U.S. Undersecretary of International Commerce Christopher Padilla.  Photo courtesy of the U.S. Embassy in Montevideo, Uruguay.

During an innovation conference in Uruguay last week, a U.S. trade official invited Latin American business and government officials to attend the second annual Americas Competitiveness Forum in Atlanta in August.

U.S. Undersecretary of Commerce for International Trade Christopher Padilla also encouraged increased economic cooperation between the U.S. and Uruguay, despite the absence of a bilateral free trade agreement.

Mr. Padilla met with Uruguay officials during the Americas Innovation Forum in Punta del Este, Uruguay, March 30 – April 1. The event drew more than 1,300 attendees from the Western Hemisphere to discuss ways the region can spur innovation in technology, biosciences and education.

“I’m looking forward to the Atlanta conference in August, and I hope many people here will also be able to attend,” Mr. Padilla told GlobalAtlanta during the Uruguay event.

He added that U.S. Secretary of Commerce Carlos Gutierrez regretted he could not attend the conference in Uruguay, but that the secretary had signed an agreement endorsing the Uruguay event when he was in Atlanta last June for the inaugural Americas Competitiveness Forum, which was hosted by the U.S. Commerce Department and CIFAL Atlanta.

Mr. Padilla said he was in Uruguay for the innovation conference, but also to meet with the country’s economic and industry ministers to discuss ways to deepen the economic relationship with the United States.

Uruguay approved a Bilateral Investment Treaty with the U.S. last year, and Mr. Padilla said officials were discussing the possibility of a Trade and Investment Framework Agreement, an economic partnership that would create a structure for increasing trade and resolving disputes and which would be a step toward the creation of a full free trade agreement.

Uruguay’s Legislature, however, rejected a proposed FTA with the U.S., claiming it would undermine Uruguay’s relationship with its Mercosur partners, Brazil, Argentina and Paraguay.

Mr. Padilla refuted this notion, telling Uruguayan media that the U.S. encourages its trading partners have trade agreements with other countries. He cited the United States’ FTA with Chile, a country that has free trade agreements with 40 other countries, including an association agreement with Mercosur.

He added that the U.S. and Uruguay reached $1 billion in two-way trade for the first time in 2007 and that he wants to see the relationship continue to grow.

Despite the current U.S. economic downturn, Mr. Padilla said Uruguay is in a good position to receive new foreign investment in innovative industries because of its sound fiscal policies, low debt and high commodity prices.

Uruguay’s transformation from traditional agricultural commodities to innovative, high-tech industries, like software development, is attracting foreign investment, he noted.

Mr. Padilla especially applauded Uruguay’s commitment to supporting technology-based educational programs, such as providing laptop computers to primary school children.

The country was the first to implement the U.S.-based One Laptop Per Child program, a non-profit project that aims to provide inexpensive, portable computers for children in the developing world.

“This is a country that is doing all the right things in promoting competitiveness and serving as a model for the rest of the Western Hemisphere,” he said of Uruguay.

Mr. Padilla’s remarks at the innovation conference highlighted the role that Uruguay’s government and others in the Americas can play in fostering innovation. He underscored the importance of creating public-private partnerships so the region can continue to attract investment.

“We share the responsibility of bringing together the private and public sectors to promote our collective advancement,” he said. He added that although the Americas have enjoyed four years of strong economic growth, with a 5.5 percent growth rate in 2007, China, India and Southeast Asia are strong competitors for foreign investment.

Mr. Padilla emphasized the need for governments in the Americas to create an environment where private capital “feels safe” so that investors will choose this region over others. But he stressed that the role of government should be one of promoting innovation without directing it.

“Innovation cannot be directed by central government policy makers. We can’t have government officials rather than innovators leading innovative products. The question is how can we work through the market to distribute resources for innovation without government interference,” Mr. Padilla said.

Governments can work to protect intellectual property rights, create safe capital markets, structure efficient bankruptcy laws and fund education in science and math, all of which form the basis for market-driven innovation, he said.