Latin America-Canada Trade

Latin America 2004

While exports to Latin America and the Caribbean from Canada continued a prolonged slide through 2003, signs of improvement in many Latin American countries' economies have experts in the trade and transportation community predicting good things for the Latin American trade in the near future.

Major Latin Economies

Thanks to stronger exports and the recovery of some of its largest economies, the region's GDP grew by 1.1 per cent in 2003 and is expected to grow 3.8 per cent in 2004.

In Brazil, high unemployment and credit costs caused South America's biggest economy to shrink for the first time in 12 years in 2003. Thanks to strong exports and expected growth in foreign investment, it is expected to grow by 3.5 per cent in 2004. Brazilian exports hit a record high in March 2004. Argentina's economy continues to grow slowly but steadily as it recovers from its worst ever recession. On the strength of surging exports, South America's second-biggest economy is expected to grow by 5.5 per cent in 2004 and another 4 per cent the following year. Imports rose 54 per cent in 2003 as the recovery saw Argentine companies increase spending on equipment to boost their output. Political instability and high unemployment continue to wreak havoc in Venezuela, where the economy shrank by over 10 per cent in 2003. The devalued currency may stimulate exports and 7 per cent growth in expected for 2004. Chile's economy grew by 3.2 per cent in 2003 with 4.3 per cent growth predicted for 2004. Chile is home to Latin America's most open economy. The country recently signed a free trade agreement with the U.S. to go along with similar agreements it has with Canada and the European Union. Peru and Colombia both had economic growth of over 3 per cent in 2003.

Canada and Latin America

The Latin America and the Caribbean region is Canada's 7th biggest trading partner. In terms of total value, Latin America accounted for 1.4 per cent ($10.31 billion) of Canada's overall $716 billion in trade for 2003. Canada's imports from Latin America totalled $6.85 billion or 2 per cent of the Canada's total imports in 2003. Canada's exports to Latin America totalled $3.46 billion or 0.91 per cent of Canada's total exports in 2003. Canada' trade deficit with Latin America is at $3.39 billion for the same period.

In 2003, exports to the Latin American region in 2003 were the lowest in 10 years, down $226 million (6.1 per cent) from 2002, and $988 million (22.2 per cent) from 2001 levels. This slide coincides with a serious drop in exports to Venezuela. Since 2001, Canadian exports to Venezuela have fallen by $525.6 million, or 63 per cent. Exports to Argentina, Cuba and the Dominican Republic are also down.

Canadian imports from Latin America and the Caribbean remained relatively steady over the last 3 years, after almost doubling from 1994 to 2000. Imports from the region went from $3.73 billion in 1994 to $6.39 billion in 2000, an increase of 84 per cent. Brazil and Chile have seen dramatic growth in sales to Canada over the last 10 years. Despite recent trade spats with Brazil, Canada's trade relationship with it is expected to continue to grow.

Brazil is Canada's largest trading partner in Latin America, with two-way trade totalling $2.88 billion in 2003. Other major partners in the regions include Chile, Venezuela, Argentina, Colombia, Cuba and Jamaica. Canada is running a trade deficit with all of these trading partners.

Canadian exports to Latin America and the Caribbean were lead by wheat, pulp and paper products, coal, dry peas and beans, computer equipment and meat products. Imports from the region were dominated by fruit and nuts, metals and minerals and oil and gas products

Challenges Ahead

Despite the overall growth predicted for the Latin American trade, a number of challenges remain for the ocean carriers and freight forwarders who serve the region.

Hamburg SÑŒd, a fixture on the Latin American trade for over a century, has fixed-day