This post is also available in: Spanish
Already a key consumer of Southern Cone agricultural goods, the Asian region is positioned to be an even more critical partner for the region’s agro-industrial suppliers in the coming years. Asia will continue to drive global population growth for the next few decades, and the Asian middle class is expected to reach 5 billion people by 2030 (Ferrando, 2013), with much of that growth led by China. Continued middle class growth in Asia will ensure high rates of demand for numerous agri-food products from the Southern Cone, including grains for human and animal consumption, meats, and certain higher-end products such as dairy, wine and fruit.
At the same time, the trade war between the US and China has resulted in a unique period of opportunity for the Latin American region, and especially for its major agricultural producers. As a result of uncertainties and challenges brought about by continued tensions between the US and China and tariffs placed on $735 billion in US and Chinese goods, China is looking to diversify its partnerships in strategic sectors, including energy and food. The Southern Cone is positioned to become an even more valuable region for China in this context, especially as concerns supply of key agricultural goods.
The countries of the Southern Cone would be well-advised to take advantage of this period of opportunity. Much could be gained at this moment from a coordinated, multi-dimensional strategy aimed at upgrading the trade-based and other aspects of the China-Southern Cone agro-industrial dynamic. New leverage afforded to the Southern Cone in its dealings with China can help to ensure greater access to Chinese markets for a range of Southern Cone products and services, or to achieve higher rates of higher-value-added production at home—an objective with clear economic and benefits for the region and less global environmental impact, presumably. Collaboration among Southern Cone governments and industry would be of particular value at this juncture, whether in terms of information sharing, to ensure the highest levels of food safety for region’s key exports (an issue of concern for Chinese consumers), to leverage the region’s still limited diplomatic and other resources in China, or in negotiation with China issues of market access.
With all of this in mind, the Inter-American Dialogue and Grupo de Países Productores del Sur (GPS) are pleased to publish “Upgrading China-Southern Cone Agro-Industrial Relations: Recommendations for the Public and Private Sectors,” which was prepared based on initial findings from an Inter-American Dialogue, CAF — Development Bank of Latin America, and Grupo de Países Productores del Sur (GPS) forum in Buenos Aires, Argentina on June 25, 2019. The event considered the various factors likely to shape China-Latin America agro-industrial relations in the years to come, including key policy and demographic developments in China and shifts in the international trade architecture. Over the course of the day, participants discussed current and potential region-wide and international efforts to upgrade agricultural ties to China.