South America’s trade with countries such as China, Germany, Japan and India are expected to gain momentum in 2010 spurred by the regional economic recovery, free trade agreements and the Rio 2016 Olympics. Bilateral trade between Latin America and China will continue to grow in 2010 following the implementation of the FTA between Peru and China. Latin American trade with China grew by 40% in 2008 to $140 billion, but dropped in 2009 following the global economic crisis. China is South America’s second largest trade partner after the US.
South America Trade: Major Partners
Latin American trade with Germany grew by 12% to $56 billion in 2008, but fell in 2009. The year 2010 is expected to witness a record surge in German-Latin American trading, reinforcing Germany’s position as the region’s fourth largest trade partner. German enterprises are viewing Latin America as a viable industrial base, and are projected to contribute 10% to the industrial GDP of Brazil, for example, in 2010. German companies have investments worth more than $70 billion in the region. German steelmaker ThyssenKrupp, for instance, is building a $5 billion steel mill in Rio de Janeiro which is expected to be operational shortly. Apart from Brazil, German firms are also targeting Chile, Colombia and Panama for large scale projects.
Japan’s trade with Latin America is expected to rise in 2010 as Japanese companies are riding on the resurgence of the region’s economy to offset a weak market at home. Latin American trade with Japan rose by 15% in 2008 to $68.1 billion, but declined in 2009 echoing the global financial crisis. 2010 promises to be a good year for the Latin American-Japanese trading community and Japan is hoping to build on its reputation of being the region’s third largest trading partner. Many Japanese consumer product companies like Panasonic have started introducing products that would cater to middle income families and increase the spending power in light of the Latin American economic resurgence in 2010 and beyond. The Japan-Peru Investment Agreement is planning to break new grounds in the Peruvian investment landscape. Japan is also in the process of negotiating a trade and investment agreement with Colombia. In addition, Japan’s trade with Brazil, Chile, Argentina and Venezuela has also increased following the adoption of Japanese television standards, ISDB-T, in the region.
Latin America’s trade and business with India are expected to gain traction in 2010, according to R.Vishwanathan, India’s ambassador to Argentina, Uruguay, and Paraguay. Indian firms will increase their investments in IT, pharmaceuticals, energy and mining. Latin American trade with India grew by 46% in 2008 to $16 billion, but expectedly fell in 2009. India is Latin America’s fifth largest trading partner in Asia.