Rediscovering El Dorado: Australia’s past and future trade relations with Latin America

Abstract

In spite of the massive growth in world trade, two-way trade between Australia and Latin America has not developed to the extent that could have been expected. This is in part because for decades there has been an enduring perception in Australia that Latin America (LATAM) is a difficult place to do business. Australia’s trade with Latin America has been stifled by a number of misconceptions that this paper attempts to dispel (see also Esposto 2014; Esposto & Pereyra 2013; Kath & Sanchez-Urribarri 2012; Transparency International 2014, 5; van der Eng & Kenyon 2014). The first is that, in the eyes of many Australians, doing business with Latin American countries involves dealing with stifling bureaucracies and at times corruption (Transparency International 2014). The second misconception is that Latin American countries are not complementary economies but competitors for Australian merchandise, especially in relation to mining and agricultural products (van der Eng & Kenyon 2014, 111). Indeed, this same perception appears to exist in the reverse direction; many Latin American countries similarly see Australia as an inherent competitor of merchandise trade. A third misconception is that geographical distance between the continents makes trade and sociopolitical relations difficult (Esposto & Pereyra 2013).