MERCOSUR, a trading bloc made up of South American countries, was created in 1991 to promote free trade and the fluid movement of goods.

MERCOSUR bloc met in July at their 48th summit where Bolivia was officially incorporated as its sixth permanent member.  More newsworthy, particularly in light of the bloc’s troubled economic performance, there was some progress towards advancing on long-stalled trade initiatives, specifically an agreement with the EU.  These initiatives appear to show promise are in part due to mounting pressure from Brazil to gain greater market access.

Trade among member countries continues to decline with a 20.3 percent drop in the first quarter of 2015 compared to the same period last year. Last year, intra-bloc trade declined 13.1 percent.  All of the Mercosur member countries were hit with a decline in exports to other member states according to a report recently released by the Argentine Chamber of Commerce (CAC). The report highlighted the following:

  • Venezuela with a 46.3 percent decline
  • Uruguay with a 32.6 percent decline
  • Argentina with 24.9 percent decline
  • Brazil with 13.7 percent decline
  • Paraguay with a 12.5 percent decline

Intra-regional trade has not been the only problem as the overall export sector has taken a hit due to commodity prices and economic instability as well as uncertainty facing its largest member nations.

Obstacles still remain such as Mercosur’s Resolution 32/2000, which requires consensus from all members in trade issues, including bilateral agreements.  Resolution 32/2000 has been called a source of gridlock by Forbes because of the requirement of consensus from all members on all trade issues. Overcoming a culture of protectionism will also be a challenge as this has led to a countless regulations which will be difficult to reverse and will likely makes any short term gains improbable.

What does this mean for Florida? A decline in MERCOSUR bloc economies has had an impact on Florida’s overall trade numbers. Brazil, Florida’s most important trading partner, saw a decline of 11.3 percent, significantly affecting Florida exports in several sectors.  Argentina and Venezuela are also important Florida export destinations and their instability and uncertainty have also had repercussions.

But bright spots remain in Latin America. Peru, an important member of the Pacific Alliance, is growing and is well positioned for additional growth.  While the Pacific Alliance bloc is not as large – economically speaking – as MERCOSUR, its benefits from strong policies that favor increased market access and openness which will certainly generate new opportunities for Florida exporters.


Get Involved:

Learn what your business needs to know in order to successfully trade with the world’s growing economies by becoming a part of the Florida Chamber’s Global Florida program. Contact Alice Ancona today for more information.

Latin American Outlooks and What They Mean for the U.S. and Florida

The region’s economy is projected to grow only 0.1 percent this year according to economist projections. The combined forces of worsening terms of trade, a stronger dollar, a slower Chinese economy as well as economic crises in Argentina, Brazil and Venezuela are all hampering growth.


What do these changes mean for the U.S. and Florida?

  • Reduced Exports:
    Weaker demand and a stronger dollar impacting Latin American markets may result in reduced U.S. and Florida exports.
  • Decreased Tourism:  
    Stalling economies have caused tourism and business travel to the U.S. to take a hit.  Florida’s tourism industry, a crucial part of the state’s economy, may suffer.

However, there are several positive opportunities for both the U.S. and Florida within several nations:


Chile’s industrial sector remains stable for the remainder of the year. While copper demand has taken a hit, renewable energy and construction sectors are likely to be the two major growth sectors in 2015. A stable political environment, rising domestic demand for energy, and a significant pipeline of infrastructure projects are expected to drive growth in the short run.



Colombia’s industrial sector remains stable and diversified. Continued domestic demand from an increasing middle-class population and steady investment are expected to create GDP growth for the rest of the year. Reduced oil prices will have a minimal impact on growth.



Mexico seems to be a bright spot for the Americas. A steady improvement of the U.S. economy and a depreciated PESO is expected to increase Mexican exports as well as foreign investment inflows in 2015. Reformed laws which have opened up its energy sector are also expected to attract significant investment.

Even more opportunities arise from the area as a whole. Latin America, with a population of approximately 600 million people, is home to nearly 15,000 “ultra high net worth” individuals, or people with fortunes of at least $30 million, according to the luxury industry consultancy Wealth-X.

The number rose 5 percent last year, while the number of billionaires in Latin America rose to 151, a 38 percent increase resulting in the fastest growth rate for billionaires of any region on earth.

The region’s largest economies, Mexico and Brazil, remain the largest generators of growth and wealth. Mexico is the world’s second-largest market for private jets, behind the US, with Brazil poised to surpass it within the next decade, according to a recent market study by the Brazilian jetmaker Embraer.  According to the market research firm Euromonitor, the Latin American luxury market will total $26.5 billion in 2019, up 88.8 percent from 2014 boasting the strongest growth in the world.

