Japan External Trade Organization (JETRO)
Latin America's trade in goods and services in 1997 saw the total value of exports rise 11.0% on the previous year to US$326.19 billion and the total value of imports rise 17.3% to US$354.34 billion, causing the US$8.23 billion trade deficit in 1996 to expand further to US$28.15 billion. The main cause of the increase in the deficit appears to have been the marked growth in direct investment in the latter half of the 1990s. In other words, growth in imports has been largely due to growth in imports of production goods and intermediate goods/raw materials rather than consumer goods. The real GDP growth rate of the Latin American economy rose from 3.5% in 1996 to 5.3% in 1997, and the rate of growth of per capita GDP increased from 1.9% to 3.6%. Inflation is also on a downward trend, and the Latin American economy has on the whole regained its stability.
Due to the increase in the trade deficit caused by the sharp 17.3% year-on-year increase in Latin America*s imports, the current account deficit again showed signs of deteriorating, increasing a substantial 68.8% on the previous year (when it increased 10.0%) to US$59.9 billion. The balance of foreign debt increased by 2.5% on the previous year to US$644.6 billion, below the 3.5% increase registered in 1996 and the lowest percentage increase since 1991. The debt service ratio (i.e. the ratio of payments of interest and principal on outstanding debt to the value of exports of goods and services) declined from 15.2% in 1996 to 14.4% in 1997, the lowest it has been for over a decade. The expansion of regional economic blocs in Latin America gathered momentum as numerous agreements were concluded on free trade and regional economic integration. An examination of intra-regional trade shows that there was strong growth in each of the regional economic blocs, with trade in the G3 countries up 16.3%, trade in the Andean Community up 10.6%, and trade in MERCOSUR up 12.5% (preliminary calculations based on ECLAC data). MERCOSUR and the Andean Community also reached agreement in Lima in March 1998 on the framework for a new free trade zone, and Latin America is moving briskly towards economic unification facing the creation of the Free Trade Area of the Americas (FTAA) in 2005.
Japan's trade with Latin America (based on Japanese customs statistics)
grew in 1997, with exports up a substantial 18.2% on the previous year
on a U.S. dollar basis to US$21.26 billion, and imports up slightly by
0.3% to US$11.57 billion. Latin America's share of Japan's overall trade
in 1997 grew slightly on the previous year, increasing by 5.0% in terms
of export destinations (up 4.4% in 1996) and 3.4% in terms of countries
of origin (up 3.3% in 1996). Japan's main exports to Latin America were
machinery and equipment (accounting for 85.2% of exports), chemicals (5.0%)
and metals and metal products (4.4%). The main imports were raw materials
(34.3% of imports), foodstuffs (32.4%) and manufactured goods (28.2%).