On this page
- Key opportunities for exporting to Latin America
- Victorian Government support
- Advice on doing business in Latin America
Latin America and its economyDuring the last decade, Latin America has experienced sustained economic growth. The poverty rate in the region (defined as life on less than US$4 a day) decreased from 42 per cent in 2000 to 25 per cent in 2012 . By 2030, over 42 per cent of the population of Latin America is predicted to be middle class, rising from 29 per cent in 2009 . This will lead to increased demand for improved education and infrastructure.
Trade with Latin America
Over the last four years, total trade between Victoria and Latin America increased by almost 25 per cent. In 2014, the region’s total population was 594.6 million and its gross domestic product (GDP) was estimated at US$5.6 trillion in 2013 according to the World Bank. Given this strong projected growth and a vast and increasing population, opportunity exists for an expanded relationship between Victoria and Latin America.
Current and Emerging Opportunities
Key opportunities for Victorian export growth include:
- Mining (Resources Equipment and Technology Services)
- Water and Infrastructure
EducationVictoria and Latin America share strong connections through education in three key areas:
- Student mobility
- Vocational education and training capacity building
Two-way academic and student exchange between the region and Victoria has been steadily increasing.
Over recent years, the Latin American student body has significantly increased its presence in the Victorian community. Melbourne was selected as the host city for the first formal Chilean International Student Association’s first conference, which was held in September 2014 at the University of Melbourne.
As part of the Victorian Government’s International Education Strategy for Victoria 2013 – 2018, an Education Service Manager was appointed in Bogota, Colombia in September 2014, to further leverage linkages between Victorian and Latin American education institutions.
Recent international education activity includes:
- Supporting high level engagement with the Government of San Luis, Argentina, to design and implement a new vocational training system based on the Victorian model in June 2014.
- Hosting the Melbourne-Latin America Education Symposium in March 2014, which included 18 delegates across Latin America from government, academia, research bodies, vocational education institutions and development agencies, with approximately 150 representatives from Victoria’s education sector.
Mining - Resources Equipment and Technology Services (RETS)
RETS has emerged as a key priority for Victoria in Latin America. RETS companies have a strong presence in market, particularly in Santiago, Chile.
Recent RETS activity includes:
- Hosting the Chilean Mining Minister in Melbourne to give a key note address at the inaugural International Mining and Resource Conference in September 2014.
- Leading a delegation of 25 companies to Latin America’s largest mining equipment show, ExpoMin in Chile in April 2014.
Water and infrastructure
Water and infrastructure service exports are emerging as a new opportunity for Victoria in the region, particularly in Mexico.
Recent activity includes:
- Hosting two inbound delegations from Chile and Mexico in June and May 2014, including the research arm from Mexico's National Water Commission, Comisión Nacional del Agua and key influencers and irrigators from Chile's sixth region, which is known as the nation's “food bowl”.
- Leading a delegation of 23 infrastructure companies in November 2012 to Chile and Brazil.
Latin America has the largest reserves of arable land in the world and undoubtedly holds many opportunities relevant to Victorian agribusiness, particularly in the areas of agricultural research, technology, production and education.
Chile, Brazil, Colombia, Peru and Mexico are all major agricultural producers in their own right. Many of the Latin American countries are members of the Cairns Group in Australia and as such, are working with Australia to achieve greater trade liberalisation in agriculture and the abolishment of agricultural export subsidies.
Victorian Government support
The Victorian Government undertakes its trade activities in the region through its Victorian Government Business Office (VGBO) in San Francisco, which provides intelligence and support to Victorian companies wishing to export to Latin America.
Additionally, the Victorian Government announced in 2014 that it will establish a VGBO in South America, which will provide further in-market support to those interested in exporting to this region.
Doing business in Latin America
Latin American culture (whilst not homogeneous across the region) is similar to Australian culture in a number of ways. Australian firms doing business in the region often point to the common penchant for sport, barbecues, and other outdoor pursuits. The Judeo-Christian values system forms the basis of both societies and in this way, Australia has a great deal in common with Latin America.
However, pointing out the cultural similarities does not detract from the important differences in business practices. One significant difference is the importance placed on ceremony, status and relationship building in Latin America.
Relationship building is a key aspect of doing business in Latin America. Developing long-term professional relationships requires patience and respect for local due process. Informal gatherings over lunch or dinner are an important part of the process. Australian firms sometimes struggle in this regard, because of their lack of language skills and the geographic distance that limits frequent trips to the region.
The basis of this need for relationship building is that it is not until trust is established, that progress can be made. Establishing trust is about minimising risk and applies as equally to locals as it does to foreigners. Trust is important in Latin American culture and must be established at both a personal and a corporate level. This can be difficult for new, unknown firms in the market.
Regulatory and legal environment
Taxes, tariffs and import regulations for foreign businesses vary widely across the Latin American region, depending on the product and the country.
Victorian companies wishing to do business in Latin America need to comply with local laws governing business activity in their chosen market and should seek professional legal advice to assist in this process.
Get in touch
For more information, contact George Di Scala, Director, Trade Engagement – Americas.