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Latin American Views on Brexit

In what is the first study of its kind analysing the opinions of the six largest economies in Latin America in regard to Brexit.

Sherlock Communications in partnership with Toluna found either a mixture of confidence and confusion or of doubt and disinterest, along with a disdain for the United Kingdom’s immigration policy. While some of the results are consistent across the region — such as a blanket belief that the UK will be stronger post-Brexit — other questions produced conflicting answers across countries, including the idea that the decision to leave the European Union was a “sensible” one and that the country will be more or less influential when working alone instead of as part of a continental alliance.

Below follows brief breakdowns of current trade trends as well as attitudes towards Brexit from of each of the six countries studied:

Brexit Attitudes

UK’s international strength post-Brexit

These are the results from the specific questions below:

  • In your view does the UK leaving the EU make the UK a stronger or weaker country internationally?
  • Do you think the UK will be stronger when it comes to negotiating a trade deal with your government alone than it would be as part of the EU?

Opinions on Brexit and its impact on UK’s influence in Latin America

These are the results from the specific questions below:

  • Do you think it is a sensible decision for the UK to leave the EU?
  • Do you think the UK leaving the EU will make it more or less influential in your country and the rest of Latin America?

Future intent to purchase from UK

These are the results from the specific questions below:

  • Do you think that you (or your business) will buy more or less goods from the UK in the first 5 years after UK leaves the EU?

Perceptions of the UK’s immigration policy

These are the results from the specific questions below:

  • Do you believe the UK government treats immigrants fairly (including those from your country)?
  • Have you avoided buying a product or service originating from the UK over the past 12 months because of the UK’s treatment of immigrants?

Country Analysis

Argentina

The third largest economy in Latin America, Argentina contains immense natural resources, a diverse industrial backdrop, and an export-oriented agricultural sector.

When it comes to Brexit, however, views are divided. More than 60% of Argentine respondents believe the UK will be stronger after Brexit, yet only 32% think Britons made a “sensible” decision to leave the EU in the first place, opposed to 38% who think it was not. Add to that the fact more respondents believe the UK’s influence will diminish (34.4%) rather than grow (29%) and it points to a country unsure of where it stands on Brexit.

The Argentinians have more clarity, however, when it comes to foreign policy. More than 40% believe the British government doesn’t treat immigrants fairly and another 35% believe the UK’s immigration policy negatively impacts the country’s ability to sell its products and services. Respondents have not yet, however, hit the UK where it hurts, with only 11% saying that they have avoided buying a UK product or service in the last 12 months because of their perception of the UK’s treatment of immigrants.

Trade Insight

In 2016, Argentina was the UK’s fourth largest export market in South America. UK exports of goods were worth US$792 million (£615 million). The top UK export to Argentina is medical equipment and pharmaceuticals, while the country’s main exports are food industry waste and animal fodder.

Brazil

Brazil, with a population of 207 million, is one of the world’s most rapidly developing economies and has a GDP per head greater than both India and China. It is the largest national economy in Latin America and represents more than half of regional GDP, it is globally the eighth-largest in purchasing power parity, according to IMF 2017 estimates. It also has the fourth-highest level of income per capita in South America.

The abundant natural resources and developed industrial base, combined with high standards in scientific research and substantial human capital means that economic opportunities and development are significant.

Much like Argentina, more than 60% of Brazilians believe the UK will be stronger post-Brexit. A relative majority of 39% also believe the UK’s decision to leave Europe is “sensible” while 42% believe the country will be able to negotiate a better trade deal with Brazil when working alone rather than as part of the EU. Brazilians are, however, less passive when it comes to immigration policy, with more than one in every five respondents (22%) having avoided buying a UK product or service in the last 12 months because of their perception of the UK’s treatment of immigrants.

Trade Insight

That could hurt the UK given Brazil is traditionally the country’s most important Latin American trading partner. In 2016, the value of trade between the two countries was US$7 billion (£5.4 billion) for goods and services. The UK’s top exports to Brazil include machinery, vehicles, pharmaceuticals and chemicals, while Brazil exports soybeans, oil and iron ore to the UK.

Chile

Chile is seen to be the most competitive market in the region. With efficient governance, strong institutions, and low-levels of corruption, Chile annually climbs up the rankings on various international competitive and business indices. According to the World Bank, Chile is the easiest country in Latin America to do business.

In keeping with the rest of the region, nearly 60% of Chileans believe the UK will be stronger after exiting the EU, although only Colombia returned a higher number of respondents than Chile’s 44% who think the decision to leave Europe was “not sensible”. While it may not be viewed by Chileans as a wise move, it is deemed to put the UK at an advantage at the negotiating table, with 46% of respondents believing the UK will be stronger alone than as part of the EU when negotiating a trade deal with the Chilean Government. In terms of immigration, Chileans are generally split on the UK’s treatment of immigrants with nearly 39% thinking the government’s treatment is fair and 36% thinking the opposite.

Trade Insight

The UK is Chile’s sixth-largest foreign investor, importing the likes of copper, other metals and processed food. Meanwhile, Chile is the UK’s second-largest export destination in South America, sending crude oil, industrial machinery, cars and beverages to the coast-hugging nation. The UK’s export of goods and services in 2016 was £792 million, despite not even being among the top five investors.

