

OECD INVITES COLOMBIA TO NEGOTIATE ITS ACCESSION TO THE GROUP

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What is OECD?

The origins of the Organization for Economic Co-operation and Development OECD date back to 1960, when 18 European countries, plus the United States and Canada, joined forces to create an organization dedicated to global development. Today, 34 member countries span the globe, from North and South America to Europe and the Asia-Pacific region. They include many of the world’s most advanced countries but also emerging countries like Mexico, Chile and Turkey. Also work closely with emerging giants like China, India and Brazil and developing economies in Africa, Asia, Latin America and the Caribbean. Russia is negotiating to become a member of the OECD, and we now have close relations with Indonesia and South Africa through the “enhanced engagement” program. Together with them, the OECD brings around its table 40 countries that account for 80% of world trade and investment, giving it a pivotal role in addressing the challenges facing the world economy.

Gurría states he met in Paris with President Santos who requested two years ago to enter the club. “Colombia will not start from scratch its accession to the group. They have been preparing this, it is a matter of State”, he added. The organization known as the “Club of developed countries” stated they will work “very closely” with Costa Rica and Lithuania from now until conversations for accession start in 2015. For Colombia and Latvia the following step is establishing individual calendars with the committees responsible of substantial working issues of the organization.

Among current members there are two Latin American countries: Mexico and Chile. The latter incorporated in 2010 during the last extension phase, altogether with Israel, Estonia and Slovenia.

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Miami Airport Convention CenterThe Port Event of the Container Logistics Chain

The port has firmly established as a critical link of the container logistics chain. Any bottleneck or delays that may occur next to the harbor or inside the port dramatically affect the time it takes for the cargo to arrive to its final destination. Therefore, ports require processing cargo in an efficient and effective manner using the last technologies available in the market. TOC places the port in the center of the logistics chain, in line with its 40 years of history and heritage.

Throughout the years, TOC has built a solid reputation as the most reliable portfolio of events in the maritime, shipping, port and terminal industries. The events have now renewed the approach to the logistics chain, thus becoming the business and

Upcoming EventsApril - June 2013

TOC CSC Americas 2013

October 1-3, 2013Miami Airport Convention Center (MACC)Miami, FL, U.S.A.

networking event par excellence within the container logistics chain.

The exhibition and conference of the TOC Container Logistics Chain is the global site to gather ports, terminals, shipping liners, 3PLs and shippers. The exhibition is a showcase for technology and port and terminals operations and the conference focuses on the cooperation within the container logistics chain.

The executive director of Latinports, Julián Palacio, will be one of the important guest speakers. You may find the program of the event, instructions for inscription and registration at the conference hotel on the webpage www.toc-events.com

Members of Latinports will have a special rate; therefore those interested may contact jpalacio@latinport.org

Spanish OHL was Awarded the Tender for Terminal 2 of the Port of Valparaíso

Beginning of April, the Spanish company OHL was awarded the tender for Terminal 2 of the Port of Valparaiso, after overcoming the offer presented by the consortium formed by Grupo de Empresas Navieras, Besalco and Port America, informed Latin Business Chronicle quoting the newspaper La Tercera.

The general manager of Empresa Portuaria Valparaíso, Harald Jaeger, stated the project involves an investment of almost US$400 millions. In the meantime, the director of OHL, Sergio Marino, emphasized that “we are conscious we have made an aggressive offer because we were interested in these works, which have a great potential” and explained that depending on the demand, the construction could be developed in one or two stages. The terminal will have a capacity to lodge two post-panamax vessels and some minor vessels. The total dock has 725 meters, of which the first phase includes 350 meters according to the bases of the tender.

Cartagena Advances To Become A World Level Megaport

According to the newspaper El Tiempo, the project Mega 2017 involves in its two stages investments for approximately one billion dollars. The port of Cartagena de Indias, now subject to a great technological and infrastructure renovation, aspires to become one of the 30 best megaports of the world in 2017, when its capacity will include moving up to five million containers. The project Mega 2017 that involves in its two stages investments for approximately one billion dollars seeks for that year that Cartagena doubles its current containers movement, a cargo similar to that moved today by the U.S. ports of Los Angeles, Long Beach or New York. Its evolution endorses this ambitious plan, as port facilities have moved from transporting 96,000 containers in 1993, when the concession was granted to Sociedad Portuaria that manages it, to almost 2.3 millions. This port already receives Post- Panamax vessels, maritime trade vessels that carry up to 14,000 containers, and the challenge in infrastructure is being able to move international cargo more quickly and,

