SANTIAGO — A frequent joke with Latin American economists in the 1980s was that every time the United States sneezed, Latin America caught a cold. It followed the assumption that opening your economy to free trade – a necessary step toward globalization – would leave developing countries at the mercy of the economic cycles of advanced nations.

But it was not so much globalization in those days as dependence on another developed economy. The concept is illustrated by the American mortgage crisis of 2008, which became a financial crisis then recession for the U.S. and much of Europe, but had little effect on Latin American economies bar Mexico, which was linked to its northern neighbor by the NAFTA free-trade agreement.

For this time, a more globalized Latin America had its eggs in various baskets. China was its other big trading partner and the prices of raw materials our region sells remained high in the face of Chinese demand, even as demand shrank in the rich West.

Now that Chinese demand has slowed and our commodities' prices are in decline, have we merely exchanged one senior partner for another? Will we catch a cold when China sneezes?

Not entirely. Certainly globalization, the fruit of commercial and economic liberalization and deregulation, makes every economy more dependent on others. And smaller economies are clearly more vulnerable to the vicissitudes of international markets.

Still, opening up to the international market is also the only way for small economies to grow. It means they produce and sell goods and services to the world - a marketplace of 7.3 billion consumers - instead of selling to the 15, 40 or 90 million people living in their own country.

Admittedly, opening an economy initially brings confusion, bankruptcies and job losses. In Chile for example, the first country to cut import tariffs more than 30 years ago, cheap foreign textiles destroyed the local clothing industry, leaving producers bankrupt and their employees on the street.

But just as globalization bankrupted local industries unable to compete with foreign markets, it also opened the doors to the rise of more competitive and innovative firms in the region: what we can now proudly refer to as Latin American multinationals. These are firms that have invested and settled in neighboring states, before moving to invest across the region and the world. They are our most innovative firms.

These pioneering firms - which we in América Economía have identified and termed multilatinas - barely existed 20 years ago, aside from a few state-affiliated mining giants. Today the 100 principal multilatinas have annual sales worth almost $1 trillion equivalent to the Gross Domestic Product of Argentina, Chile and Peru together.

Continental bonds

Certainly the list of Latin multinationals includes state-owned oil, energy and raw materials superfirms like Pemex, Petrobras, Venezuela's Pdvsa, Colombia's Ecopetrol, Argentina's YPF (nationalized again in 2012) or Chile's Codelco. These are inevitable multinationals for their size, and have been for some time.

But hundreds of other private multinationals have emerged over the last decade, in all sectors. You have Colombian financial groups like Sura, retail giants like Cencosud, Falabella and Ripley, diversified food conglomerates like Gruma and Bimbo of Mexico, Brazil's JBS-Friboi and Peru's Alicorp. We should not forget the world's largest cement firm, Cemex, the first regional firm of global dimensions.

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Cemex is global empire, founded in Mexico in 1906. (photo - Martin Lopatka)

América Economía Intelligence has identified about 300 multilatinas with annual sales of over $250 million, and chosen from these, in keeping with levels of internationalization and information provided, a shortlist of the top 100 firms for 2014. We published the ranking in September on our website.

A recent phenomenon is that some of these firms began outsizing and outselling the state-sector giants internationally. The value of Chilean oil firm Copec"s sales began to exceed those of Codelco in 2011, with Cencosud crossing the same threshold in 2013.

Another effect of the Latin multinationals' emergence has been their impact on regional integration through business. Movements of executives and professionals between regional capitals, brands and products that have crossed frontiers and investments in each other's countries, all help us better understand our neighbors and seek better ways to collaborate. Peacefully resolving frontier disputes is imperative when all countries have investments and firms in neighboring states.

The Chilean examples are no coincidence. Chile was the first Latin American country to embrace globalization and today has the most firms in the list of 100 Latin American multinationals, when comparing its number of multinationals with the size of its economy. The same exercise done with other countries - dividing the number of multilatinas by the size of its economy - gives us after Chile, Colombia, Mexico and Peru. All these have opened their economies to global flows, and stimulated competitiveness and innovation among private firms, several of which have become world-class.

Some of the multinationals, and likely others yet to emerge, may well become the Walmarts, Airbus, MetLifes or Facebooks of the second half of this century. Welcome globalization.