- Although the contraction is less than that projected at the beginning of August last year (23%), it is the worst drop in exports since the global financial crisis of 2008-2009.
- "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," said Alicia Bárcena, ECLAC's secretary general.
- With more than 17 million infected and more than 550,000 dead, the coronavirus has hit Latin America hard, causing an economic crisis that led to a growth contraction of 7.7% in 2020.
The exports of Latin America recorded a fall of 13% in value in 2020 compared to the previous year, its worst record in more than a decade, due to the crisis generated by the COVID-19 pandemic, as reported on Friday by the Economic Commission for Latin America and the Caribbean (ECLAC). On the other side, imports shrank by 20 percent.
Although the contraction is less than that projected at the beginning of August last year (23%), it is the worst drop in exports since the global financial crisis of 2008-2009.
“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,” said Alicia Bárcena, ECLAC’s secretary general, when delivering the report on International Trade Outlook for Latin America and the Caribbean 2020, at the regional headquarters of the UN institution in Santiago.
She added that the situation is very worrying owing to the fact that intra-regional trade is the most conducive to productive diversification, internationalization of companies (especially MSMEs) and gender equality.
ECLAC pointed out that the region must advance in a shared agenda of trade facilitation, transport and logistics infrastructure, and digital cooperation, to generate synergies in key dynamic sectors.
Disaggregated by subregions, Central America exhibited the smallest drop in exports, which was 2%. Meanwhile, trade in South America and Mexico -the second economy in the region behind Brazil- showed a contraction of 13% each and the Caribbean of 16%.
Women Most Affected
With more than 17 million infected and more than 550,000 dead, the coronavirus has hit Latin America hard, causing an economic crisis that led to a growth contraction of 7.7% in 2020.
The pandemic forced governments to close borders and set restrictions on mobility that had a strong impact on foreign trade, particularly affecting women and their participation in trade.
The crisis particularly affected women workers and businesswomen linked to tourism (at the regional level and especially in the Caribbean) and the textile and clothing industry for export (in Central America and Mexico), said ECLAC.
ECLAC highlighted that at the global level, the coronavirus has intensified trade and technological tensions between the United States and China, fueled growing economic nationalism and conflict in trade relations, as well as the weakening of multilateral cooperation.
Uncertainty of 2021
In 2021, ECLAC estimates that exports will grow between 10% and 15% in value over 2020. However, Bárcena considers that the wave of outbreaks in the region and the slowness in the vaccination process have created “uncertainty” to future.
Bárcena said that 2021 will be “the year of vaccination.” It is necessary to “universalize” the delivery of vaccines and advance in an inoculation process that, he predicted, “will last several months” in the region.
The ECLAC document indicates that the improvement in the prices of basic products and the increase in demand in the United States, China and Europe have created conditions for an incipient recovery in regional exports.