With recession in Japan and the United States and a slowdown in most developed economies, Japanese companies are eager to do business with Latin America. Last year, Japanese trade with the region grew by 15 percent, spurred by a strong increase with Brazil.

“Considering the economic slowdown in advanced countries, but earlier and faster recovery expected in many Latin American emerging markets in the course of 2009, many Japanese companies are interested in Latin America for the potential business opportunities at this moment,” says Ryoji Watanabe, a Latin America researcher at the Japan External Trade Organization (Jetro), a government agency that promotes trade and investment. “Japan is also aggressive in expanding its FTA [free trade agreement] networks to the region. We expect that the economic relationship between Latin America and Japan will be further strengthened in 2009.”

Since commodities are the key import from Latin America, their price development will affect the value of imports this year, he adds. Meanwhile, exports to Mexico – a key market for exports – will be affected by the continued U.S. slowdown. “Mexico, with many Japanese electronics and auto factories for U.S. exports, will continue to be severely affected by the slowdown of the U.S. economy,” Watanabe says. “Therefore, the U.S. recovery will be crucial for Japan’s export to the region to grow.”

Last year, total trade with Latin America reached $68.1 billion, a 15.1 percent increase, according to a Latin Business Chronicle analysis of data from Jetro. Japanese exports grew by 16 percent to $40.7 billion, while imports increased by 13.8 percent to $27.4 billion. Japan maintains a strong surplus with Latin America – $13.3 billion.