Ten Latin-American countries—Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Peru—account for half of the U.S.’ free trade agreement partners. 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 a number of ways. It is the largest country in the region, bordering every country in South America except Chile and Ecuador. Brazil is the only Portuguese-speaking country in the region. It is the second-largest economy in the Western Hemisphere, after the U.S., and accounts for more than 50% of Latin America’s GDP. Brazil’s economy is also more protected than those of its neighbors.
Brazil has a highly diversified economy that 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, and is a model for sustainability in increasing its agricultural production. It is also the third-largest market in the world for beauty and health care products as well as personal computers. The Brazilian middle class accounts for more than half of the country’s total population, ranking Brazil as one of the largest consumer markets in the world. Brazil is among the world’s top generators of renewable and electrical energy. Those factors, together with Brazil’s abundance of natural resources, contribute to huge growth potential that results in opportunities for U.S. companies. These are some of the reasons why more than 80% of the world’s 500 largest companies have operations in Brazil.
With continental dimensions and a population of 212 million, Brazil is among the top 10 largest economies in the World. The country has an estimated $21.8 trillion worth of natural resources, which includes vast amounts of gold, uranium, iron and timber. Economic growth from the mid-1990s until the 2008-2009 global financial crisis helped an estimated 40 million Brazilians move out of poverty and into the middle class. The pre-pandemic estimate called for 3% growth for Brazil’s economy in 2020, but GDP ended up declining by 4.1% that year. The Brazilian Central Bank’s estimates for 2021 call for 4% growth. The country is moving forward with structural reforms, including tax and administrative reforms, and is attracting investments in infrastructure by modernizing regulatory frameworks. The government’s agenda includes negotiations on the trade agreements between Mercosur and the European Union as well as the U.S.
Brazil is an industrial and agricultural giant that has natural resources in abundance, a developed industrial base, high standards in scientific research, and substantial human capital. The country is constantly investing in productivity enhancements and modernization, and offers excellent business opportunities for Wisconsin exporters in almost every industry. Of particular interest are the infrastructure, industrial and electrical machinery, agricultural equipment, medical and scientific instruments, vehicles, and construction equipment sectors. Opportunities also exist for Wisconsin companies providing products and equipment for telecommunications networks, power generation, pipelines for natural gas distribution, paving and construction of more than 17,000 km of highways and more than 600 km of railroads, as well as improvement of port infrastructures to achieve efficiency and competitiveness.
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. Chile’s exports are focused on raw mineral and agricultural products. Since it does not possess a developed manufacturing sector, it is highly dependent on imports of equipment and supplies needed in the country’s agricultural, mining, food processing and power sectors. The country is also moving more toward digitization, and sectors of interest include medical technology and financial technology, especially with the increased focus on health technology due to the COVID-19 pandemic.
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 per capita GDP of $6,190. Peru is the 29th-largest goods trading partner for the U.S. as a whole, and has dynamic mining and agricultural sectors, as well as a very favorable business environment for foreign investors with an attractive legislative and fiscal framework. Situated at the heart of Latin America, bordering Colombia, Ecuador, Brazil, Bolivia and Chile, Peru has a geographical advantage that, combined with the government’s strong free trade policy, has made the country an important business hub. It presents strong business opportunities for Wisconsin companies in the public infrastructure, water, transportation infrastructure, information and communications technology and agriculture industries.
Peru has a geographic advantage due to being situated at the heart of Latin America (bordering Colombia, Ecuador, Brazil, Bolivia and Chile), and its government’s strong free trade orientation has made the country an important business hub. A true economic miracle and one of the world’s most open and investor-friendly economies, for two decades Peru has led Latin America with an average annual growth rate of 6.0% per year between 2005 and 2017, slowing down to 2.2% in 2019.
Top prospects for Wisconsin exports to Peru include construction equipment, mining equipment, educational supplies, safety and security equipment, food processing and packaging equipment, water resources, medical equipment, biofuels and dairy. Due to the pandemic, new opportunities have opened up such as the adoption of technology to facilitate health care and business alike, including the adoption of medical technology, software as a service, digital payment methods and more.
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