South America : external trade

External trade represents a key element in South America’s economic growth. Essential imports, particularly capital and basic intermediate goods, are needed to accelerate the industrialization process. A major problem has been that exports and net external financing have not generated sufficient income to pay for those imports. Despite increases in trade, South America’s share of world trade has remained small, primarily because the volume of trade between major industrialized countries has grown at an even faster rate.

South America’s major exports, in terms of value, are mostly primary commodities, including foodstuffs and plant products, fuels, and raw materials. Within the first group the most important commodities are sugar, bananas, cocoa, coffee, tobacco, beef, corn, and wheat. Oil, natural gas, and petroleum products dominate the second group, while linseed oil, cotton, cattle hides, fish meal, wool, copper, tin, iron ore, lead, and zinc top the third group. South American manufactured goods have gained access to world markets as well. Brazil has become a significant supplier of armaments worldwide as well as an exporter of, among other products, small aircraft vehicles and shoes.

Several other countries, including Ecuador, Uruguay, Argentina, Colombia, and Chile, also increased their nontraditional exports at the end of the 20th century and the beginning of the 21st. More than one-fourth of these exports are sent to the United States, another one-fifth to western Europe, and an even smaller percentage to the rest of South America. Since the 1970s the illicit movement of drugs—particularly cocaine—which is mainly conducted from Peru, Bolivia, and Colombia, has added enormously to the value of exports from the region, despite international interdiction efforts. In the early 2000s the volume of cocaine traffic increased significantly in Venezuela, serving as a conduit to other regions of the world. Almost three-fourths of South America’s imports consist of machinery, vehicles and parts, chemicals and pharmaceuticals, paper and paperboard, textile products, and other manufactures.

About one-fourth of South America’s total imports are from the United States, one-seventh come from western Europe, and another one-seventh originate in South America. In general, South America’s foreign trade sector has been slow to diversify; it is heavily dependent on imports for domestic supplies of industrial goods and suffers from an imbalance in trade with the industrialized countries. Britannica

South America trade