2016 wasn’t an easy year, politically speaking. Between Brexit, the election of Donald Trump, and China’s economic slowdown, a feeling of uncertainty has blanketed international trade and investment opportunities. As seems to be the trend, developed nations have been pulling away from globalization, despite proven economic benefits.
With the US withdrawing from the Trans Pacific Partnership (TPP), many countries looking to expand their free trade relationships, particularly in Asia, have been left scrambling. But you know what they say – when one door closes, another one opens.
According to a recent article in The Diplomat, the uncertainty surrounding US free trade “allows for emerging economies to implement progressive and innovative trade initiatives to connect with non-traditional trade partners and diversify their markets.”
One such partnership that was the main point of focus was the potential for increased trade between Asia and Latin America. As explained by the article, “with over 625 million people, Latin America will demand Asia’s competitively priced products and services, while Asian businesses that have evolved and upgraded their competitiveness and capabilities will be able to supply the technology, know-how, and the capital needed to expand into Latin markets and reach new customers.”
On the other end of the spectrum, East and Southeast Asia, with its 2.2 billion population, will demand a greater diversity of products as well as raw materials to fuel growth – something Latin America has. Since 2006, there has been a steady increase in trade growth between Asia and Latin America, according to the International Trade Center, and while this type of partnership won’t come without obstacles, governments need to remain proactive when facing them.
All of this potential for new growth is good for the relocation business.
Dwellworks’ Account Management Director for LATAM, Jack Fraind, says, “Mexico is already committed to the economic connections between Latin America and Asia-Pacific. Through the corporate clients of our RMC partners, we’ve seen an increase in need for support for a full range of mobility -related services, whether short-term furnished housing in some of the developing industrial/automotive/aerospace manufacturing sectors around San Luis Potosi, or for increased expatriate assignments in commercial hubs such as Mexico City and Monterrey. Mobility volume over in the country is up year over year, despite concerns about the US/Mexico trade relations.”
Only time will tell how the drifting trade blocs will affect the global trade atmosphere between Latin America and Asia, but the potential for continued positive growth is immense.