Actual and Potential Trade Flows between Australia and Latin America

For decades Latin America and the Caribbean (LAC) was seen as an obscure, far-flung, yet mysterious destination, where business relations for Australian industry and consumers were challenging, complex and difficult to achieve. Of late, however, this perception appears to be changing rapidly. Trade between Australia and Latin America has grown substantially over the recent past and is beginning to capture the imagination of Australian consumers, businesses and government institutions. To that end, this article analyses the growth in trade for a number of LAC countries and pays particular attention to trade growth between Australia and five South American economies. Using Balassa's revealed comparative indices the article analyses comparative advantage, trade competitiveness and complementarity for five Latin American countries and Australia. The study shows that trade expansion and gains from trade may be achieved by promoting further trade engagement between Australia and Latin America.