Florida’s Agriculture Industry Benefits from International Trade

CONTACT: Edie Ousley, 850-521-1231 or 850-251-6261


TALLAHASSEE, FL. (May 12, 2015) – Nine of the top 10 markets for Florida agricultural exports are located in the Americas, according to research from the Florida Chamber’s Global Florida Program.

“The Americas present a large portion of Florida’s international trade opportunity, especially for Florida’s agriculture industry,” said Alice Ancona, Director of Global Outreach for the Florida Chamber of Commerce. “Canada continues to be Florida’s number one destination for Florida agriculture products, while Brazil continues to rank as Florida’s top trading partner and export destination. Florida has a once in a lifetime opportunity to take advantage of changing trade routes and become the global hub for international trade.”

Florida ranks eighth in the United States for “Fresh from Florida” exports of agricultural commodities, valued at an all-time record of $4.2 billion, supporting more than 109,000 jobs and representing an economic value of more than $13 billion.

Canada also tops the list as the top international country for visitors and dollars spent in Florida- with more than $4 billion spent. Growing trade relationships with countries like Chile, Colombia, Venezuela, Argentina and Peru work to create a competitive environment for Florida’s exporters – 95 percent of which are small-to-mid-sized businesses— to grow and thrive. In fact, the Florida Chamber recently led a Florida delegation along with Lieutenant Governor Carlos Lopez-Cantera, to Peru to sign a Memorandum of Understanding (MOU) to help promote trade and investment opportunities between Peru and the United States.

The impact of international trade to Florida’s economy cannot be denied. International business and foreign direct investment accounts for approximately 17 percent of Florida’s economic activity, and directly supports more than 1 million Florida jobs. Florida is the seventh largest exporter of state-origin products with Florida-origin exports totaling more than $58.6 billion and exports from Florida supporting 275,221 U.S. jobs in 2013.

“International trade is critical not only for Florida’s overall economy, but for individual families and communities across the state, as well as visiting consumers,” said  Doug Wheeler, President and CEO, Florida Ports Council. “Increasing trade creates jobs and brings a better quality of life to our state.”

The Florida Chamber’s Global Florida Program’s mission is to educate and promote business opportunities, collaborate and advance policy initiatives in each of the four major geographic regions:  Americas, Asia Pacific, Europe and Middle East/Africa. Agriculture Commissioner Adam Putnam recently sponsored the Florida World Trade Month resolution, which was signed by Governor Scott, Attorney General Pam Bondi and CFO Jeff Atwater.



The Florida Chamber of Commerce is the voice of business and the state’s largest federation of employers, chambers of commerce and associations, aggressively representing small and large businesses from every industry and every region. The Florida Chamber works within all branches of government to affect those changes set forth in the annual Florida Business Agenda, and which are seen as critical to secure Florida’s future. The Florida Chamber works closely with its Political Operations and the Florida Chamber Foundation. Visit for more information.

Brazil Industrial Output Drops for Fourth Straight Month

By David Biller

Brazil’s industrial production in June dropped for the fourth straight month as demand cools at home and in Argentina, a major export market.

Production fell 1.4 percent after revisions showed it contracted 0.8 percent in May, more than originally reported, the national statistics agency said today in Rio de Janeiro. The decline was smaller than the 2.3 percent drop in the median estimate from 38 economists surveyed by Bloomberg. Production fell 6.9 percent from the year before, versus a 7.9 percent decline forecast by analysts.

Data showing the fourth-straight decline in output come two days after leading presidential candidates courted industrial sector executives, whose confidence has hit a record low. Industry is struggling to regain its footing as higher interest rates damp domestic demand, a stronger currency makes exports less competitive, and neighboring Argentina, the largest export destination for Brazilian passenger vehicles, defaults on debt amid a deepening recession.

“We have a recession in the industrial sector, or four consecutive quarters of decline,” Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc. (GS), said by phone from New York. “It’s going to be a difficult year, given headwinds we have from Argentina that are likely to intensify after the default and still very weak domestic demand.”

Swap rates on the contract maturing in January 2017 rose nine basis points, or 0.09 percentage point, to 11.58 percent at 3:26 p.m. local time. The real strengthened 0.2 percent to 2.26 per U.S. dollar.

