U.S.-Latin American Trade: Recent Trends Page: 4 of 6
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Sur - Southern Common Market), and historically closer trade ties with Europe.2
Argentina's deep financial crisis led inevitably to severe "import compression" as
aggregate demand fell over four consecutive years and the peso devaluation took effect.
Differences in income can be an important factor explaining variations in U.S. import
consumption, but per capita gross national income (GNI) data shown in table 1 suggest
that it does not stand out as a factor in this case.
Table 1. Measures of Trade Openness for Seven Top
U.S. Trading Partners in Latin America
Trade in Goods Trade in Goods Per Capita Per Capita Per Capita
(% GDP) (% GDP) Imports from Imports from GNI 2001
1989* 2001* U.S. 1990** U.S. 2002** (PPP)#
Mexico 31.1% 54.9% $328 $956 $8,240
Brazil 9.2% 22.5% $34 $71 $7,070
Venezuela 50.5% 33.8% $254 $178 $5,590
Colombia 30.1% 30.1% $62 $84 $6,790
Argentina 11.4% 17.5% $36 $44 $10,980
Chile 51.0% 51.5% $126 $163 $8,840
Costa Rica 55.4% 70.7% $352 $783 $9,260
Data Sources: *Sum of merchandise exports and imports divided by GDP, per IMF, International
Financial Statistics. **IMF, International Financial Statistics March 2003, and U.S. Department of
Commerce. #GNI PPP - gross national income converted to international dollars using purchasing power
parity rates. An international dollar has the same purchasing power over GNI as the U.S. dollar in the
United States. World Bank, 2003 World Development Indicators, pp. 14-16.
The trade data suggest that there may be room for growth in trade between South
America and the United States. For example, Central America's total merchandise trade
with the United States amounted to $21.7 billion in 2002, compared to Brazil's $28.2
billion (appendix 1). These figures, however, represent 38% of Central America's GDP,
compared to 8% of Brazil's, suggesting significant room for growth in the latter's trade
with the United States. Trade policy changes, at the margin, could provide some of the
basis for growth in U.S.-South American trade, but they may not be huge immediately
given South America's historically small interest in the United States and the limited size
of their markets. Still, many economists believe that lowering barriers to U.S. trade with
South America and guaranteeing market access may generate long-term trade and
investment opportunities. Similarly, access to high quality U.S. exports and the large U.S.
market presents an attractive opportunity for Latin American countries, as well.
U.S.-Latin America Trade Issues
From a purely commercial perspective, market access remains an important key to
understanding U.S. goals for improving trade relations with Latin America. There are
three generally recognized components to this idea. The first involves lowering barriers
to allow improved market access for U.S. goods, an issue that varies in significance with
each country. The second is achieving market access under the same rules as other
2 For details, see: United States International Trade Commission. Market Developments in
Mercosur Countries Affecting Leading U.S. Exporters. Publication 3117, July 1998.
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U.S.-Latin American Trade: Recent Trends, report, September 24, 2003; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc806430/m1/4/: accessed January 20, 2019), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.