Latin American Port News Abril - Junho 2013

Chile Colombia

April - June 2013

besides, to favor exports of national products to other countries. It has six gantry cranes to unload merchandise from vessels and at this time is working in the installation of a seventh crane that will expand platform capacity. Among project works for the construction of the megaport is dredging the seabed as deep as possible to receive vessels of 14 to 16 meter draft. A retired captain of the National Navy and manager of Sociedad Portuaria, Alfonso Salas, assured in an interview with EFE that the key to competitiveness rests in creating the best conditions for the Caribbean region. “If we Colombians wish to have working sources and generate welfare, the only way is generating elements that have external demand”, he stated. And all this happens because Colombia has a first category port in the Caribbean, with a commercial development linked to the extension of the Panama Canal. “The place with the greatest business infrastructure of the 21st century is the Caribbean area”, stated the manager of Sociedad Portuaria on the extension of the Canal. This company works furthermore to improve transportation of merchandise from the interior of the country to the port of Cartagena, with a project to transfer containers from the river port of Gamarra by the navigable Magdalena River, the greatest of Colombia. Salas anticipated that in two or three years the progress of this project will be a reality: “We are making the studies”, he stated.

These plans will undoubtedly benefit Colombian foreign trade, as in 2012 exports amounted to 60,274 million dollars and it is foreseen that for this year these will arrive to 70 billion.

But the competitiveness of Colombian producers has another challenge: reduce land freight costs that transport most of the exported merchandise, a cost that according to the Asociación Nacional de Empresarios(ANDI) is much higher than in countries as the United States, Mexico, Holland or Germany. In this sense, Salas made it clear that to transport more national merchandise “new roads must be built and existing ones improved”. At present the port of Cartagena is developing a modern system to control every truck that enters or leaves its facilities to optimize loading and unloading time, assign priorities and reduce environmental impact that represents less hours of fuel consumption. The purpose is that trucks remain parked the least time possible while waiting to deliver or receive cargo. Definitively, the challenge of Sociedad Portuaria de Cartagena is to build the necessary infrastructure to respond to the needs of the FTAs signed by Colombia with several countries, among others the United States, which is about to complete one year of operation. During its first year, this FTA has granted important benefits to Colombian sectors such as flowers, textiles and hydrocarbons.

New Container Terminal Starts Operations in Barranquilla

Upon arrival the end of June of three gantry cranes from Miami, operations of the Barranquilla Container Terminal, BCT, are foreseen to start in August. This is the first terminal of the Colombian city exclusively dedicated to containers with an investment

April - June 2013

Tender Process Starts at the Port of La Unión

According to the communication of the Autonomous Executive Port Commission, CEPA

El Salvador

amounting to US$60 millions. Alejandro Múnera, commercial manager of BCT, stated operations will start with three gantries, low-profile Panamax cranes, equipment currently non-existent in Barranquilla and that will allow high vessel efficiency. “We will offer services at the same level of the other terminals of the Caribbean Coast and Latin America”, stated the executive. He emphasized that the Port of Barranquilla required this project as 100% of the import and export cargo is moved through this port, 62% being locally produced. He also stated that BCT will have a movement capacity of 116 thousand TEUs per year and projection for 2013 is estimated to move about 24 thousand containers.

This work is the result of a joint venture between SSA International, one of the largest terminal operators worldwide and Sociedad Portuaria de Santa Marta through its affiliate Sociedad Portuaria del Norte in Barranquilla.

(in Spanish), parties interested in the tender for the operation of the Port of La Unión may obtain the Prequalification Rules for free by downloading them

directly from the electronic site of public acquisitions http://www.comprasal.gob.sv . To formalize participation, notice must be sent to electronic mail uaci@cepa.gob.sv, including the following information:

Reference: Registration Application

Name of the Interested Legal Person, Name of the Legal Representative or Attorney, Telephone and Fax numbers, Addresses of the Offices, Electronic Mail of Contact, and confirmation of satisfactory downloading of the Prequalification Rules.

Reception of Prequalification Documents will be on September 13, 16, and 17, 2013 from 8:00 a.m. to 3:00 p.m. and Opening of Prequalification Documents will be on September 17, 2013 at 3:15 p.m., official time of El Salvador. For further information interested parties may communicate with the UACI of CEPA, e-mail uaci@cepa.gob.sv,or telephones (503) 2218-1229 or fax (503) 2218-1226.

April - June 2013

China Will Study the Possibility of Building a Railway Corridor Connecting the Atlantic and the Pacific

According to magazine Semana, as doubts increase on the viability of the controversial interoceanic canal that will be supposedly built by the Chinese in Nicaragua, the possibility arises of a more realistic alternative in Mexico. The President of China, Xi Jinping, and of Mexico, Enrique Peña, signed the beginning of June at the Mexican capital an agreement to study the possibility of building an industrial corridor 300 kilometers long to connect the Atlantic and the Pacific, through the ports of Coatzacoalcos (Veracruz) and Salina Cruz (Oaxaca). The project, which is railway transportation, would cost 6 billion dollars and the fact that a preliminary agreement exists between the two presidents gives it a clear advantage over the Nicaraguan project.