Colombia

Colombia is one of Latin America’s most exciting recent success stories with sustained GDP predicted to grow over the next five years. Economic resilience and higher earning capacity have been borne out of sound economic policies, while market areas such as agriculture, transport, financial services, and construction show the most promise for immediate growth.

A continental high of 46% of Colombians believe the decision of the UK to leave the EU is “not sensible”, this despite a majority 65% of respondents believing the country will be stronger after Brexit. Only Mexico posted more positive results in terms of the UK’s post-Brexit strength. Yet while 55% of Colombians think Great Britain will be in a stronger negotiating position when working independent of the EU, it evidently comes with a price as 38% think the country will be less influential in Colombia and the rest of Latin America.

Trade Insight

There is an established business relationship between the UK and Colombia with more than 100 UK businesses operating in the country, including household names such as Virgin and BT. UK exports to Colombia are relatively small (£522 million in 2016). The top exports to Colombia from the UK are whisky, pharmaceuticals, machinery and chemicals, while Britons import fuels and mining products, ferronickel, cars, and electrical appliances.

Mexico

According to the IMF, Mexico is the world’s 15th largest economy, while World Bank analysts predict the country’s economy will be the world’s fifth-largest by 2050. Mexico, with a GDP per head larger than the rest of the BRIC (Brazil, Russia, India and China) countries, is already a manufacturing powerhouse driven by significant annual growth in the vehicle and aerospace sectors. It is responsible for more than 60% of Latin America’s manufacturing exports and benefits hugely from its network of free trade agreements, especially with the USA and Canada.

Mexicans appear to be very positive about the possible impact of Brexit on the UK, with a sizeable 70% believing the country will be stronger after splitting from the European Union. No other country in the survey returned such high figures.

Mexico also produced the highest proportion of respondents to believe the decision to exit the EU is “sensible”, with their 42% being noticeably more than the likes of Argentina, Colombia and Chile, all of whom all of whom had the majority of respondents deem it “not sensible” than “sensible”. No other country showed such belief in the UK’s potentially increased influence post-Brexit either. Almost 58% of Mexicans believe the UK will be stronger negotiators after going solo, while 46% think the UK will be more influential in Mexico and the wider Latin America region.

Trade Insight

In 2016, trade between the UK and Mexico was worth US$4.9 billion (£3.8 billion), with UK exports of goods and services to Mexico increasing to US$2.4 billion (£1.9 billion). British products have a significant presence in Mexico and many large UK companies operate in the market, including HSBC and GlaxoSmithKline. . That growth is expected to continue in the services sector, specifically retail and wholesale trade.

Peru

Peru may only be the 49th largest economy by gross domestic product (GDP), but it is one of the world’s fastest growing. Growth has averaged 5.9% during the past decade, giving Peru the leading growth rate in Latin America.

The country has huge natural resources and a commitment to free trade, positioning itself as one of the most open markets in the region. Over the past decade, Peru has benefitted from having high growth and low inflation. The tradition of both stable and prudent economic policies and structural reforms has also enabled a huge pipeline of investment projects valued at more than $38.5 billion (£30 billion) to be established.

Peruvians are almost as hopeful for the UK’s strength post-Brexit as Mexicans, with 69% of respondents thinking Great Britain will emerge stronger after splitting from the EU. Those who consider the decision “sensible” is not quite as impressive, however, with that number dropping to 40% with a further 39% deeming it “not sensible”. While 36% of Peruvians think the UK’s influence might wane, a further 38% are in direct contrast, believing not only that the country’s influence will grow but the UK will also be stronger when it comes to negotiating a trade deal with the country (51%).

Trade Insight

In 2016, trade in goods and services between the UK and Peru totalled US$719 million (£561 million The top UK exports to Peru are beverages, spirits and vinegar, boilers and machinery, and vehicles. Peru, meanwhile, benefits from commodity exports, most prominently copper, gold, petroleum and derivatives, and zinc.

International Trade in Latin America

Click on each flag for country-specific breakdown

Conclusion

In conclusion, Latin Americans are largely optimistic in regards to the UK’s prospects post-Brexit. The country’s strength and influence is generally expected to grow, while its bargaining power at the negotiating table is also largely expected to improve after leaving the European Union. Yet that does not signify that Brexit is seen as universally positive— even Mexico, which produced the most positive responses when asked if the decision to leave the UK was sensible (42%), recorded a similar number of respondents (42%) who deemed it “not sensible”.

Perceptions of and response to the UK’s immigration policy similarly differs, with the majority of Mexicans (51%) believing the British Government’s treatment of immigrants is entirely just, with Colombia, Peru and Chile in a similar agreement. Only Argentina regards it unjust, yet it is Brazilians who are keen to take action and have demonstrated the most willingness to boycott British products and services.

So, in conclusion, while ‘Brand Britain’ may be solid in Latin America, it cannot be treated as untouchable. Policy calls impact more than just the immigrants, and British businesses must bear that in mind in a post-Brexit environment.


Research conducted by Toluna, who conducted an online poll of 3000 Latin American Consumers in Brazil, Mexico, Argentina, Colombia, Peru and Chile between 17th – 18th of July 2018. Polling was conducted using QuickSurveys, Toluna’s on-demand, real-time insights platform designed for quick-turn, automated research that gives access to consumers around the world.