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Latin America Won't Escape Brexit Impact

The impact on Latin America is going to be directly tied to what the impact of Brexit is on the EU economy, says one source in this analysis on the subject.

By Natalie Dolce | nataliedolce | | Updated on July 06, 2016
FotografiaBasica / iStock FotografiaBasica / iStock
The United Kingdom’s decision to leave the European Union has created a lot of uncertainty in the world, but there is little doubt that the economic and political ripple effects caused by the Brexit vote will do harm in Latin America. According to a recent article from GlobeSt.com sister publication, ALM’s Law.com, one anticipated consequence of the vote is a decline in European trade. Should that happen, commodity prices in Latin America, which have already dropped in recent years, will fall even further, experts say. A slowdown in European trade and the ensuing slowdown in global economic growth means wealthy countries would buy less oil, minerals and other raw materials upon which Latin America’s economies depend, the article says. “The impact on Latin America is going to be directly tied to what the impact of Brexit is on the EU economy,” said Hunton & Williams corporate partner Uriel Mendieta , whose Miami-based practice includes significant cross-border work in Latin America. “The general slowdown in the economy would be No. 1 on the list because that affects commodity prices.” In addition, if Europeans and European businesses hold back on purchases and orders, it would not only affect Latin America directly, but also decrease how much material China’s manufacturing sector demands from Latin America, thereby compounding the effect. But Brexit’s impact on Latin America is not limited to commodity pricing, the article says. The vote also has likely doomed, at least in the short term, Mercosur’s attempt to establish a free trade agreement with the European Union, experts say. Click here to read the full article on the subject at Law.com.

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