Download The US Contribution to Prosperity in Latin America and the Caribbean

Chamber of Commerce of
the United States of America
Association of American Chambers
of Commerce in Latin America
1615 H Street NW, Washington, D.C., 20062 • tel: +1-202-463-5485 • fax: +1-202-463-3126
The U.S. Contribution to Prosperity
in Latin America and the Caribbean:
Jobs, Trade, Investment
President George W. Bush will travel to Brazil, Uruguay, Colombia, Guatemala, and Mexico
from March 8-14, 2007. While some critics say the United States has neglected its ties to
Latin America and the Caribbean, the facts reveal a dynamic relationship that is growing by
leaps and bounds. Today more than ever, the United States is making tremendous
contributions to the advancement of Latin America and the Caribbean in job creation, trade
partnerships, and new investments.1 (In addition to the regional information below,
AACCLA has released country-specific fact sheets: http://www.aaccla.org/factsheets.html)
U.S. Companies Employ 1.6 Million People in the Region
 Across Latin America and the Caribbean, enterprises in which U.S. companies are
majority owners employ an impressive 1.6 million people, and an additional 350,000
people are employed by enterprises in which U.S. firms are partial owners. Jobs with
U.S. companies offer salaries that are well above average and excellent working
conditions.
 According to a 2006 study of investment in Brazil prepared by the Brazil-U.S.
Business Council, 193 of the Fortune 500 have invested in South America’s largest
economy. These firms directly employ about 350,000 people, and more jobs are
being created ever day. In fact, employment at these U.S. firms in Brazil has risen by
30% since 2003.2
 The indirect benefits for the local economy are tremendous. According to the
American Chamber of Commerce of Mexico, U.S. investment in the country has
generated direct and indirect employment for approximately 18 million people—
more than 40% of the country’s private sector workforce.3
 U.S. workers also benefit from this business partnership. U.S. sales to Latin America
and the Caribbean support approximately 2.5 million U.S. jobs according to
conservative estimates, or approximately one-fifth of the 12 million U.S. jobs
sustained by exports.
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Hemispheric Trade is Booming — With Benefits All Around
 More than one-fifth of U.S. exports go to Latin America and the Caribbean, and sales
are growing rapidly. Total U.S. trade with Latin America and the Caribbean surged
by 14.3% in 2006, reaching $555 billion. Exports grew by 15.8% in 2006 and imports
by 13.3%.
 While Latin America is benefiting from rapid growth in exports to Asia, the United
States continues to purchase much more of the region’s value-added products. By
contrast, China and its Asian neighbors rely on Latin America as a source of basic
commodities such as soybeans, iron ore, copper, and wood products. The upshot is
that exports to the United States generate far more jobs in the region.
 The benefits of America’s free trade agreements are impressive. Last year, exports to
the countries with which the United States has entered into new free trade
agreements since Trade Promotion Authority was restored in 2002 grew
approximately 50% faster than the overall growth in U.S. exports.
 Chile topped the hemispheric trade growth league, with a 37.5% increase in bilateral
commerce and a two-and-a-half fold increase in trade since the FTA entered into
force in 2004. In absolute terms, Mexico saw the largest dollar increase in trade with
the United States ($42 billion), with bilateral commerce topping $332 billion. U.S.
exports to Mexico have nearly quadrupled since NAFTA entered into force in 1994.
 U.S. companies are also helping Latin Americans compete around the world. Eight
out of Brazil’s top twenty exporters in 2005 were U.S.-headquartered firms. These
U.S. companies’ foreign sales account for over 10% of Brazil’s exports to the world.4
U.S. Investors Are Bullish on Latin America and the Caribbean
 U.S. companies have invested $353 billion in Latin America and the Caribbean, a sum
twenty times as large as U.S. investments in mainland China. This total includes $71
billion that U.S. firms have invested in Mexico and $32 billion in Brazil. Even in
smaller markets the trend is sharply upward.
 Partly as a result, growth has picked up smartly. The UN’s Economic Commission
for Latin America and the Caribbean (ECLAC) reports 5.3% economic growth for
the region in 2006, the fourth consecutive year of growth above 4% for the region.
The increase in the region’s per capita output should reach 15% for the 2003-2007
period.
 Across the region, inflation has been largely tamed, and fiscal deficits are mostly
under control. Latin America has also experienced a dramatic shift toward current
account surpluses that ECLAC describes as “unprecedented in the region’s economic
history for the past 50 years.”
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Latin America and China: Did You Know?
 Per capita income in Latin America and the Caribbean is twice as high as in China.
 U.S. workers, farmers and companies export four times as much to Latin America
and the Caribbean as they do to China.
 U.S. companies have invested twenty times as much in Latin America and the
Caribbean as they have in mainland China.
People’s Republic of
China
1,316 million
$2.68 trillion
Population
GDP at Current Exchange
Rates
GDP Per Capita
$2,036
U.S. Exports
$55 billion
% of Total U.S. Exports
5.3%
U.S. Direct Investment
$16.9 billion
% of Total U.S. Direct
0.8%
Investment Abroad
2006 figures (2005 for investment figures)
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Latin America and the
Caribbean
548 million
$2.26 trillion
$4,124
$223 billion
21.5%
$353 billion
17%
All data from the U.S. Bureau of Economic Analysis, Department of Commerce, unless otherwise noted.
www.brazilcouncil.org
www.amcham.org.mx
www.brazilcouncil.org
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