In year-end remarks to the Inter-American Development Bank’s executive board, Luis Alberto Moreno, president of the IDB, noted that the region’s trade with Asia has grown by 20 percent since 2000, reaching $442 billion last year.
Brazil, Latin America’s largest economy, has been one of the main beneficiaries of trade with China, which supplanted the United States as Brazil’s largest trading partner in 2009.
Mainly due to China’s appetite for Brazilian commodities such as iron ore and soybeans, Brazilian exports soared to a record $256 billion; it had a trade surplus of nearly $30 billion in 2011.
But in 2012 as the Chinese economy slowed, Brazil’s trade surplus narrowed to $19.4 billion — its smallest in 10 years. For 2013, the Central Bank is projecting a $17 billion surplus but some economists are projecting it will be more diminutive.
Once the high-growth darling of Latin America, Brazil’s economy grew a mere 0.9 percent last year.
However, the World Bank foresees a better 2013, saying “the benefits of lower interest rates are expected to start kicking-in during the course of the year’’ and predicts growth in Brazil will accelerate to 3.4 percent.
Brazil remained the Miami Customs District’s main trading partner in 2012, and with the addition of flights from Miami International Airport to Manaus and Recife, MIA now serves more Brazilian destinations — seven cities — than any other U.S. airport.
Vertilux, a Doral company that sells raw materials used in the manufacture of window coverings, is among the South Florida companies that contributed to the Miami district’s record trade performance in 2012.
About 65 percent of the Doral company’s business is export, and Chief Executive José Garcia says 2013 is shaping up to be a very good year for his company.
He expects to triple sales to Brazil, although he says Brazil’s cumbersome tax and duty system make doing business with Latin America’s largest economy more expensive and challenging. “Any American company that wants to do business in Latin America should consider Brazil,’’ Garcia said, “but it is not easy to import into Brazil. Not everyone knows how to do it.’’
The best Latin American market for Vertilux now is Mexico, which was walloped during the U.S. recession because its economy is so closely tied to the United States. “But the market has been growing steadily, especially in the past two years. There are no restrictions; it’s an open market like the United States,’’ said Garcia. “While it’s easier to do business in Mexico, there is also more competition.’’
Despite drug-related violence and organized crime, analysts are optimistic about Mexico’s prospects, pointing to the emergence of a robust middleclass, price stability and a youthful population.
Rising labor rates in China may also translate into more business for Mexico. Stiff competition from Chinese factories had contained Mexican manufacturing growth. But Mexican labor costs have remained constant and “Mexico is now regaining what had been lost to China over the past decade,’’ said Jonathan Heath, chief economist at Jonathan Heath & Associates and also a professor at Universidad Panamericana in Mexico City.