Revived trade with Latin America could help rouse the U.S. economy from its siesta.
Exports to Latin America soared nearly 18% in the first nine months of 1991, to $42.6 billion, from $36.2 billion in the same period last year. Latin America s in a growth mode, and the uptick partly reflects pent-up demand in the region for capital equipment and other goods made in the United States.
Besides creating jobs in the manufacturing sector, export expansion should give U.S. lenders welcome opportunities for trade financing. Alan Reynolds, director of economic research at the Hudson Institute in Indianapolis, credits the Bush administration's free-trade initiatives.
Latin America is a "potentially huge market," he said, for U.S. capital equipment and technology.
"For banks, I think there are a lot of opportunities in a number of areas," said John Harter, vice president and Latin American trade manager at Citicorp.
Argentina Back in Action
Banks finance the purchase of goods either directly with the buyer or, indirectly, through the U.S. supplier. Often, these bank loans are guaranteed by the Export-Import Bank. In most major Latin American countries, the bank's activities have increased substantially, said Richard Feeney, deputy vice president in the Latin American division.
Argentina for years had been cut off from loans backed by Export-Import Bank guarantees, but even that country is now back in the bank's good graces.
For Bank of Boston Corp., which has a big presence in Argentina, the move by the Export-Import Bank was "manna from heaven," said Ben Moyer, head of trade service and finance at the company.
Progress on Trade Pact
Friday, ahead of President Bush's planned meeting with Mexican President Carlos Salinas de Gortari, U.S. trade officials said negotiations for a free trade agreement were proceeding on the right track.
Mexico alone accounted for more than half of U.S. exports to Latin America in the first nine months of 1991. The United States had a $1.2 billion trade surplus with Mexico in that period, compared with a $1.3 billion deficit a year earlier.
