On June 26, 2016, Panama will formally inaugurate an expanded canal that promises to reduce congestion and double its shipping capacity. Panama is not alone in such efforts: in order to bolster competitiveness, more countries across Latin America are pursuing infrastructure projects to expand their trade capacities. While some institutions like Colombia’s Port of Cartagena are renowned for their global connections and technical efficiency, congestion and high transportation costs remain barriers to unlocking the region’s full potential.

The Adrienne Arsht Latin America Center hosted a roundtable discussion at the Atlantic Council addressing the key role infrastructure plays in promoting trade. During the event – held On March 23, 2016, the same day that the Panama Canal announced its expansion’s inauguration – the Center’s Latin America Economic Growth Initiative Director, Jason Marczak, opened and moderated the discussion among expert panelists, followed by questions from the audience. The roundtable featured Giovanni Benedetti, Commercial Director of the Port of Cartagena; Marianela Dengo-de Obaldía, Manager of Strategic Relations for the Panama Canal Authority (ACP); Roger Libby, Senior Director for Corporate Public Policy of DHL; and Hajime Takeuchi, Chief Representative of the Japan International Cooperation Agency.

Drawing on their diverse experiences in the public and private sectors, the panelists discussed the overarching imperative for regional investment in infrastructure and the positives and negatives of current capacities. Among the positive developments is the above mentioned multibillion dollar Panama Canal expansion, detailed in a brief project update video presented by Ms. Obaldía. Despite a string of delays due to work stoppages and cost overruns, the canal’s $5.2 billion expansion has already encouraged several US ports (especially on the Eastern seaboard) to deepen their capacities to handle post-Panamax vessels. These heavy freight ships, which are as long as three football fields and carry 2.5 times the number of shipping containers as regular vessels, are expected to alter commercial trends, with ships unloading more cargo at fewer stops and increasing trade of more value-added goods between countries.

From the perspective of the region’s ports, Mr. Benedetti highlighted how countries’ lack of internal connections and intermodal transport limits possibilities for growth. Following the Port of Cartagena’s own video presentation, he noted that inadequate physical infrastructure and under-developed use of the Magdalena river system makes internal transportation within Colombia more costly than most global destinations. With the port’s specialized facilities and efficient procedures, Mr. Benedetti added, “Shanghai is closer to Cartagena than Bogota.”

To clear these intra-regional hurdles, the panel agreed that long-term sustainability and steady funding were the most important factors for a project’s success. In discussing his organization’s role as a source of loan assistance and technical expertise for many Latin American countries, Mr. Takeuchi argued that political commitment and a willingness to sustain resources over time can be more crucial than access to capital. He argued that, “If there is a person who really has the guts to materialize these things, it is really, really, the single most important thing.”

With DHL’s reach around the world in a broad array of shipping and logistics services, Mr. Libby agreed with the importance of political will. He added that creating new physical and digital links are crucial for ensuring the free flow of goods, people, and data that increasingly dominates 21st century global trade.