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South America's economic recovery fueled by raw material exports and an expansion of trade with China.

South America's economic recovery has been carried in part by an increase in raw materials trade with China. This puts the region "on track" to realize pre-crisis levels of trade growth.

"The South-American region is back on track to recuperate the pace of trade growth. Although there is no specific information, some of the characteristics of Latin American recuperation may become permanent for South-American countries."

"Sub-regional trade increased and China is on the path to become a central commercial partner of Latin America. Exports to China have increased from 1.1 percent of total Latin American exports in 2000 to 7.6 percent in September 2009, while exports to the United States went from 61.0 percent to 42.3 percent in the same period."

"Demand for manufactured goods and raw materials will increase as growth in industrialized economies resume, thus changing trade composition and the direction of trade. Nevertheless, countries in South America are currently more reliant on raw material exports and the increase of Chinese demand."

IFTF implications: the sustainability of raw material resources may be threatened by surging demand. The development of local sustainable economies can help to provide a bulwark against global market fluctuations that will be more keenly felt with the greater reliance on intercontinental trade.

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Sources:

Internacional Nacional Foro, March 2010, page 4:
http://newsletters.clearsignals.org/FORO_Mar2010.pdf