Business
Italy Positive about Latin American Exports, Sees Increased Potential with Mercosur Agreement
Italy Foresees 5% Surge in Latin American Exports in 2024, Driven by Brazil and Mexico
Italian exports to Latin America's largest economies are projected to grow by approximately 5% in 2024, as Italy actively advocates for a groundbreaking European Union trade pact with several South American countries. According to the Italian export credit agency SACE, shipments to Brazil are expected to increase by 4.5% in 2024, reaching a record high of 5.3 billion euros ($5.38 billion), while exports to Mexico are set to jump by 5.5%, totaling 6.4 billion euros.
SACE identifies Brazil's re-industrialization efforts as an opportunity for Italian firms to boost machinery sales, along with favorable prospects related to environmentally friendly initiatives linked to the energy transition. The potential growth in exports could be further amplified if the European Union and the Mercosur bloc finalize their long-awaited trade agreement.
Major EU economies, including Italy and Germany, express support for the deal, contrasting with France's opposition. SACE's Americas head, Pauline Sebok, views the agreement positively, highlighting concerns about tax barriers faced by companies in Brazil, which the agency describes as a "champion of trade protectionism."
Machinery constitutes a significant portion of Italian exports to Brazil, and despite a decline in the last decade due to Brazil's industrial slowdown, SACE anticipates recovery and growth. Italy, Brazil's seventh-largest goods supplier, foresees an average export growth of 3.6% in 2025 and 2026, emphasizing Brazil's ambitions to re-industrialize and lead the energy transition.
Brazilian President Luiz Inacio Lula da Silva's commitment to boosting industrialization through incentivizing green projects aligns with SACE's positive outlook. The agency recently approved a 300 million-euro "green" loan for Raizen, supporting second-generation ethanol plants.
In Mexico, SACE attributes increased Italian exports to the recent surge in industrial investments driven by the "nearshoring" trend, with expectations of 5.5% growth in 2024. Additional growth estimates include 3.6% in 2025 and 4% in 2026, potentially reaching close to 7 billion euros. Italian companies with significant operations in Latin America, such as Enel, Telecom Italia, Fiat, and Leonardo, are poised to benefit from these export opportunities.
