Latin America and the Caribbean is a dynamic and diverse region with a total population of almost 647 million people. The rise in urbanisation has led to significant social and economic transformations and has underscored the need for improved housing, essential services and transportation. Growing industry sectors are seeking solutions that deliver higher efficiency and productivity.
Latin America offer opportunities for Victoria to diversify beyond traditional economic partners.
The Victorian Government's 2018 Globally Connected: Victoria's Latin America Trade and Investment Strategy outlines Victoria’s plan to deepen and expand the state's economic ties with the region, identifies key trends in Latin America and aligns Victoria's capabilities with in-market demands.
Many Latin American countries have demonstrated a commitment to expanding their international links through FTAs. Free trade agreements between Latin America and Australia include:
- Peru-Australia Free Trade Agreement (entered into force in 2020)
- Australia-Chile Free Trade Agreement (in force since 2009, with all tariffs removed (except sugar) since 2015)
- Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) (active since 2018, Australia, Mexico, Peru and Chile are amongst the member countries).
The Pacific Alliance, a significant economic trade bloc in the region, comprises Chile, Colombia, Mexico, and Peru. (Australia was one of the first countries to begin negotiating an FTA with the Pacific Alliance, which is currently under negotiation.)
Direct flights between Santiago and Melbourne, serviced by LATAM Airlines since 2017 have been a key driver of education, business, and investment-related travel.
Opportunities for Victorians looking to do business with Latin America
Recent surveys indicate that Latin American students have a high desire to resume their travel plans when border restrictions ease. Student recruitment is one of the main opportunities for Victorian education providers.
Victorian universities are increasingly popular among Latin American higher education students, presenting opportunities for continued growth in student recruitment from the region, generating research partnerships and integrating Victorian providers into regional scholarship programs.
There are significant opportunities for Victorian VET providers to develop partnerships in Latin America to respond to upskilling needs and plans to develop VET systems, including through tailored courses, online and onshore delivery.
Latin America’s education sector is facing an accelerated digital transformation process across all levels. K-12 and higher education providers are transitioning their systems and enhancing their delivery capability to keep up with the fast-growing demands of students and parents.
The Latin American EdTech sector has been growing fast and gaining international reputation. However, key gaps remain in the market, which present opportunities for Victorian EdTech providers with competitive advantages. EdTech providers can tap into emerging opportunities to position technological tools and platforms that will help education institutions with online teaching, improve the student experience and optimise management processes.
Mining, Engineering,Technology and Services
Latin America is a traditional mining and resources market with world class mining operations spanning across the continent. The region is a global leader in the extraction of copper, gold, silver, lithium and other minerals of significance to the world’s economy.
Over the past two decades, several world-leading Victorian-headquartered mining companies have established operations in Latin America. A growing number of Victorian mining engineering, technology and services (METS) companies are securing business opportunities in the region with the support of the Victorian Government's Trade and Investment (VGTI) office in Santiago, participating in trade promotion activities such as trade missions, acceleration programs and bespoke business development support.
Key markets in the region include:
- Chile – the world’s top copper producer
- Peru – a leading silver, copper and gold powerhouse
- Brazil – Australia’s key iron ore competitor
- Mexico – a traditional gold and silver mining jurisdiction.
Other emerging markets include Ecuador, Panama and Argentina – a complex market with significant untapped potential.
Latin America is home to one-quarter of the world’s arable land and one-third of global freshwater resources. Agriculture is a key economic activity across much of Latin America, accounting for around 20 per cent of the region’s GDP including downstream and upstream related activities (FAO, 2019). The region is home to the world’s largest exporters of wheat, maize, soybeans, sugar and beef.
Latin America is a highly diverse agribusiness market in terms of climate, topography, type of crops and size and level of sophistication of operations. Exporters of agriculture technology and services must adopt a focused market entry strategy.
The agribusiness sector in key Latin American markets, including Brazil, Argentina, Chile, Peru and Uruguay is capital-intensive and operated by highly sophisticated and competitive corporate players, which have successfully integrated into global agri-food supply chains. These operators are early technology adopters and are increasingly seeking to improve productivity, sustainable farmland management and traceability applications.
The combination of consistent signs of growth in the agribusiness sector across these key markets, higher quality, sustainability and traceability standards in destination markets as well as cost-efficiency pressures are likely to continue to increase the demand for products and services in the following areas:
- Precision agriculture technologies.
- Irrigation and water resource management.
- Crop monitoring.
- Pest control.
- Image generation and treatment.
