After years of lobbying, protests, and negotiations, the Mercosur-EU Trade Agreement was finally ratified this Friday. This agreement could significantly impact Argentina’s economic activities in the coming years. The agricultural sector is considered one of the primary beneficiaries of this free trade deal, as it expands the opportunity to export various food products to the European market, one of the most affluent in the world.

Broader Scope of the Negotiations

The Mercosur-EU Trade Agreement goes far beyond agriculture. It includes chapters on Market Access, Rules of Origin, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Defense, Subsidies, Services and Establishment, Public Procurement, Intellectual Property, State-Owned Enterprises, Competition Policy, Customs and Trade Facilitation, SMEs, Transparency, Trade and Sustainable Development, Dispute Resolution, and Political Dialogue and Cooperation.

Argentina’s Ministry of Economy report states, “The EU is a desirable partner for our region. With over 500 million inhabitants and an average purchasing power of $34,000 annually, it represents about 20% of the global economy and a third of global imports.”

Opportunities for Argentine Companies

The Mercosur-EU Trade Agreement will create significant commercial opportunities for Argentine businesses. Mercosur secured larger quotas than the EU granted in other free trade agreements. The EU will offer tariff-free access to 92% of Mercosur exports, with shorter tariff reduction schedules than Mercosur’s. The average tariff on agro-industrial products exported to the EU is 12.6%.

From this perspective, the agreement is seen as an opportunity rather than a threat. The Ministry of Economy predicts that “the agreement will enable Mercosur companies to lower the cost of imported inputs, boosting their productivity and competitiveness. Consequently, the benefits will extend to many industrial sectors that can source inputs at more competitive prices.”

The Importance of the EU for Argentina

The EU is Argentina’s second-largest export destination, accounting for approximately $9 billion annually. Moreover, the EU is the largest investor in the country, with foreign direct investment (FDI) exceeding $35 billion, representing 45% of the total. The Mercosur-EU Trade Agreement is expected to strengthen this relationship further, opening new avenues for growth and investment.

Tariff Reduction Timelines and Market Access

In the chapter on market access, the Mercosur-EU Trade Agreement regulates the conditions and timelines for tariff reduction on products from both parties. The EU has committed to faster tariff reductions (with a maximum schedule of 10 years) compared to Mercosur, which will have up to 15 years to adapt its industries to the competition. This is part of a “special and differentiated treatment” approach.

Approximately 74% of EU imports from Mercosur will have tariffs eliminated immediately, with only 0.3% of trade excluded from the negotiations. Conversely, Mercosur will immediately eliminate tariffs on just 14% of products, with 9% of EU imports excluded from tariff reductions to protect sensitive sectors.

Key Benefits for Argentine Agriculture

The EU will eliminate tariffs on approximately 82% of agricultural product exports and provide partial reductions (through quotas or fixed preferences) for 17.7%. Of the 82% that will reach zero tariffs, 70% will be eliminated immediately upon the Mercosur-EU Trade Agreement’s implementation, while the remaining 12% will phase out over 4 to 10 years.

For products subject to tariff quotas, such as beef, pork, poultry, corn, milk, cheese, rice, ethanol, honey, and eggs (among others, including sugar), the EU has granted a quota of 99,000 tons for Mercosur beef, nearly doubling current export levels. Argentina, Brazil, Paraguay, and Uruguay are already the EU’s largest beef suppliers. Furthermore, the tariff under the Hilton Quota (20%) will be immediately eliminated upon the agreement’s activation.

Export Duties and Subsidies

An interesting development for Argentine agriculture is the agreement to eliminate and refrain from reintroducing export duties in reciprocal trade, albeit with specific exceptions and transition periods. The Mercosur-EU Trade Agreement also addresses the issue of export subsidies, which significantly affect agricultural trade.

The Ministry of Economy clarified that “Argentina will maintain export duties on certain products destined for the EU, as specified in an annex. For these products, maximum duty levels were established (e.g., 14% for oilseed products) or phased elimination schedules, which will be progressively implemented over four to eleven years after the agreement takes effect.”

