Latin America emerges as new hope

Trade surpluses with South and Central America has been increasing since 1999, while budgets surpluses with them have been in the black with respect to heavy and chemical industries, such as IT (Information Technology) and cars, since 1987.

The Bank of Korea recently reported that Korean exports bound for Latin America have rebounded sharply thanks to favorable IT and car exports since 2000, even though they shrank three years running, between 1997 and 1999. Especially, export increases in this area during January and February 2001, 36.4 percent, passed the average total export increase of 5.3 percent

Imports from Latin America spiraled downward 13.9 percent in 2000, from 30.4 percent in the previous year. And for the January and February 2001 period, the bound import rates dropped 3.2 percent, ending below the overall increase rate average of 2.0 percent.

Coming into 2001, exports bound for Latin America jumped sharply, although most other areas didn't. These export increases were led by the heavy and chemical industries, while light industrial product exports decreased. Even though exports in 1999 dropped by 2.4 percent under the influence of an relatively inactive Brazilian and Panamanian markets, exports in 2000 bound for these area turned around with an 8.4 percent increase, followed by a 36.4 percent surge in the first two months of 2001.

Brazil and Columbia are emerging as new export markets in Latin America, instead of Mexico and Panama. Taken by region, the trade surplus with Latin America has grown to be Korea's third largest, after Southeast Asia and the EU. Growth during the January to February 2001 period will make this area the source of the largest trade surplus for the period.

Korea's largest trade surplus was with Mexico with $2 billion last year, though Panama took that place from 1995 to 1998.