Auto Production

Brazil’s central bank has held the benchmark Selic (BZSTSETA) rate at 11 percent since April, after raising it from a record-low 7.25 percent in 2013 in order to stifle demand and stem inflation. The economy expanded 0.2 percent in the first quarter, half the pace of the prior three months as family consumption contracted.

Automobile production in Brazil declined 17 percent to 1.57 million units in the first six months of 2014 from a year earlier, as exports dropped 35 percent to 169,457 units, according to car manufacturers’ association Anfavea. Total exports to Argentina fell 20 percent in the same period, according to the Trade Ministry.

The economy of Argentina, which missed an interest payment this week after negotiations with creditors failed, will shrink 0.9 percent in 2014, according to analysts surveyed by Bloomberg. Brazil’s Finance Minister Guido Mantega told reporters yesterday the situation in Argentina currently has no impact on Latin America’s largest economy. Last month Brazil extended tax cuts on cars to stimulate domestic demand.

Argentina Trade

Exports to Argentina fell 22 percent in the first seven months of 2014 from last year as sales of fuel, cars and auto parts to the neighboring country dropped in July, Brazil’s Trade Ministry said in a separate report today. Argentina was Brazil’s third biggest export market through July, it said.

“There’s not much to cling to, at least because the industrial sector is one of the parts of the economy that is most exposed to any problems in Argentina,” Neil Shearing, chief emerging-markets economist at Capital Economics Ltd., said by phone from London. “Argentina is a big market, so that adds to the headwinds for industrial recovery.”

Output of capital goods fell 9.7 percent, the statistics institute said today. Production of consumer durable goods fell 24.9 percent. Of the 24 industries studied by the statistics institute, output in 18 dropped, including a 12.1 percent decline in cars and auto parts.

Industrial Confidence

Today’s better-than-expected headline figure is largely explained by downward revisions to both May and March numbers, according to Goldman’s Ramos. May output fell 0.8 percent, revised from a 0.6 percent decline, and March output dropped 0.7 percent, revised from a 0.5 percent slide.

Industrial confidence has fallen in all but one of seven months this year, and in July reached its lowest level on record, according to the National Industry Confederation, known as CNI. Brazil’s real has gained 3.9 percent in 2014, the second-best performance against the dollar among 16 major currencies tracked by Bloomberg.

Subsidized lending from state development bank BNDES has guaranteed competitive credit, and tax cuts are “fundamental” to competitiveness, President Dilma Rousseff said July 30 at an event hosted by the CNI. Aecio Neves, Rousseff’s closest challenger, said a weaker currency seems “absolutely essential” to ensure competitiveness and boost domestic output.

The June 12 to July 13 World Cup also affected industry as local governments declared public holidays on game days, according to Pedro Tuesta, an economist at 4Cast Ltd. Gerdau SA (GGB), Latin America’s largest steelmaker, saw second-quarter net income drop as the monthlong tournament led to declines of steel shipments in its Brazil unit, which represents about a third of the company’s revenue.

Rousseff’s lead over Neves in a possible second round has narrowed. She had 44 percent support to Neves’s 40 percent, according to a July 15-16 Datafolha survey published July 17. The gap of four percentage points falls within the margin of error of plus or minus two percentage points.

BRICS Meet In Brazil, Create Bloc Development Bank

Leaders of the BRICS group of emerging powers – Brazil, Russia, India, China and South Africa – have decided to create their own development bank as a counterweight to what they perceive are “western-dominated” financial organizations like the US-based World Bank and International Monetary Fund.

The move came during the BRICS Summit earlier this week in Fortaleza, Brazil. The summit comes as the five countries, whose economies together represent 18 percent of the world total, are experiencing sharp slowdowns in their once fast-paced rates of growth.

The new development bank will reportedly be based in Shanghai and is expected to be functional within two years. It will be capitalized at $50 billion, a figure that could grow to $100 billion to fund infrastructure projects. The fund would also have $100 billion at its disposal to weather economic hard times.

The new development bank’s first director will reportedly be from India.

“We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness,” the group said in a joint press release.

The BRICs leaders are now in the Brazilian capital of Brasilia, meeting with their counterparts from Argentina, Chile, Colombia, Ecuador, Venezuela and several other Latin American nations to discuss future economic and trade cooperation.

BRIC giant China is particularly interested in Latin America. After this week’s discussions, Chinese President Xi Jinping will stay in Brazil to launch a China-Latin America forum with the leaders of several regional countries including Cuba, Argentina, Ecuador, and Venezuela.

China is growing in influence in the region. Last year, the country, two-way trade with the region amounted to more than $261 billion.