Both parties agreed to address export subsidies through a chapter that promotes transparency and cooperation on subsidies within the World Trade Organization (WTO) framework.

Modern Customs Procedures

The EU and Mercosur are committed to implementing modern customs procedures under the Mercosur-EU Trade Agreement, including advanced technologies to streamline the release of goods, reduce operation times, and manage risks effectively. These measures include allowing documentation submission before the arrival of goods. Perishable products will receive priority treatment, and expedited claim mechanisms will be established.

Sanitary and Phytosanitary Measures

The agreement includes provisions to ensure that sanitary and phytosanitary measures do not become unjustified trade barriers. These measures are based on scientific evidence, offering Argentine products preferential access to the European market compared to other suppliers under the Mercosur-EU Trade Agreement.

Geographic Indications

The agreement also addresses geographic indications (GIs). The EU will recognize 220 Mercosur GIs, including 104 from Argentina, which could significantly benefit regional economies. Conversely, Mercosur will protect 355 EU GIs. Some iconic EU names will see phased-out usage over long grace periods, allowing products to be renamed and repositioned in markets.

Challenges and Future Implementation

Despite signing the Mercosur-EU Trade Agreement, a lengthy process still needs to be completed before it takes effect. This includes legal and formal reviews of the texts, provisional applications, and final implementation. Such processes can take months or even years. For instance, the agreement with Canada took four years to finalize, and the Mercosur deal may face even more delays, mainly due to opposition from influential EU countries like France.

Conclusion

The Mercosur-EU Trade Agreement presents substantial opportunities for Argentina’s agricultural sector, mainly through expanded access to the European market and reduced trade barriers. However, its full implementation will require overcoming political and administrative challenges. The agreement can significantly enhance Argentina’s position in global agricultural trade if successful.

Claudia Pellerano, the esteemed president of the Free Zone Council of the Americas, has been re-elected as the president of the Association of Free Zones of the Americas (AZFA). Her re-election and the Dominican Republic’s leadership of the organization was confirmed during the Ibero-American Free Zones’ XXVII Conference in Curaçao. This conference brought together a significant representation of free zones across the continent, including Spain, public institutions, regional trade associations, and multilateral organizations.

The conference, a landmark event in the free zone industry, highlighted the importance of collaboration and strategic partnerships in fostering economic growth and competitiveness. “Bringing together our key stakeholders here ensures that the topics we address will create the impact we expect and deserve. There is no greater recognition of the Association of Free Zones of the Americas’ work and its current role as an indispensable interlocutor for developing our respective countries,” Pellerano stated during her address. Her remarks underscored the importance of AZFA as a unifying force in the region’s economic landscape.

Strengthening Free Zones as Hubs of Competitiveness and Inclusion

Pellerano urged participants to support and enhance the role of free zone parks as ecosystems that drive competitiveness and inclusion. Despite global challenges, these zones continue to invest in economic development, create thousands of jobs, promote core values, and contribute to societal transformation and wealth generation.

“The continued investment and resilience shown by free zones during turbulent times demonstrate their unparalleled value to national and regional economies,” said Pellerano. She emphasized that with support from multilateral organizations and national associations, free zones could maintain their status as ideal environments for growth and development. These ecosystems drive innovation and are key enablers of sustainable development by integrating advanced technologies, promoting equitable labor practices, and fostering environmental stewardship. The Association of Free Zones of the Americas is pivotal in advancing these efforts by fostering regional cooperation and sharing best practices

Impact of Free Zones in the Americas

Free zones in the Americas are a cornerstone of economic activity. The region boasts over 800 free zone parks, housing over 12,000 companies. These zones generate over one million direct and two million indirect jobs, a testament to their significant role in regional employment. Furthermore, they have attracted more than $48 billion in foreign direct investment and contribute approximately $68.5 billion annually in exports. These figures highlight the transformative power of free zones in driving industrial development and international trade.

Claudia Pellerano emphasized the proven success of free zones, stating, “We are part of an industry that has consistently achieved technological transfers, advanced management practices, and knowledge sharing in each of our countries. This success is powered by human talent and a commitment to equity, inclusion, and well-being.” Her vision underscores the importance of nurturing talent and fostering inclusive practices as fundamental to the continued success of free zones. This goal aligns with the mission of the Association of Free Zones of the Americas.