- Soil analysis.
- Research commercialisation and education.
As middle-class populations in Latin America expand, the demand for convenient and premium products grows. The impacts of diet-related conditions such as obesity and heart disease are projected to increase, which has spurred the demand for healthy products. There is a clear opportunity to respond to these drivers by further integrating Victorian food exports and processed food expertise into Latin American supply chains.
Latin America’s digital landscape is transforming rapidly. The region has the highest rate of urbanisation in the world and fast-growing levels of connectivity. Over 70 per cent of the population has access to the internet and the region is the second fastest-growing mobile phone market in the world. A social media-savvy, sophisticated consumer market presents opportunities for digital technologies across a range of segments, including fintech, HR tech and eCommerce.
Between 2018 and 2020, the region has given birth to a record number of unicorns – i.e. private technology companies with a market valuation of USD$ 1 billion of more.
A number of leading Victorian technology companies have accessed significant opportunities in key Latin American markets, including in Brazil, Mexico, Chile and Argentina.
Victoria’s strong liveability and clean technology credentials position our professional services firms as ideal partners to participate in urban and regional improvement projects.
Rapid urbanisation across Latin America requires investment in water supply and sanitation, flood mitigation and public transport systems to create liveable and productive cities. Widespread open tender processes and growing interest in public private partnership (PPP) models present opportunities for Victorian infrastructure providers.
A number of Australian institutional investors have found opportunities in infrastructure investment in selected markets across the region.
Medtech, pharma and healthcare
A growing middle class and almost universal access to public health systems position Latin America as an attractive market for Victoria pharmaceutical and medical technology providers. While most countries have complex regulatory frameworks for the importation and commercialisation of healthcare products, the region is a net importer of pharma products and medical devices. For example, Brazilian imports of pharmaceutical products totalled USD $7.3 billion in 2019, while Mexico imported an equivalent to USD $4.65 billion.
Victoria's world-leading and internationally recognised medical and pharmaceutical industries are strongly positioned to meet Latin America's growing demand for healthcare, medical, pharmaceutical and biotechnology services.
- Victoria's total merchandise exports to Latin America & the Caribbean exceeded A$280 million in 2019-201
- Two-way trade between Latin America & the Caribbean and Victoria exceeded A$1.9 billion in 2019-202
- Almost 20,000 Latin American students were enrolled in Victorian educational institutions in 2019, representing close to a 300 per cent increase over the past decade3
- Latin America is the world’s most urbanised region with 80 per cent of the overall population living in cities and towns. This figure is expected to reach 90 per cent by 20504
- DFAT Pivot Table State by Country and SITC 2010-11 to 2019-20
- DFAT Pivot Table State by Country and SITC - 2010-11 to 2019-20
- International Student Data, December 2019, Commonwealth Department of Education, Skills and Employment.
- The World Bank – Data, https://data.worldbank.org/
Tim Harcourt's The Airport Economist – Latin America
We were delighted to support Tim Harcourt's insightful, informative and clever six-part series on some of Latin America's most economically robust countries.
Also known as The Airport Economist , Tim takes us deep into the heart of Chile, Peru, Brazil, Argentina, Mexico and Colombia to interview a host of guests from business leaders to farmers, and government officials to Global Victoria's representatives from the Santiago Victorian Government Trade and Investment (VGTI) office to investigate export opportunities – current and emerging – for Australian businesses looking to engage with Latin America.
Global Victoria's Senior Investment & Trade Director Natalia Gorroño, Santiago VGTI features in The Airport Economist
Watch The Airport Economist
Discover how your business can export to Latin America
- The Victorian Government Trade and Investment (VGTI) office in Santiago, Chile officially opened in October 2016. The Santiago VGTI provides tailored market intelligence, local insights and guidance for your export business. They can also connect you with overseas buyers and industry partners in Latin America.
- Latam - Diversify your growth and Austrade's market profiles provide further detail and facts about Latin American markets.
- The Victorian Government provides support to businesses through a range of grants, vouchers and assistance programs.
- The International Chamber House (ICH) in Melbourne's city centre is a business networking hub for international bilateral chambers and business associations. It provides members access to meeting rooms with video-conferencing, flexible workspaces and a function space for international business development events.
- Visit our regional insights page and read current updates from our regional specialists.
- Our Go Global export-readiness self-assessment tool will identify your business's gaps in capabilities and recommend next steps to bridge those gaps. Whether you're seeking to enter new markets, or expand into existing markets, Go Global will show you how to get there.