Latam: Limited impact from Brexit - Wells Fargo

Analysts from Wells Fargo, see a limited effect on Latin America from the United Kingdom leaving the European Union (EU).

Key Quotes:

“Although the Latin American region enjoyed a rebirth of economic growth driven by its external trade sector due to the commodity boom cycle that started in the early part of this century, the size of its trade to the United Kingdom remains very limited.”

“In 2015, only 1.1 percent of the region’s trade went to the U.K. Thus, the decision by the U.K. to leave the EU will have a limited effect on the Latin American region’s trade sector. More important for the region is its relationship with the EU-27, to which it sends 10.1 percent of its total exports.”

“The region remains highly pro-trade today and for now we should expect this stance to continue in the short- to medium-term. Perhaps the most potentially negative effect over the Latin American region could be a further delay in the negotiation between Mercosur and the EU, an agreement that has been stalled during the past several years but that has seen some renewed interest since the advent of the new administrations in Argentina and Brazil.”

“Perhaps the biggest negative effect over the Latin American region will be the increased uncertainty that this decision has put over the future of global trade, from which the region has benefited considerably since the turn of the century.”