A Platform for Networking and Knowledge Sharing

The XXVII Conference of Ibero-American Free Zones provided a unique platform for collaboration and dialogue among key industry players. Over three days, participants had the opportunity to engage with free zone operators, investors, government representatives, consultants, industry suppliers, and multilateral organizations. This exchange of ideas and best practices is expected to redefine the future of free zones in the region, enabling them to adapt to emerging global trends and challenges.

Sessions at the conference addressed various pressing issues, including digital transformation in free zones, sustainable economic practices, workforce development, and strategies to attract investment. Attendees explored innovative approaches to making free zones more attractive to investors and enhancing operational efficiency. The Association of Free Zones of the Americas continues to champion these efforts, positioning its members to lead in sustainable and technological advancements.

The presence of stakeholders from diverse sectors also emphasized the role of free zones as integrative economic models. With businesses and policymakers working in tandem, the free zone model can continue to evolve, aligning with global sustainability goals and technological advancements.

The Vision for the Future

Under Claudia Pellerano’s leadership, AZFA aims to further strengthen the role of free zones as drivers of economic and social progress. She called for collective action to ensure free zones remain competitive and relevant in a rapidly changing global economy. By fostering partnerships with multilateral organizations and leveraging regional expertise, AZFA seeks to position free zones as dynamic ecosystems that catalyze innovation, boost trade, and create opportunities for communities across the Americas.

The Association of Free Zones of the Americas envisions a future where its member organizations thrive economically and contribute meaningfully to inclusive growth and sustainable development. Pellerano concluded her remarks by expressing optimism about the future, emphasizing the untapped potential of free zones to create prosperity and drive inclusive growth. “Together, let us continue positioning free zones as one of the most effective ecosystems for development and competitiveness, ideal for the growth and advancement of our communities,” she declared.

The XXVII Conference reaffirmed free zones’ critical role in economic development and called on stakeholders to innovate, collaborate, and lead the way in shaping the future of trade and investment in the Americas. With the Association of Free Zones of the Americas at the helm, the free zone industry is poised for more significant achievements and enduring impact.

China continues demonstrating its economic power and seeking investment opportunities in Latin America. The Asian giant is now setting its sights on Peru for a megaproject that has captured global attention. The proposed bullet train in Peru will represent an estimated $7 billion investment and is poised to redefine regional transportation.

This ambitious project connects Lima, the bustling capital, with the Ica region, an agriculture, industry, and tourism hub. Spanning 323 kilometers, the train will significantly cut travel time, reducing the journey from Lima to Ica to just two and a half hours. By offering an efficient, modern transportation solution, the bullet train in Peru is expected to enhance regional connectivity, foster economic growth, and improve the quality of life for thousands of people.

Key Features of the Bullet Train Project

The bullet train in Peru will feature 15 strategically positioned stops to ensure accessibility for passengers in key areas. Locations such as Villa El Salvador, Chincha, Pisco, and Paracas have been identified for their economic and demographic importance. These stops connect urban centers with emerging industrial and tourist zones, creating a cohesive transportation network.

The project incorporates advanced electric traction technology, allowing trains to reach up to 200 km/h for passengers and 100 km/h for cargo. With a capacity to transport 45,000 passengers daily, the bullet train in Peru is set to become one of South America’s most efficient and eco-friendly transportation systems.

To overcome geographical challenges, the project includes 47 kilometers of viaducts and 32 kilometers of tunnels. These engineering marvels will navigate Peru’s diverse terrain, minimizing disruptions and enhancing safety. The focus on electric-powered trains underscores the commitment to sustainability, reducing pollution, and contributing to Peru’s environmental goals.

Benefits for Peru

The bullet train in Peru will revolutionize transportation and deliver numerous economic and social benefits. By connecting Lima to Ica, the train will boost tourism in destinations such as Paracas, known for its stunning natural reserves, and Pisco, which is celebrated for its cultural heritage. Increased accessibility to these regions will attract domestic and international visitors, supporting local businesses and communities.

