In a world where supply chains are being rewired and geopolitics is reshaping global trade, Latin America and the Caribbean may be facing a new strategic moment. The region’s exports grew by an estimated 6.4% in 2025, driven largely by higher volumes rather than prices. But the larger question is whether this rebound marks the beginning of a structural shift or simply a temporary response to global volatility.
To better understand what is happening, in March 2026 we spoke to Paolo Giordano, a Principal Economist in the Productivity, Trade and Innovation Sector at the Inter-American Development Bank (IDB), for our LatAm Unboxed podcast. Giordano leads economic intelligence and policy research at the IDB and offered his informed perspective based on his extensive experience studying the region’s economic currents.
Below is a summary of the key insights that Paolo shared with us.
Is Latin America’s trade rebound structural or temporary?
First, Giordano noted that “the region has posted very strong trade performance last year at 6.4% overall. Certain countries have even exceeded that average amid trade disruptions anticipated last year. So I would say that our reading is that the region is facing a period of high uncertainty and volatility from a very strong standpoint and has shown notable resilience … our models indeed suggest that the region might have embarked on a transition toward a structural shift toward higher trade growth. In other words, this is not just a cyclical blip in the data; this is something that would respond to structural forces.”
That said, Giordano also observed that “it’s very clear that the outlook is highly uncertain.” In addition, he highlighted that “I think what is important to never lose sight of is that even though we might be embarking on the upward part of the cycle, structurally trade growth in the last 10 years has been quite subdued. Global trade and Latin American trade, consequently, is not growing anywhere near where it used to be before the financial crisis, which is almost 20 years ago, for sure. So that means that in the last 20 years, we have experienced slow trade growth. So even if we might be converging structurally to a growing and accelerating trade pattern, it’s still something that is not enough for the countries to drive economic growth out of trade.”
“Global trade and Latin American trade… [are] not growing anywhere near where they used to be before the financial crisis.”
Is this the right moment for Latin America to pursue an intra-regional trade agenda?
“Yes,” said Giordano, adding, “I think this is also part of something that is larger and that is part of a wider strategy that Latin America is now compelled to embrace.” He cited an observation that the Financial Times made after the pandemic: that we are experiencing a paradigm shift and that “the way to see international insertion has moved from just in time to just in case. And what that underscores is that today, internationalization strategies are not … only about cost minimization but [are] also about reducing risks.”
Market diversification is one way to manage risks, because, as Giordano observed, “if you’re too tied to only one market, if something happens in that market, well, then you have all your eggs in one basket.”
Beyond diversification, Giordano also pointed to quality upgrading as a key priority. “Quality upgrade allows you to retain more value along the value chain,” he says. For companies reviewing their role in global value chains, that ability to retain value may become as important as simply finding new markets.
How should Latin America approach global fragmentation?
Giordano stressed that Latin America needs a strong understanding of the forces driving geopolitical fragmentation. “And second, a very clear understanding of what the advantages are that they can leverage.” While closeness to the United States is an advantage, he noted that “Latin America, particularly South America, is a global player. And so, it’s very important to have a good reading of this global fragmentation, because if you’re a global player, you need to be able to edge into different markets at the same time. This is when you talk about market diversification.”
The implication is that Latin America should not see fragmentation only as a threat. It can also be a strategic opening, but only if countries and companies understand where the region fits in with the new global map and how to diversify across markets.
What are Latin America’s strategic assets how could they reshape Latin America’s long-term position?
Giordano highlighted a structural trend that has been emerging for years and may have accelerated recently: the growing importance of critical sectors. Critical minerals are one example. “The region is very rich in critical minerals,” he says, but it “still does not have all the technology and the production capacity to extract and use it in production.”
The same broader logic applies to other strategic assets. Giordano noted that Latin America is “a large supplier of clean energy” and has “one of the biggest world reserves in freshwater.” He also observed that region’s forests and biodiversity are an increasingly important critical asset. “The point I’m trying to make,” said Giordano, is that Latin America has to look beyond the cyclical movements of the markets and really look at the long-term strategic position.”
What should Latin American governments prioritize in 2026 and beyond?
Giordano identified several priorities. The first is a solid macroeconomic framework. “The macro framework needs to be in place,” he said. “Monetary policies need to be credible, and our spreads have been at historical lows. And that’s important. Fiscal frameworks need to be sound.”
“Latin America has to look beyond the cyclical movements of the markets and really look at the long-term strategic position.”
The second priority is promoting productivity-enhancing policies. This is a broad agenda. Giordano mentioned innovation, decarbonization, digitalization, artificial intelligence, competition, labor markets and climate resilience. Regional integration is also part of the productivity agenda because, as he put it, it is “a way to enlarge the markets at home before you go global.”
The logic is consistent across these priorities: Latin America needs stronger foundations at home to better take advantage of opportunities abroad. Trade growth, regional integration and productivity are not separate conversations. They are connected parts of the same long-term challenge.
How can LatAm companies separate the noise from the signal?
Giordano’s main recommendation for companies operating in the region was simple but important: in uncertain and muddy waters, companies need a good reading of what is happening. “I think the first thing that company must do in these uncertain and muddy waters is, first of all, have a good reading of what’s going on,” he says.
“I think that governments in Latin America and the Caribbean really need to adopt a new mindset. And the new mindset really is about seeing productivity at home and competitiveness abroad as two sides of the same coin.”
He recognizes that this can be difficult for firms focused on their core business. “Sometimes it’s very difficult to really interpret those trends,” Giordano says. “And that’s why I think programs like yours are very important, because they help companies to unpack those trends and really separate the noise from the signal. And so I would say that separating the noise from the signal is very crucial at this juncture.”
Ready to Separate the Signal from the Noise?
Contact us to understand how shifting trade patterns, regional integration, and supply chain diversification could affect your growth strategy in Latin America.
AMI helps companies identify where trade flows are changing, which regional markets are becoming more attractive, which sectors are gaining strategic importance and where logistics, policy or productivity gaps could create risk. With market sizing, opportunity benchmarking, competitive intelligence, customer research and strategic planning, AMI helps companies grow, measure and protect their business in a changing Latin American trade environment.
Note: This analysis was adapted from an episode of LatAm Unboxed, AMI’s podcast for leaders tracking logistics, supply chain and industrial trends in Latin America. Listen to the full episode or explore more conversations from LatAm Unboxed.
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