Ten Latin-American countries—Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Peru—account for half of the free trade agreement partners of the U.S. These countries have a rapidly growing base of middle-class consumers and diversifying industries. They offer a unique combination of similar language and business cultures. These countries also have made clear commitments to opening their markets and integrating supply chains with the U.S. Brazil is unique in the region in several ways. It is the largest country in the region, bordering every cuontry in South America except Chile and Ecuador. Ranked 12th in the world with a GDP of 1.6 trillion, it accounts for more than 50% of Latin America’s GDP. Brazil is the only Portuguese-speaking country in the region. It is the second-largest economy in the Western Hemisphere, after the U.S., with the next-largest being Mexico, ranked 15th.
Brazil has a highly diversified economy and ranks as the ninth-largest in the world. The country has Latin America’s largest aerospace, automotive, oil and gas, mining, capital goods, medical equipment, and chemical industries. In addition, Brazil is the world’s second-largest exporter of food, registering an increase in agricultural production in a model of sustainability. Brazil is the third-largest market for beauty and health care products as well as personal computers. The Brazilian middle class accounts for more than 50% of the country’s total population of approximately 212 million people, making Brazil one of the largest consumer markets in the world. Brazil is also among the world’s top generators of renewable and electric energy. Those factors, together with Brazil´s abundance of natural resources, demonstrate huge potential for growth that results in opportunities for U.S. companies. These are some of the reasons why 400 of the world’s 500 largest companies operate in Brazil.
As one of South America’s most stable and secure nations, Chile is a strong economy that has emerged as a global leader in trade and investment. U.S. companies appreciate its open market policies, zero tariffs, stable democratic government, solid business practices, and low corruption. Although Chile has a population of only 18 million, its open trade and investment policies have attracted the notice of many foreign firms, and it is an important trade and investment market for U.S. and Wisconsin companies. At the same time, the small market size has led some companies to overlook Chile, presenting interesting niche markets and solid opportunities for Wisconsin companies to seize.
For many years, Chile has been one of Latin America’s most stable economies. The country leads most Latin American business rankings and possesses one of the best credit rankings in South America. With a relatively small population, it has attracted a number of well-known multinational and foreign investors with its open and competitive economy.
The Republic of Colombia is an upper-middle-income country, the fourth-largest economy in Latin America (after Brazil, Mexico, and Argentina) and has the third-largest population on the continent, with approximately 51 million inhabitants. The dominant sectors of the economy are agriculture, mining, and tourism. Being heavily impacted by the Covid-19 pandemic Colombia saw -7% GDP growth in 2020 but has improved this situation and 2021 witnessed growth of 10%. The pandemic highlighted insufficiencies in sectors besides healthcare leading to a nationwide program to increase infrastructure and education spending. In addition, stabilization in machinery and equipment investment, alongside dynamism in construction investment continue to drive GDP growth. For 2022 and 2023 growth is forecasted to be 3.8% and 3.3% respectively. GDP per capita is also forecasted to continue increasing following the pandemic. Colombia is the most industrially diverse country of the Andean Community, with four major industrial centers: Bogota, Medellin, Cali, and Barranquilla.
Colombia has 17 trade agreements with different countries and organizations. Its main export and import partners are China, the U.S., Brazil, the EU, India, and Mexico. It has free trade agreements or potential free trade agreements with all of these countries, including a free trade agreement in place since 2012 with the U.S. Additionally, being a member of MERCOSUR allows Colombia to see many economic benefits in the surrounding region.
Aside from being one of the world’s most open and investor-friendly economies, Peru has been one of the best performing economies in Latin America, with a GDP per capita of $6,190 USD. The country is an important trade and investment market for U.S. and Wisconsin companies. Peru ranks 29th among U.S. trading partners, and has dynamic mining and agricultural sectors as well as a very favorable business environment with an attractive legislative and fiscal framework for foreign investors. Peru’s geographic advantage (situated at the heart of Latin America, connecting Colombia, Ecuador, Brazil, Bolivia, and Chile) combined with the government’s strong free trade policy has made the country an important business hub.
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