ECLAC projects a recovery in trade for Latin America in 2024, but points out “persistent challenges”

ECLAC projects a recovery in trade for Latin America in 2024, but points out “persistent challenges”

Starting from the contraction experienced in 2023, the trade volume The global goods market is projected to grow in 2024, although it will maintain the limited dynamism that has been characteristic since the global financial crisis. This limited recovery is due to uncertainty regarding the prospects for global economic growth and an environment marked by growing protectionism, geopolitical tensions and problems in maritime transport.

Regional exports of goods will also show signs of recovery in 2024, after the slight drop in 2023, with projected growth in volume terms that will exceed that of world trade, the Economic Commission for Latin America and the Caribbean (ECLAC).

The document warns that this increase will be driven, to a large extent, “due to the increase in the export of basic products in South America”. In addition, it indicates that regional service exports are expected to grow at a double-digit rate for the fourth consecutive year, benefiting from the continued recovery of international tourism.

However, it warns that the growth of regional imports of goods and services will be more moderate compared to that of exports, lor that reflects a weakness in demand in a context of low economic growth.

Foreign trade trends

The report indicates that although Latin America and the Caribbean are the main net food exporting region worldwide, more than a quarter of its population faces moderate or severe food insecurity, and the cost of accessing a healthy diet is the highest of the world. “This problem is especially acute in the Caribbean, where high levels of tariffs and deficits in food trade persist,” the study analyzes.

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ECLAC’s objective is to promote economic and social development in Latin America and the Caribbean, as well as to strengthen cooperation between the countries of the region.

Therefore, to strengthen trade for food security, the Commission recommends progress in key areas such as trade facilitation, regulatory convergence, improving food logistics, especially in the Caribbean, and creating networks of preferential trade agreements. It also indicates that it is essential for countries in the region to collaborate in multilateral forums to highlight the role of their food exports in global food security.

“Since 2005, Latin America and the Caribbean’s exports of services have grown at a faster rate than those of goods, although they remain concentrated in tourism and few countries specialize in modern services. Regulation of trade in services is crucial for encourage this growth, and efforts to reduce restrictions in multiple forums are highlighted,” he says.

Trade recovery for Latin America

However, in 2024, ECLAC anticipates that the value of the region’s exports of goods will increase 4%, with volume growth of 5% and a price drop of 1%. Imports, for their part, will also see an increase of 4% in volume, albeit with a 2% drop in prices, resulting in a projected 2% increase in value. The recovery of foreign trade in the region it’s remarkablewith significant increases in export volume in the Caribbean, particularly driven by growth in Guyana and Suriname.

At the sector level, agricultural and agricultural products are expected to register the largest increase in export value (11%), followed by mining and oil (5%) and manufacturing (3%). In terms of trading partners, the growth in export value is expected to be greater towards China and the United States, while intraregional exports will suffer a drop.

The region also forecasts a slight 1% increase in its terms of trade in 2024, thanks to smaller drops in export prices compared to imports. However, some countries face significant challenges, especially net exporters of agricultural products such as Argentina, Paraguay and Uruguay, which will see a deterioration in their terms of trade.

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ECLAC carries out studies and provides analysis on economic, social and environmental issues in the region, offering relevant information and statistics.

ECLAC carries out studies and provides analysis on economic, social and environmental issues in the region, offering relevant information and statistics.

On the other hand, the value of services exports is projected to increase by 12% in 2024, with significant contributions from travel and modern services. Imports of services, in contrast, will only grow by 1%, reflecting the lack of economic dynamism.

In conclusion, after the drop in 2023, regional exports of goods recover in 2024, with an increase in volume that will exceed the growth of world trade. However, This performance is mainly driven by the increase in the export of basic products, while manufacturing exports continue to lag behind.

The diversification of exports and their intensification in knowledge are persistent challenges, especially in a global context of growing tensions and protectionism. The implementation of productive development policies, focused on public-private collaboration, is presented as a crucial strategy to position the region in the current reconfiguration of global value chains, the document concludes.

Source: Ambito

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