The train’s cargo capacity is equally significant. Agricultural products from Ica, a key agricultural region, will be transported more efficiently to Lima, reducing costs and spoilage. This development will strengthen Peru’s agricultural exports and enhance its competitiveness in global markets.

Why Peru Is the Ideal Choice

China’s decision to construct the bullet train in Peru underscores the country’s appeal as an investment destination. Several factors make Peru an attractive choice for this monumental project:

Economic and Monetary Stability

Peru has long been recognized for its strong macroeconomic foundation. According to the Institute for Economic and Business Development (IEDEP) of the Lima Chamber of Commerce, the Peruvian sol is considered the most reliable currency in South America. This stability has cultivated a climate of trust, encouraging foreign investment and facilitating international trade.

Abundant Natural Resources

Peru’s natural resource wealth has solidified its position as a strategic destination for long-term investments. The country is a global leader in mineral production and boasts a thriving agricultural sector. These resources provide a stable foundation for economic growth and attract international investors seeking mining, energy, and agribusiness opportunities.

Strategic Infrastructure

Peru’s focus on infrastructure development has been instrumental in enhancing its connectivity. Projects like the Port of Chancay have bolstered the country’s role as a regional logistics hub. The bullet train in Peru will complement these efforts by providing a fast, reliable transportation option that links key economic regions. This integrated approach to infrastructure development supports trade, tourism, and investment.

Favorable Regulatory Environment

Peru’s transparent and stable regulatory framework fosters a welcoming environment for foreign direct investment. Policies that promote trade and protect investors’ rights have been instrumental in attracting global businesses. The government’s openness to partnerships with international companies like China’s demonstrates its commitment to sustainable development.

Global Competitiveness

Trade tensions among major economies have shifted attention toward emerging markets. Peru’s robust economy and strategic location in South America have positioned it as a key player in this dynamic landscape. The bullet train in Peru is a prime example of how global investors leverage these opportunities to create transformative projects.

Challenges and Opportunities

While the bullet train in Peru offers immense potential, it also presents challenges. The project’s $7 billion price tag is significant, requiring careful planning and execution to ensure its success. Land acquisition, environmental impact assessments, and community engagement will be critical components of the development process.

However, the opportunities far outweigh the challenges. The bullet train will create thousands of jobs during construction and operation, stimulating the economy and improving livelihoods. It will also serve as a model for sustainable transportation in the region, demonstrating how innovation and investment can drive progress.

A Vision for the Future

The bullet train in Peru represents more than just a transportation project; it symbolizes the country’s ambition to embrace modernity and innovation. Peru is tapping into global expertise and resources by partnering with China to build a world-class infrastructure system. This collaboration sets the stage for future investments, reinforcing Peru’s reputation as a destination for transformative projects.

Summary

China’s $7 billion investment in the bullet train in Peru is a testament to the country’s growing prominence as an investment destination. With 15 strategically placed stops, cutting-edge electric traction technology, and eco-friendly design, the train will connect Lima and Ica, transforming regional transportation.

Peru’s economic stability, abundant resources, strategic infrastructure, favorable regulatory environment, and global competitiveness make it an ideal location for this groundbreaking initiative. As the project unfolds, it promises to unlock new opportunities for trade, tourism, and sustainable development, solidifying Peru’s role as a leader in Latin America’s economic transformation.

The Minister of Economy, Luis Caputo, delivered an optimistic forecast for Argentina’s future at the 2024 Conservative Political Action Conference in Argentina. Speaking confidently about the nation’s economic trajectory, he stated, “Argentina will be the country with the most sustained growth in the world over the next 30 years.”

Stabilizing the Economy and Laying a Foundation for Growth

During his speech, Caputo delved into the measures the national government has implemented to stabilize the economy, promote growth, and create a foundation for long-term development. These measures, rooted in the economic policies of Javier Milei, are part of a broader strategy to position Argentina as a global leader in economic performance.

