Entrepreneur and business expert JD Duarte offers insight into the evolving Asian-Latin American business partnership, and what it means for the future of e-commerce.
As technology has made it easier for businesses and individuals to do business outside of their home countries, the global commerce industry has seen significant improvement over the past 20 years. Transoceanic trade is still difficult due to distance and currency, among other issues. Business operations and e-commerce expert JD Duarte offers insight into how Asia and Latin America are working together to overcome these barriers and what that means for a symbiotic relationship going forward.
Trade relations between Asia and Latin America have improved considerably over the past 200 years. It now stands at over $500 billion. Brazil remains Asia’s largest trading partner. However, other Latin American countries are also gaining ground. According to research, Brazil is responsible for $60 billion in Asian goods exported to Asia, Australia and Russia. As these countries improve their economies, Brazil is gaining ground.
Despite the increase in trade, problems of balance remain between Latin America and Asia. Simon explains that Latin America faces a large trade deficit with Asia, which now stands at more than $100 billion. Although commodities for manufacturing are the largest trade segment, Latin America is much more focused on trade in natural resources. This results in a gap between what Latin America can import and what Asia can export, as Asia has a wider range of export options.
While it is not uncommon for trade to be unequal between regions, this system is detrimental to the long-term viability of Latin America. Says Duarte, The region is desperate to promote a more balanced trade balance, as it would help boost their economies. The ability to achieve more balanced trade relations is undermined by the ongoing power struggle for dominance in the global trading market.
Latin America is unable to spend so much money on infrastructure because of this imbalance. Latin America still has 60% of its roads unpaved, compared to 46% in emerging Asia. This lack of development contributes to the trade problems that Latin America faces. Countries in the region are striving to improve their infrastructure and create policies that emphasize internal development to increase access to global trade.
Tourism could be a way to bridge this gap and create a fairer trading relationship. Over the 11-year period from 2006 to 2016, tourist arrivals to Latin America grew by an average of 6.8%. China has quickly become the largest source of global travel. The country’s outbound tourism market saw a 12% increase in 2016 alone. This resulted in an outbound tourism cost of $261 billion.
In addition, the air sector has seen improvements. Aircraft technology has come a long way in recent years, especially in terms of fuel efficiency. This helps provide faster and more direct connections between regions such as Asia or Latin America. To bring these regions closer together, new air routes are being developed. Although COVID-19 forced the suspension, the sector is slowly getting back on track.
Latin America and Asia can strengthen their trade relations if they continue to focus on policies that will improve their infrastructure. Technology must also improve in order to make it more efficient. Latin America will be able to build its economic relationship with Asia as China’s development continues.
About Jose Daniel Duarte
JD Duarte is from Heredia, Costa Rica. He has been an entrepreneur and business owner for over 20 years and splits his time between his existing operations and finding new opportunities to invest in. When he is not devoting time to his business, he spends time with his wife and two children.
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