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Latin American exports rise to record $656 billion in 2006, IDB estimates

Driven by a combination of favorable factors, Latin American exports rose by 21 percent this year to a record $656 billion, according to estimates released today by the Inter-American Development Bank.

A periodic note prepared by the IDB’s Integration and Regional Programs Department highlighted the fact that the region’s exports posted their fourth consecutive year of growth. Exports between Latin American countries themselves also saw a strong increase, rising by 25 percent to $108 billion.

According to IDB trade specialists, this year’s strong export performance was largely the result of robust economic growth in the United States and the demand for commodities from rapidly expanding Asian economies, particularly China and India.

Other factors influencing the increase were the continuing recovery of trade among sub-regional blocs such as the Andean Community (Bolivia, Colombia, Ecuador, Peru and Venezuela) and Mercosur (Argentina, Brazil, Paraguay and Uruguay), as well as the implementation of agreements between Chile and the United States and between Mercosur and the Andean Community.

However, the outlook for Latin American exports is mixed, the analysts noted, due to several negative and positive factors that will probably influence future flows.

“Looking forward, the region’s prospects of sustaining such an impressive performance seem to hang on the complex interplay between the challenges and opportunities looming in the horizon,” the report said.

Among the factors that could dampen future export growth: a downturn in the prices of key commodities such as soybeans and copper, a slowdown in the U.S. economy, intensified competition from Asian textiles and apparel, and the currency appreciation experienced by most Latin American currencies.

Those factors could be counterbalanced, at least in part, if China and India maintain their high levels of economic growth, as well as by the expanding access to U.S. and Asian markets under deals such as the Central American Free Trade Agreement and agreements signed by Chile, Mexico and Peru in the framework of the Asia-Pacific Economic Cooperation group.

For more details on regional export flows, please see the periodic note Integration and Trade in the Americas – A Preliminary Estimate of 2006 Trade.



Although during 2006 Venezuela left the Andean Community to join Mercosur the report includes Venezuela as part of the Andean Community to maintain consistency between 2005 and 2006 data.

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