Caputo emphasized the economic challenges inherited by the current administration following the transition of power one year ago. He described the financial situation as dire, with a severe fiscal deficit, rampant inflation, a depreciating currency, and a lack of investor confidence. Addressing the magnitude of these challenges, Caputo remarked:

“If we had said that we would eliminate the scourge of the fiscal deficit in just one month, reduce real spending by 30% while still supporting the most vulnerable, end remunerated liabilities, eradicate the quasi-fiscal deficit and monetary issuance, it would have seemed incredible—but we did it.”

Tangible Results in Inflation and Currency Stabilization

Caputo highlighted a series of impressive economic results achieved within the past year. Among these, the reduction in inflation was the most striking. Retail inflation, which stood at an alarming 25% when the administration took office, has plummeted to just 2.7%. Meanwhile, once at 54%, wholesale inflation now stands at a mere 1.2%. These achievements, Caputo noted, were accomplished through the economic policies of Javier Milei, which focused on realigning relative prices—a critical but challenging task in the context of Argentina’s historically volatile economy.

“We are also ending the year with a free exchange rate lower than when we took office,” Caputo added. “No one expected this; the gap has narrowed from 200% to less than 10%.”

He argued that these accomplishments reflect prudent economic management and the government’s ability to inspire confidence in both domestic and international markets.

Strengthening Reserves and Reducing Tax Burdens

In addition to tackling inflation, the government has worked to rebuild international reserves, a critical metric for ensuring economic stability and credibility on the global stage. Caputo also emphasized the administration’s commitment to reducing taxes, a cornerstone of Javier Milei’s economic policies. These efforts have created an environment conducive to investment and entrepreneurship. He pointed out that these measures have already borne fruit, with projections for 2025 suggesting a 5% growth rate—the highest in 15 years.

“All analysts predict that Argentina will grow by 5% in 2025,” Caputo noted. “This growth will reflect not only our economic policies but also the resilience and entrepreneurial spirit of the Argentine people.”

Encouraging Private Sector Development

Caputo discussed a range of deregulations introduced by the Ministry of Economy to foster private sector growth. These measures, integral to the economic policies of Javier Milei, aim to remove bureaucratic hurdles, streamline processes, and provide businesses with the tools needed to thrive. He highlighted the recovery of credit markets through banking institutions, a development that has transformed Argentina’s financial landscape.

“We’ve gone from discussing hyperinflation to offering 30-year mortgage loans,” Caputo said, illustrating the extent to which economic conditions have improved under the current administration.

The Role of Leadership in Driving Change

The minister credited President Javier Milei for spearheading the transformation of Argentina’s economic and political landscape. Caputo described Milei as a leader who has implemented sound policies and led a cultural shift toward greater fiscal responsibility and market-oriented reforms.

“These results would not have been possible without President Javier Milei, who took up the banner to fight the cultural battle,” Caputo stated. “There is enormous global interest in investing in the real economy, and that is exclusively due to the work the President is doing.”

Caputo highlighted how the economic policies of Javier Milei have united the nation around a vision of prosperity and growth, fostering a sense of optimism among citizens and investors alike.

A Turning Point in Argentine History

Caputo concluded his address by asserting that Argentina is at a pivotal moment in its history. He described the government as having a clear mandate from the majority of the population to continue and deepen the economic policies of Javier Milei.

“We are at a turning point in Argentine history,” he said. “The Government has a mandate from the majority of the people who want us to continue and deepen this path.”

Caputo expressed confidence in the administration’s ability to win the economic, political, and cultural battles that lie ahead. He stressed the importance of maintaining momentum and ensuring that the implemented reforms continue to yield positive results.

The Road Ahead: Sustained Growth and Global Leadership

Looking to the future, Caputo reiterated his belief in Argentina’s potential to become a global leader in sustained economic growth. He outlined a vision of an Argentina that leverages its natural resources, human capital, and innovative spirit to achieve unprecedented levels of prosperity.

“Undoubtedly, we will win the economic, political, and cultural battle. Argentina will be the country with the most sustained growth in the world over the next 30 years,” he concluded, leaving the audience hopeful and determined.

The minister’s address underscored the government’s commitment to creating a stable, prosperous, and inclusive economy. With the economic policies of Javier Milei providing the foundation for bold reforms and a clear vision for the future, Argentina is poised to not only recover from its past economic challenges but also to emerge as a model of sustained growth and development on the global stage.

