The United States’ housing crisis, which plunged the entire global economy into recession in 2008, has begun to ease but international trade does not seem to be growing as fast as global GDP. Slowing international trade is likely to bring down Latin America’s trade surplus from a whopping $41 billion in 2012 to a mere $8 billion in 2013, according to a new report from the Economic Commission for Latin America (ECLAC).
LATAM’s export values are expected to grow by just 1.5% in 2013 (3% in volumes and -1.5% in prices) — similar to the 1.4% growth observed in 2012. However, the region’s imports are expected to spike suddenly, expanding by 4.5% and bringing the trade surplus down to just $8 billion.
The commission states that the weak global economy will restrict global trade growth to around 2.5% in volume in 2013. Mexico and Central America, which export mainly to the United States, are predicted to benefit from the US economic recovery. However, limited European growth will slow exports from some South American countries.
The ECLAC also expects the region’s export market to shift from commodity to more processed products. In terms of countries, Paraguay and Uruguay show the largest increases in export values in 2013 (33% and 14%, respectively), and this was largely due to considerable export growth in soybean and meat exports. In contrast, some of the region’s countries are seeing their export values fall, such as Peru (-7%) and Guatemala (-5%). Mexico, the region’s top exporter, will see export growth of almost 3%. Brazil, the region’s second main exporter, will see a standstill in exports.
According to the report, countries like Chile, Ecuador and Mexico are heavily dependent on the commodity export. The commission has, however, praised the growing number of free-trade deals, saying they will boost international trade volume in the days ahead. These deals include Trans-Pacific Partnership Agreement (TPP) and Transatlantic Trade and Investment Partnership (TTIP).