Traveling with a lorry full of Brazilian-made cars down the winding roads of Paso Internacional Los Libertadores into Chile reveals the challenges of trade within Latin America. The journey is fraught with delays, as workers frequently stop to repair the road damaged by snow, ice, and avalanches. It’s not uncommon for the lorry to come to a halt four times on this perilous route, with drivers taking the opportunity to smoke and gaze at the towering peaks surrounding them. Despite a gradual increase in international trade within Latin America over the past two decades, the region still lags behind most emerging markets.
Excluding Mexico’s strong manufacturing sector for exports to the United States, the situation is even more dire. In South America, the value of goods traded accounts for less than 30% of GDP, whereas in other emerging markets it typically represents around 50% of GDP. The lack of infrastructure and logistical challenges make it difficult for businesses to move goods across borders, which hampers economic growth and development in many countries across the region. Border officials estimate that there is at least one crash a week on this busy trade crossing between Argentina and Chile, where winter ice limits operation to just 12 hours a day and sometimes shuts down entirely for up to 40 days a year.