Summary

Argentina’s Minister of Economy, Luis Caputo, delivered an optimistic outlook for the nation’s future at the 2024 Conservative Political Action Conference, attributing Argentina’s remarkable economic turnaround to President Javier Milei’s policies. Over the past year, the administration has tackled inflation, reduced the fiscal deficit, stabilized the currency, and rebuilt international reserves. Retail inflation has dropped from 25% to 2.7%, wholesale inflation to 1.2%, and the exchange rate gap narrowed significantly. Economic reforms, including tax reductions, deregulation, and credit market recovery, have revitalized private sector growth and encouraged foreign investment. Caputo praised Milei’s leadership for driving cultural and fiscal transformations, fostering confidence in Argentina’s potential to achieve 30 years of sustained global economic growth.

China Already Ranks First on Brazil’s Import List

Even before taking office for a second term as president of the United States, Donald Trump is doubling down on his trade war with Beijing. The Republican has pledged to impose an additional 10% tariff on Chinese products on his first day in office, a measure that could have repercussions in Brazil. Experts argue that China is currently navigating an economic scenario with limited room to scale back its industrial production. If barriers to accessing one of the world’s largest markets are indeed implemented, Chinese products in Brazil will likely be redirected to countries capable of absorbing this supply.

China’s Economic Struggles and Overproduction

Brazilian industries are already assessing the risks of an influx of Chinese products in Brazil following Trump’s election, anticipating discussions about tariffs and trade defense measures. China already holds the top position on Brazil’s list of import partners. According to data from the Ministry of Development, Industry, Commerce, and Services (Mdic), Brazil purchased $52 billion worth of Chinese products in Brazil between January and October, accounting for 24% of all imports.

The reasoning behind the risk of a massive influx into Brazil’s domestic market begins with China’s internal challenges. André Saconatto, an economist and consultant at FecomercioSP, points out that Beijing has been experiencing relatively weak economic activity. A 5% growth target for the Gross Domestic Product (GDP)—considered a “blessing” in Brazil—is considered modest in China.

In recent years, Xi Jinping’s regime has shifted the economy’s focus toward technology, reducing the influence of real estate sectors, contributing approximately 25% of China’s GDP. The real estate crisis has had cascading effects on the world’s second-largest economy, impacting consumption and investment.

“People feel poorer because their savings have diminished,” says Saconatto, noting that much of Chinese household savings is tied to the real estate sector. “This has led Chinese citizens to increase their savings from current incomes, which means consuming less.” On the supply side, the Chinese regime continues to stimulate national industry, even when demand fails to keep pace. “Recent data show that industrial production is growing much faster than consumption. There’s an oversupply of goods in China,” the economist explains.

China’s Potential Shift to Developing Markets

With China producing a surplus, Trump imposing trade barriers, and Europe pursuing its protectionist agenda, Saconatto predicts that China will direct its production to developing countries like Brazil. “This is the scenario: the Chinese will try to place all these products somewhere in the world,” he states. “From fans to cutting-edge computers.”

Thiago de Aragão, director of strategy at Arko Advice, offers a similar assessment. He argues that the risk of an influx is a matter of logic, not merely circumstances. “This production will go elsewhere; it won’t stop. And it has to go to markets prepared to absorb it. In this, Brazil is a prime candidate,” he says.

The Impact on Specific Sectors in Brazil

Aragão highlights that, unlike other nations, China depends on economic growth to ensure social cohesion, which reinforces the stability of the Chinese Communist Party. In other words, Beijing will likely maintain industrial production at a certain level, even without a major buyer like the U.S.

According to him, the items likely to enter the Brazilian market en masse are “the usual ones,” ranging from steel—which already has a significant presence in Brazil’s economy—to goods popular in developing economies, such as cars, televisions, computers, cell phones, and electronics in general. “These are precisely the sectors where China has a strong capacity to dominate because they are also symbols of individual economic progress in China. If local absorption diminishes, it must occur elsewhere, and that place will likely be Brazil.”

