Caribbean countries increase trade with China, US
Exports from Latin America and the Caribbean are nearing the US$985-billion mark, reflecting growth of 13 per cent this year, according to figures released Monday.
A new report by the Inter-American Development Bank, IDB, notes that this sharp increase contrasts with the 3.3 per cent contraction in 2016.
The main explanation for this growth is the recovery in exports to China, which are up by 30 per cent, and to the United States, which grew by 10 per cent, said the IDB report 'Trade Trend Estimates for Latin America and the Caribbean'.
These two destination markets accounted for two-thirds of total growth. But a 12 per cent increase in intra-regional flows also contributed significantly to the region's trade performance.
Exports from the region grew more than total global exports, which saw a year-on-year variation of 9.7 per cent between January and September this year. This is mainly because recovering prices benefited the region relatively more than the rest of the world, on average.
For example, the price of iron increased by 26.9 per cent and that of petroleum by 23.5 per cent year-on-year between January and November 2017.
"China's purchases from the region were the most dynamic, as they largely entailed raw materials, which saw a strong upward trend," said Paolo Giordano, principal economist at the IDB's Trade and Integration Sector, who coordinated the report.
"Overall export volumes increased by four per cent, which marks the end of a long period of stagnation. However, growth was concentrated in a handful of countries."
The Caribbean's exports grew by 11 per cent, a stark contrast with the 17.6-per cent contraction of 2016.
According to the report, the Caribbean countries that took advantage of the new markets were Bahamas, Barbados, Belize, Guyana, Haiti, Jamaica, Suriname and Trinidad and Tobago.
The IDB said the increase in demand from Asia particularly benefited South American exports and to a lesser extent the Caribbean's.
US external purchases fuelled growth in exports from Mexico and some countries in Central America. The recovery in intra-regional demand was particularly strong for economies in South America and the Caribbean.
"To consolidate this incipient recovery in regional exports, there is a need to clear up uncertainties around the growth of the Chinese economy, the acceleration of the economic recovery in Latin America, and the results of market access negotiations that are currently under way with the United States and the European Union," Giordano said.