The Economic Commission for Latin American and the Caribbean (ECLAC) predicts that exports from the region will fall 2.0 per cent in 2019 “due to the complex international context.”
“The marked deceleration that international trade in goods has experienced this decade, and which has deepened since late 2018, will negatively affect Latin America and the Caribbean’s foreign trade performance in 2019,” said ECLAC in a new annual report released on Wednesday, at a press conference here, led by its Executive Secretary, Alicia Bárcena.
According to the United Nations regional organisation, the value of regional exports and imports of goods is projected to drop -2.0 per cent and -3.0 per cent, respectively, “in a complex international context characterised by factors including the exacerbation of trade tensions, lower global demand, the growing substitution of imports with national production in some economies, the lower proportion of Chinese production that is bound for export, the retreat of global value chains, and the irruption of new technologies that impact on the very nature of trade.”
” It is estimated that the value of intraregional trade will contract by almost 10 per cent in 2019, in contrast to the value of shipments to the rest of the world, which is expected to hold steady at around 0 per cent.”– ECLAC
In its report, “International Trade Outlook for Latin America and the Caribbean 2019,” ECLAC said the region’s trade performance shows “significant heterogeneity by sub-region,” with South America experiencing a -6.7 per cent contraction in the value of its shipments, “far steeper than the regional average.”
“This reflects the economic stagnation faced by the sub-region – with growth projected at just 0.2 per cent in 2019, which negatively affects intraregional trade – and the heft that basic products have in its export basket, with prices for several of these having fallen,” ECLAC said.
It estimated that only three South American countries (Argentina, Ecuador and Uruguay) will see the value of their shipments rise in 2019, driven by higher volume in their exports of basic products.
In contrast, ECLAC said Central America, the Caribbean and Mexico will experience increases in the value of their exports – 2.6 per cent, 3.7 per cent and 2.8 per cent, respectively.
“This panorama forces us to rethink strategies for the region’s international insertion and put more effort into promoting intraregional trade.”– ECLAC Executive Secretary, Alicia Bárcena
“This is indicative of their lower dependence on basic products and their greater trade ties to the United States, whose demand for imports has shown more resilience than that of the region’s other main export markets,” ECLAC said.
The report states that weakened demand in a regional context of very low growth has hit intraregional trade especially hard.
“It is estimated that the value of intraregional trade will contract by almost 10 per cent in 2019, in contrast to the value of shipments to the rest of the world, which is expected to hold steady at around 0 per cent,” ECLAC said.
“This is especially serious given that intraregional trade has a far bigger manufacturing component than that of exports to other markets, and also due to its great importance for SMEs that export,” the document says.
In her presentation, Bárcena said: “This panorama forces us to rethink strategies for the region’s international insertion and put more effort into promoting intraregional trade.”