Preparing for the Influx of Chinese Products in Brazil

Saconatto notes that Fecomercio has already warned retailers to prepare for this possibility. “We advise them: if you’re a reseller of Chinese products in Brazil, take advantage—your bargaining power is strong. If you’re a competitor, be cautious.”

However, this assessment is not unanimous in the trade sector. Felipe Tavares, chief economist at the National Confederation of Commerce of Goods, Services, and Tourism (CNC), downplays the risk of a massive influx, arguing that Brazil lacks the income and consumer market to absorb Chinese products in Brazil redirected from the U.S.

“The extent of our exposure is unlikely to change significantly,” he says. “It’s not because the U.S. stops buying electric cars that the volume in Brazil will quadruple. We don’t have the income or market capacity for that.” He believes Brazil could benefit from Trump’s policies that reinforce the importance of the Western world. “Historically, Brazil has benefited greatly from Republican policies. A more centralized trade flow within the West benefits Brazil significantly.”

Trade Defense Measures and Strategic Adaptation

According to Folha de São Paulo, the Federation of Industries of São Paulo State (Fiesp) is conducting a detailed analysis of the risks associated with this issue, considering the diverse range of industrial sectors. Rafael Lucchesi, director of industrial development and economics at the National Confederation of Industry (CNI), acknowledges that a Republican victory raises concerns about an influx of Chinese products in Brazil. Still, he emphasizes that Brazil has institutions, government mechanisms, and the ability to adapt to such scenarios.

“I think Brazil must remain vigilant to these developments and, of course, safeguard its interests. If Trump has his ‘America First’ slogan, we need to think pragmatically about ‘Brazil First,'” he says. He notes that specific sectors in Brazil have already seen increased imports of Chinese products in Brazil. Recently, the government raised import taxes on solar panels—an industry dominated by Chinese suppliers—to 25%.

Lucchesi concurs that potential barriers in the U.S. will drive China to seek alternative markets for its surplus. Therefore, he believes Brazil must accelerate its trade defense mechanisms, adding that the industrial sector will respond to perceived threats. “It’s crucial for Brazil to establish a proactive strategy, ensuring its industrial structure is safeguarded from significant impacts before addressing them retroactively.”

Proactive Strategy for Trade Defense

The Ministry of Development, Industry, Commerce, and Services stated that it is closely monitoring the international context and working internally on scenarios for foreign trade in the coming years. “The Ministry will adopt all necessary measures to promote competitiveness in the domestic market without guiding its actions and decisions by other criteria.”

Saconatto from Fecomercio predicts that Brazil will eventually impose tariffs on certain goods, starting with Chinese products in Brazil, such as cars.

“Industrial lobbying is powerful, and Brazil will end up protecting itself,” he states. “By 2025, we will likely see tariffs increase to curb this trend slightly.” He suggests Brazil take a strategic approach to absorb these Chinese products in Brazil and benefit from lower prices.

“There’s potential to align a long-term plan with selectively reducing import tariffs, focusing on machinery, energy, technology, and infrastructure. If Xi Jinping wants to subsidize us, we should thank him.”

El Salvador Launches Central America’s First Tourism Investment Guide

The Development Bank of Latin America and the Caribbean (CAF) and UN Tourism have launched the Tourism Doing Business—Investing in El Salvador guide, making El Salvador the first Central American country to offer such a comprehensive tool for attracting foreign investment in tourism. This guide highlights the nation’s strengths and attractions, including advancements in security, a skilled workforce, exceptional surfing conditions, and a sun-and-beach tourism appeal.

A Regional Initiative to Boost Tourism Investment

Since 2021, CAF and UN Tourism have collaborated to develop tourism investment guides for Latin America and the Caribbean. These guides analyze the competitiveness and investment potential of tourism sectors across the region, identifying key opportunities to attract foreign investment in tourism in El Salvador and beyond. The guide emphasizes El Salvador’s diverse offerings: pristine beaches, adventure tourism, rich culture, and gastronomy.

