Latin America’s Foreign Trade Drops to 12-Year Low: UN Agency ECLAC
RIO DE JANEIRO, BRAZIL – Latin America and the Caribbean’s foreign trade in 2020 saw its worst performance since the 2008 global financial crisis, mainly due to the COVID-19 pandemic and its impact on economies, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) said on Friday, January 22nd.
In its newly-released annual report International Trade Outlook for Latin America and the Caribbean 2020, the UN agency estimated the value of regional exports dropped 13 percent in 2020, while imports shrank by 20 percent.
Still, the drop in trade is less than the 23-percent plunge previously forecast in August, “because at that time the rebound in demand among the region’s main trading partners, and China in particular, was not yet visible,” the agency said in the report.
At a press conference launching the report, ECLAC’s Executive Secretary Alicia Barcena said, “the region has been ‘disintegrating’ in terms of trade and production since the middle of the last decade, coinciding with its lowest growth in seven decades.”
To reverse this disintegration, ECLAC recommended greater regional integration in matters of “trade, transportation and logistics infrastructure, and digital cooperation.”
“It is urgently necessary to reinvigorate regional integration to support the post-pandemic recovery,” Barcena said.
On the positive side, a rebound “in the prices for commodities and the increase in demand from the United States, China and Europe have created the conditions for an incipient recovery in regional exports since the second half of 2020,” said the report.
“However, that improvement is subject to considerable uncertainty, due to the renewed outbreaks that have occurred in numerous countries as well as slow access to vaccination,” the report added.
A breakdown of ECLAC’s 2020 estimates by region shows that Central America saw the smallest decline in exports at 2 percent, while South America and Mexico both saw trade contraction by 13 percent, and the Caribbean, by 16 percent.
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