Export Opportunities for Irish Exporters in Latin America
The scale and diversity of Latin America is something that Irish exporters cannot afford to ignore. Comprised of 33 countries, inhabited by over 600 million people, and with a GDP of over $5.6 trillion, Latin America is one of the few regions in the world that is still growing consistently year over year since the start of 2008 Global Financial Crisis.
According to IMF, while the region has a heightened political volatility due to a series of elections within its key economies, the supportive international conditions and improving fiscal and monetary dynamics have helped to boost the economic growth of the region and is expected to strengthen further in 2018. A recent report from The Economist also states that fixed investment growth across the region is expected to recover to 3.3%. (having fallen for a fourth consecutive year in 2017, by 0.5%) and for the aggregate unemployment rate to decline from its 2017 peak of over 9%. These trends indicate that the real GDP for the region can rise to up to 2% in 2018, up from an estimated 1.1% in 2017.
All told, exporting in Latin America is often easier said than done. As an emerging region, it has a lot of exporting opportunities for Irish companies, though a lot of difficulties may also wait for those who have not done enough research about this market. Fortunately, the Irish and Latin American people have a deep affinity with each other, as many Irish people have played vital roles in many social and political events in the region over the past few hundred years. Additionally, its close proximity to United States – which Ireland has developed strong business and political ties – is also a good indication for many Irish exporters who want to emulate that kind of relationship and success in Latin America.
Read on as we detail on this post facts and figures that will help you to understand the actual value Latin America has to offer for Irish exporters.
The Pacific Alliance: Mexico, Colombia, Peru and Chile
Established on April 28, 2011, the Pacific Alliance is a Latin American economic and trade bloc of Chile, Colombia, Mexico and Peru. The alliance includes a Free Trade Zone between its member countries as well as Free Trade Agreements with the USA and the EU. If taken as a bloc, it is the world’s eighth-largest economy, with an accumulative GDP of US$ 1,770 billion, and US$ 3,850 billion measured in purchasing power parity – accounting for over 38% of the GPD of Latin America. It also has a population of 217 million inhabitants and a GDP per capita in excess of US$17,500.
Nominal GDP: US$ 1.046 trillion (2016 est.)
Nominal GDP Per Capita: US$ 8,201.31 (2016 est.)
Capital: Mexico City
Total Imports: US$ 417.3 billion
Top Imports: Mineral fuel and by-products, plastics and by-products, optical and medical instruments, organic and chemical products.
Nominal GDP: US$ 282.46 billion (2016 est.)
Nominal GDP Per Capita: US$ 5,805.61 (2016 est.)
Total Imports: US$ 44.68 billion
Top Imports: Petroleum and by-products, plastics, industrial and office machinery, vehicles, telecommunications, equipment, iron and steel, wheat, paper.
Nominal GDP: US$ 192.1 billion (2016 est.)
Nominal GDP Per Capita: US$ 6,045.65 (2016 est.)
Total Imports: US$ 38.8 billion
Top Imports: Petroleum and by-products, plastics, machinery, vehicles, iron and steel, wheat, paper.
Nominal GDP: US$ 247.02 billion (2016 est.)
Nominal GDP Per Capita: US$ 13,792.93 (2016 est.)
Total Imports: US$ 59.92 billion
Top Imports: Fuel, vehicles, chemical products, computers, machinery, cellular phones, corn.
The Mercosur Countries: Argentina, Brazil, Paraguay and Uruguay
Mercosur, also known as the Common Market of the South, is a trade bloc agreement that exists between the following South American countries: Argentina, Brazil, Paraguay, Uruguay, and Venezuela. The trade bloc was established under the Treaty of Asuncion in March 1991; it was then expanded under the 1994 Treaty of Ouro Preto, which set up a formal customs union. The EU is Mercosur’s biggest trading partner, accounting for 21.8% of the bloc’s total trade in 2016.
In 2017, Mercosur suspended Venezuela for indefinite period due to non-compliance with the bloc’s regulations.
As South America’s leading trading bloc, Mercosur aims to bring about the free movement of goods, capital, services and people among its member states. If taken as a bloc, it is the world’s fifth-largest economy, with an accumulative GDP of US$2,693 billion. It also has a population of 295 million people and a GDP per capita of US$8,920.
Nominal GDP: US$ 545.9 billion (2016 est.)
Nominal GDP Per Capita: US$ 12,449.22 (2016 est.)
Capital: Buenos Aires
Total Imports: US$ 60.78 billion
Top Imports: Machinery, motor vehicles, petroleum and natural gas, organic chemicals, plastics
Nominal GDP: US$ 1.796 trillion (2016 est.)
Nominal GDP Per Capita: US$ 8,649.95 (2016 est.)
Total Imports: US$ 151.9 billion
Top Imports: Machinery, electrical and transport equipment, chemical products, oil, automotive parts, electronics
Nominal GDP: US$ 27.44 billion (2016 est.)
Nominal GDP Per Capita: US$ 4,080.20 (2016 est.)
Total Imports: US$ 10.37 billion
Top Imports: Road vehicles, consumer goods, tobacco, petroleum products, electrical machinery, tractors, chemicals, vehicle parts
Nominal GDP: US$ 52.42 billion (2016 est.)
Nominal GDP Per Capita: US$ 15,220.50 (2016 est.)
Total Imports: US$ 8.74 billion
Top Imports: Refined oil, crude oil, passenger and other transportation vehicles, vehicle parts, cellular phones
The Central American Countries: Panama and Costa Rica
The countries of Panama and Costa Rica are located strategically with respect to global commerce, in the middle of North and South America. These two countries are expected to remain top priorities in Central America, and together already boast the largest share of Foreign Direct Investment into Central America.
In the case of Panama, the focus is placed on its faster headline growth, whereas in the case of Costa Rica, the focus is on strong consumer demand driven by high per capita income and steady political and macro situations.
Panama’s GDP is at US$99.43 billion in 2017, with a real growth rate of 5.3% and GDP per capita of US$24,300. Costa Rica’s GDP in 2017 is at US$85.2 billion, with a real growth rate of 3.8% and US$ 17,200 in GDP per capita.
Nominal GDP: US$ 55.19 billion (2016 est.)
Nominal GDP Per Capita: US$ 13,680.24 (2016 est.)
Capital: Panama City
Total Imports: US$ 21.22 billion
Top Imports: fuel, machinery, vehicles, iron and steel, pharmaceuticals.
- Costa Rica
Nominal GDP: US$ 57.44 billion (2016 est.)
Nominal GDP Per Capita: US$ 11,824.64 (2016 est.)
Capital: San José
Total Imports: US$ 15.55 billion
Top Imports: Raw materials, consumer goods, capital equipment, petroleum, construction materials.
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