Government Concessions Construction of Controversial Canal

According to Portafolio, in June the National Assembly of Nicaragua approved a 50-year concession to a Chinese company based in Hong

Mexico

Nicaragua

Kong to promote, design, build and manage an ambitious interoceanic canal project in the Central American country at a cost of 4 billion dollars. The concession favored HK Nicaragua Canal Development Investment Co. Limited (HKND Group), headed by the Chinese lawyer Wang Jing, who is also the chief of Xinwei Telecom Enterprise Group, company that was awarded last year a concession to operate mobile telecommunications. The chosen Chinese company will have absolute power on tariffs for the future pass, expropriation, change of water courses and subcontracting.

The idea is that this canal competes with the Panama Canal and foresees the construction of a river canal to join the Caribbean and Pacific coasts, a deep-water port at both coasts, a railway corridor or dry canal for transportation of cargo between the two coasts, free trade zones, airports and a hydrocarbon pipeline parallel to the canal. According to the “Special Law for Infrastructure and Transportation Development of Nicaragua regarding the Canal, the Free Trade Zones and Associated Infrastructure”, the HKND Group may concession subprojects to other companies. Besides, entitles the company created just 10 months ago with the absolute power on tariffs for the future canal, the expropriation of any land considered necessary, and using or diverting

April - June 2013

at its convenience all water courses, while obliging the Nicaraguan State to waive any type of immunity in case of conflict. The concession is extendible for another 50 years.

The government of President Daniel Ortega estimates that the Panama Canal is resulting inadequate for the new vessels of the Maersk Triple E family and that the new canal would give way to these vessels that measure 400 meters long, 59 meters wide and 73 meters high. Preliminary studies will be finished in 2015, when the construction of the project would start. The government estimates that the Gross Domestic Product (GDP) of the country will increase 15 percent for 2015 when the works will start. Studies will define the route among at least five possible routes from the Caribbean coast that pass by the Cocibolca Lake, some 8,000 square kilometers and the greatest water reserve in Central America, to converge on the Brito River, at the Rivas region in the Pacific.

URUGUAY

Port of Montevideo Favored by Argentinean Customs Measures

An article of El País of Montevideo, quoted by Latin Business Chronicle, gathers information of the Argentinean newspaper Clarín, which states that most shipping companies are

Uruguay

diverting part of the transit cargo going to Paraguay, Bolivia and Brazil from Argentinean ports to Montevideo. Clarín stated that transfer gradually started by the companies Maersk, Hamburg Süd, CMA CGM, CSAV, China Shipping, MSC, Cosco and Evergreen. It also stated that this year the amount of containers in transit to Paraguay from the Uruguayan terminal could increase 15% this year.

“The principal companies affected are those from Paraguay as its foreign trade is channeled through maritime companies arriving to Buenos Aires and local shipping companies that transship their cargos to Asunción in smaller vessels”, stated the Argentinean newspaper. A new customs rule established in March by the Federal Administration of Public Income, established that all transit cargo must process a new sworn declaration with data and information not required before and must pass almost without exceptions by the so-called “red channel” of Customs.

Clarín explains that the new control scheme forces customs agents and shipping companies to present a sworn declaration with data on sellers and buyers and the commercial operation invoice. Besides, they must send to “verification”, by imposition of Customs, all containers, when before those verified were only

April - June 2013

I see that Latinports is growing and providing a positive impact with Latin American ports. Congratulations.

John RydlundSenior Port PlannerCardno TEC Inc.USA

the ones considered “suspicious”. And it adds that controls on transit cargo have a tariff cost for shipping companies ranging from US$375 (for a “floor verification” of a 20 feet container) to US$2,000 for an “exhaustive inspection” of a 40-feet, loose cargo container. In this case, verification cost is equal to the total value of the freight paid from Europe to Buenos Aires.

On 2012, 120,000 containers were moved with cargo transshipped to Paraguay. 65% of transshipments were done in Argentina – most in Buenos Aires – and the other 35% in Uruguay. Forecasts for this year show that more than 50% of containers will change vessels in Montevideo.

I appreciate delivery of the newsletter which has very interesting information.

Rafael TorresPresidentLatingroupColombia

Absolutely interesting. Congratulations.

Marco A. RobalinhoGeneral SecretaryCompany for Urban Development of the Region of the Port of Rio de JaneiroBrazil

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