(Sanitized) GROWING ECONOMIC TIES WITH LATIN AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01098A000200020002-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 9, 2016
• Document Release Date: March 27, 2001
• Sequence Number: 2
• Content Type: REPORT

Approved For Release 20049'. b + T'01(68A000200020002-1
Japan's Growing Economic Tics with Latin America
SUMMARY
Japan's economic presence in Latin America is expanding rapidly as
the Japanese move to diversify their overseas markets and develop outlets
for investment capital. The Japanese have already established a small
foothold in many Latin American markets, and sales to the region should
reach US $2 billion this year, or roughly double the 1970 level.
To help boost sales and assure a stable supply of raw materials from
the region, Japan is providing relatively large amounts of capital to Latin
American countries. Since the start of 1972, private and government sources
have made available about S2 billion in medium-term and long-term loans
to finance purchases of Japanese goods.
Much of Japan's economic interest in Latin America is concentrated
in Brazil and Mexico. Most investments made to date are in Brazil, and
one-third of Japan's trade with Latin America involves Brazil and Mexico.
The Japanese, however, also are expanding their trade and economic ties
in other countries such as Peru, Colombia, Argentina, and even Cuba. By
and large, the Latin American countries have encouraged Japan to expand
its economic involvement in the area, in some instances viewing it as a
way to reduce their still very heavy dependence on the United States.
Japan's Presence in Latin America
1. Japan's economic position in Latin America is changing rapidly.
During most of the period after World War II, involvement in the region
was negligible, largely because Japanese firms were concentrating on
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boosting sales to other markets while viewing Latin America primarily as
a source of raw materials. By the mid-1960s, Japanese sales to Latin America
amounted to only about S400 million( annuwily, while imports totaled
about $700 million. Investment in the region %%3s practically non-existent.
2. Since the mid-I960s, trade and investment have expanded sharply.
Two-way trade nearly tripled by 1972 to about 3 billion as Japanese firms
moved aggressively to exploit marketing opportunities in the region. For
many Latin American countries, Japan is now the second largest foreign
supplier after the United States. Japan has al$c emerged as all important
supplier of capital to the region. By 1970, T.)kyo had issued approvals
on new investments in Latin America totaling ;500 million, and by early
1973 the cumulative level of approvals reached nearly S 1 billion. Although
still dwarfed by the US investment stake, Japanese investment in the region's
mining and manufacturing sectors has become c )nsiderable within the past
several years.
3. To encourage Japanese investment in Latin America, as well as
in other less developed regions, Tokyo has estc. blished a special loan fund
to help cover investment risks. The government also has expanded its small
aid program to the region and has sent special trcde missions to help develop
new sales opportunities. Mcst Latin American countries have encouraged
Japan's growing interest in the region, viewing it as a way to reduce their
relative dependence on the United States. Sin :e the beginning of 1972,
at least a dozen Latin American economic m ssions have visited Japan.
4. Japan's sales effort in Latin America has been increasingly
successful. During 1966-70, exports to the rcgiz)n increased an average of
20% annually, and subsequently the pace accele'ated to an average of about
2570. These gains have about doubled Japan's share of the market since
1965, to 9% last year. Sales reached S 1.5 billio 1 in 1972 exceeded only
by those of the United States and West Ge -many. Sales this year are
expected to approach S2 billion.
5. Japan has concentrated its market ng effort on a few key
countries, notably Brazil. Venezuela, and Me+cico (see Table 1). These
countries' programs to develop such basic industries as iron and steel and
petrochemicals have opened up major new m rketing opportunities. (For
the composition of Japanese exports. see Table. 2.) Sales to Brazil -- by
far the largest market -- more than doubled between 1970 and 1972,
1. All trade data in this publication exclude ship exports t ' Panama under flag of convenience
registration.
2
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N,,h.F,,i0RANDLM FOR: CRS/ADD Release
SUBJECT: Release of ER RP 73-18, Japan's Growing
Economic Ties With Latin America,
October 1973, Confidential, to Foreign
Governments
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forwarded as follows:
#79
2. All OER responsibilities as defined in the DDI memorandum
of 13 August 1952, "Procedures for Dissemination of Finished
Intelligence to Foreign Governments, " as applicable to this report
have been fulfilled.
Chief, St/P/C/OER
'Ih: 65 czilmnticn rcy_?stad by
this menWhRitIdUin has beer, completedl
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