Economic and Social Benefits of Tourism Growth

Sergio Díaz-Granados, Executive President of CAF, expressed enthusiasm for the country’s progress. “Seeing the figures on how El Salvador has evolved excites us,” he said, highlighting its political and economic stability, infrastructure, and human talent development improvements. These factors make El Salvador a prime candidate for foreign investment in tourism in El Salvador.

A Commitment to Sustainable Tourism

The guide also underscores the country’s commitment to sustainable tourism. It outlines how tourism in El Salvador is a tool for economic growth and environmental conservation. According to Morena Valdez, El Salvador’s Minister of Tourism, the government has implemented security policies that make the country a regional benchmark. She emphasized how collaboration with the private sector fosters job creation and community development, paving the way for foreign investment in tourism in El Salvador.

Post-Pandemic Tourism Recovery

El Salvador has experienced significant post-pandemic recovery, with international visitor levels reaching new heights. Its strategic location, robust infrastructure, youthful workforce, and secure business environment have contributed to its appeal as a destination for tourists and investors alike. Natalia Bayona, Executive Director of UN Tourism, noted that El Salvador is the fourth-fastest-growing tourism market worldwide. This growth underscores the country’s readiness to attract foreign investment in tourism in El Salvador while aligning with sustainability and competitiveness goals.

Partnerships Driving Sustainable Tourism Development

Gustavo Santos, Regional Director for the Americas at the World Tourism Organization (WTO), praised tools like the investment guide for driving sustainable tourism development. He stressed that the region’s tourism sector benefits from strategic partnerships with organizations like CAF, which work to attract foreign investment in tourism in El Salvador while promoting resilience and inclusion.

Foreign Direct Investment Surges in 2023

The numbers back up these efforts. In 2023, foreign direct investment (FDI) in El Salvador reached USD 760 million—a 344% increase compared to 2022. Much of this success is tied to the government’s focus on environmental protection, climate action, and renewable energy development. Among El Salvador’s strategic initiatives, a tourism portfolio valued at USD 1 billion stands out as a critical driver for foreign investment in tourism in El Salvador.

A Competitive and Sustainable Tourism Destination

CAF’s Tourism Director, Óscar Rueda, emphasized that profitability and sustainability are the best incentives for attracting investors. He noted that El Salvador’s secure environment and stable conditions make it one of the most competitive tourism destinations in the region. These factors align seamlessly with the guide’s objective: to channel foreign investment in tourism in El Salvador in ways that promote peace, social inclusion, and environmental preservation.

Infrastructure and Connectivity Improvements

As El Salvador continues to advance its tourism sector, the government and private sector are collaborating on infrastructure and connectivity improvements. This commitment positions the country as a leader in sustainable tourism. It ensures that foreign investment in tourism in El Salvador contributes to balanced growth, benefiting local communities and preserving its natural heritage.

Setting a Precedent for Central America

By becoming the first Central American country to introduce a Tourism Investment Guide, El Salvador sets a precedent for other nations in the region. Its approach to aligning tourism growth with the Sustainable Development Goals (SDGs) provides a roadmap for attracting foreign investment in tourism in El Salvador while safeguarding its future.

Summary

El Salvador’s launch of the Tourism Doing Business – Investing in El Salvador guide marks a significant milestone in its journey toward becoming a premier tourism and investment destination in Central America. By leveraging its unique strengths—pristine beaches, rich cultural heritage, adventure tourism, and strategic geographic location—alongside robust infrastructure and an improving security landscape, the nation is well-positioned to attract substantial foreign investment in tourism. The guide highlights El Salvador’s economic potential and reflects its commitment to sustainability, inclusivity, and environmental conservation. These values align with global trends, making it a competitive choice for socially conscious investors.

Furthermore, the unprecedented growth in foreign direct investment and the country’s rise as the fourth-fastest-growing tourism market globally underscore its readiness for this transformative chapter. El Salvador’s collaboration with key international organizations, its focus on human capital development, and the alignment of its tourism initiatives with the Sustainable Development Goals solidify its leadership in the region. As the first Central American country to introduce such a guide, El Salvador is setting a benchmark for innovation and sustainability in tourism. By fostering partnerships between the public and private sectors, the nation is paving the way for a future where tourism drives economic prosperity while preserving its cultural and natural treasures.