Latin America’s intraregional trade is being more affected by the COVID-19 crisis than its exports to the rest of the world.
This according to a report from the IDB which noted the number of ships departing from Latin America and the Caribbean (LAC) ports had declined considerably.
The IDB said the oil crisis will have substantial impacts on the economies of LAC countries that specialise in hydrocarbon exports.
The organisation said compared to other regions, intraregional trade in Latin America (Latam) is being significantly more affected by the COVID-19 crisis than Latam’s exports to the rest of the world.
Estimates for the first quarter of 2020 show a 7.9 per cent drop in intra-Latam flows, more than twice the rate at which its extra-regional sales have contracted at -2.1 per cent.
The IDB noted that within the European Union and Nafta, intra and extra regional trade has shrunk at similar rates, although intra-EU trade seems to be slightly more resilient.
The IDB added that measures to contain the pandemic have made in-person customs procedures extremely complex.
This has put the spotlight on how far different countries in the region have advanced with implementing electronic (paperless) documentation systems for cross-border trade, the organisation added.
The IDB said in 12 of the 16 ports in Latin America and the Caribbean, the number of cargo ship departures in April 2020 was significantly lower than in April 2019—in some cases, departures were down by more than 50 per cent.
The most significant drops were observed in the ports of Buenos Aires (Argentina), Santo Tomás (Guatemala), Guayaquil (Ecuador), and Moin (Costa Rica), the IDB said.
It added that records for the first week of May showed signs of improvement in six ports, where the rate of downturn slowed and even reversed in two cases (Santo Tomás, Guatemala, and Cristóbal, Panama).
The ports of Caucedo (Dominican Republic) and San Antonio (Chile), did not experience negative year-on-year variations in their averages for April and May, the IDB added.