After years of trade surpluses, Latin America now imports more from Europe than it sends back. Trade volumes fell 5.5 percent over 2012.
Trade between Latin America has been challenging recently. The global financial crisis, with the austerity and economic contraction that followed in Europe, dragged down demand on the Old Continent, spelling trouble for demand for Latin America’s commodities.Nevertheless, Latin America’s demand for European goods – mainly machinery, chemicals, and other manufactured goods – continued to gain steam amid strong economic growth. In 2012, Europe posted a trade surplus with Latin America for the first time in decades – a trend that continued in 2013 according to the latest data from Latin Business Chronicle.
LBC’s data shows that bilateral trade between the two regions reached €213.3 ($293 billion) last year – 5.5 percent less than in 2012. Europeans exported 15 percent more than they imported from the region – €114.5 billion versus €98.8 billion - or a trade surplus of almost €16 billion ($22 billion).
The largest share of Europe’s trade with Latin Americas was with BrazilAt €73.1 billion ($100 billion) it makes up nearly one-third of Europe’s trade with the region. The European Union – taken as a whole – is Brazil’s largest trading partner both in terms of imports and exports, while Brazil is the EU’s ninth-largest trading partner.
It is no wonder then that Brazil has recently sought to close a long-delayed free trade agreement between the European Union and Mercosur, the trade bloc of which it is a member with Argentina, Paraguay, Uruguay, and Venezuela. Combined, the countries of Mercosur send 20 percent of their exports to the EU – making it their largest trading partner, while the trading bloc counts for 3 percent of the EU’s total trade. In the agreement, Brazil and other Mercosur countries see new markets for its efficient agricultural sector, and European countries sense a new market for their manufactured goods and a way to boost their economies.