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Trade between Australia and LatAm complement each other, says expert

Last Updated on Monday, 8 December 2014, 21:21 by GxMedia

Sydney, Dec 8 (EFE).- Bilateral trade between Australia and Latin American countries do not compete but complement each other, said in an interview with EFE Argentine economist Alexis Esposto, from the Swinburne University in Australia.

“The average growth of import and export between Australia and Brazil is 8.3 percent, with Peru 9.2 percent and with Chile 6 percent, which shows that Australia has an important market in growing economies,” Esposto added.

The economist from the Swinburne Leadership Institute commented that in Australia, Latin America is still seen as a competitor in primary products and a place full of bureaucracy and corruption, which adds to the geographic distance and cultural and linguistic differences.

He said that his analysis on bilateral trade between Australia and five Latin American countries -Argentina, Brazil, Chile, Mexico and Peru- reveals that there is an enormous scope for the two regions to grow dramatically.

According to the data presented at the university symposium, total exports between Latin America and Australia grew 3.3 times between 1993 and 2013, while imports from Chile and Mexico to Australia multiplied by 37 and 24 times respectively, during this period.

Currently the advantages offered by Latin America, which has 600 million inhabitants and 15 percent of the planet’s territory, is that it has enjoyed a large period of democracy, which has encouraged economic growth and strengthened the middle classes and their purchasing power.

“Besides, in Latin America the middle class mostly comprises of young people with high levels of human capital, which will foster growth and international interaction,” he underlined.

On its part, Australia, a country with large amount of territory but a small population, has economic niches and great technological capacity in sectors like mining and agriculture, added the economist.

He also mentioned the presence of Australian firms, like BHP-Billiton, in the Latin American region.

In an effort to bolster ties between the two regions, Esposto and his colleagues developed an aspect of leadership to encourage trade, as well as cultural and economic ties.

It promotes linguistic and cultural closeness, better knowledge of the workings of the financial systems and better airline connection, with direct flights also from Melbourne and not just Sydney.

He also considered the adoption of free trade agreements like the one Australia has with Chile since 2009 and the one being negotiated with Mexico as these pacts multiply commercial exchange.

Esposto believed that relations between Australia and Latin America was only getting better and gave the example of Australian Trade Minister Andrew Robb’s visit this week to Brazil, Chile and Peru to prove his point.

However, he admitted that “it is not moving as quickly as he would have liked because things don’t happen overnight.”