Latin America’s Growing Influence in Global Exports Markets
Global trade is critical to fueling the world’s economic growth and raising living standards. Defined as the sum of exports and imports, trade increases competition and lowers world prices, which provides benefits to consumers through higher purchasing power. Increased exports support an ever-growing number of well paying jobs, offer people and firms many more markets for their goods, and raise productivity by concentrating investment in the more efficient sectors of the economy.
One natural consequence of globalized economies is the importance and interdependence of disparate supply chains. When American consumers purchase goods abroad, they are inherently supporting and contributing to emerging market development. Below is a time-series graph showing each major region of the world’s total exports of goods and services as a percentage of each respective region.
Export Growth in Latin America
As a region, Latin American and Caribbean countries have shifted their development models by adopting a higher strategic priority to increasing exports and product manufacturing. In a span of 40 years, exports volume has exploded from $60 billion in 1977 to nearly $1.4 trillion in 2019 -- a staggering 2,200% increase.
While it is true that China is the largest exporter of goods in the world, amounting to over $2.5 trillion as of 2019, it also has the largest population in the world. Another way of looking at Exports efficiency is to compare Exports per Capita. After the United States, Latin American countries such as Chile and Mexico compare quite favorably to China, indicating the region’s strength as a global leader of exported products.
With the right resources and continued investment in trade markets, we at Exporta are excited to develop even more Latin American countries as global leaders in exports and products wholesale such as Peru and Colombia.
Three Exports Markets Where Latin America is Gaining Share
Historically, Latin American’s major exports, in terms of value, have been primary commodities, including foodstuffs and plant products, fuels, and raw materials. These types of agrarian commodities include sugar, bananas, cocoa, coffee, tobacco, beef, corn, and wheat. Over the past five years, Latin America has made significant headway into more industrial-specific commodities and exports, including natural resources, wholesale fabric, and intermediate goods. (Source: World Integrated Trade Solution).
- Natural Resources
Production in precious metals, copper, and petroleum has made countries in Latin America at various periods of history among the most prosperous in the world. As a reliable trade partner, Latin America has seen measurable gains in its exports of this trade category.
Since 2016, Latin American & Caribbean exports of fuels & natural resources have outpaced those of East Asia & Pacific as shown in the graph below.
Just as in the case of natural resources, Latin America has made great progress catching up to China’s dominance in the textiles and clothing manufacturers category.
While China continues to plateau and flatten its growth curve of exports volume, Latin America continues to pick up its pace, albeit at a lower starting volume level.
- Intermediate Goods
Intermediate goods are inputs in a product. They are not the final product. For exports calculations, according to the World Integrated Trade Solution, intermediate goods are products made during a manufacturing process that are also used in the production of other goods. Wood, steel, and plastic are considered intermediate goods.
As shown above in the graph above, Latin America’s share of exports volume in the intermediate goods category is growing.
Global trade is an important piece of economic development for Latin America, and its impact on region-wide GDP has grown steadily over the past four decades. Most regions experience large swings in terms of trade’s contribution to GDP because of the unevenness of growth in other parts of the economy and over-reliance on very specific industries. Several Latin American countries operate at trade surpluses (i.e. where exports volume exceeds imports volume) including Chile, Peru, Brazil and Venezuela.
Latin American exports markets are still largely dominated by agrarian commodities, but the region’s overall increased manufacturing capacity makes it a viable alternative candidate to supplant -- or at a minimum, diversify -- the world’s over-reliance on China for its importing needs.
About Exporta Technologies
Exporta Wholesale is the largest marketplace connecting suppliers in Latin America with buyers in North America. Today, we have a network of over 5,000 Latin American suppliers serving a variety of consumer goods and product categories in the United States.
Exporta’s marketplace offers buyers a full service experience in the origination, sourcing and managing of products. The platform was founded on the idea that curation and service are the most important elements in the buyer’s journey. Exporta’s marketplace is building technology that addresses the pains of sourcing products internationally at attractive prices.