Aleman

Trade in the Americas Eugenio J. Aleman, Ph.D. Director and Senior Economist

U.S. & Canada-Real Exports Contribution to Growth

Export contribution to growth has been relatively strong in the U.S. but stronger in Canada

United States

Canada

U.S. Real Export v. Net Export Contribution to GDP

Real Export % Contribution to GDP

Percentage Points

1

In Canada

1

0.5

3

3

2

2

1

1

0

0

-1

-1

-2

-2

0.5

0

0

-0.5

-0.5

Real Export % Contibution: 2013 Q4 @ 0.7 Real Net Export % Contibution: 2013 Q4 @ -0.2

-1 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

-3 -1

Real Net Export % Contibution: 2013 Q3 @ -0.03 -4 1990 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

Real Export % Contibution: 2013 Q3 @ -0.2

2

-3

-4

U.S.A. & Western Hemisphere Nominal Export Growth

U.S. Nominal Exports have been very strong during the last two decades

U.S. Exports to Other Countries

Western Hemisphere Exports to Selected Countries

US Exports to Other Countries

Western Hemisphere Exports to Other Countries Index, Percent Change

Index, Percent Change

80%

80%

40%

40%

0%

100%

0%

100%

75%

75%

50%

50%

25%

25%

0%

-40%

-80%

-120% 1990

-40%

Exports Exports Exports Exports Exports

to to to to to

1993

1996

1999

2002

2005

-25% -50%

Western Hemisphere: 2012 @ 2.1% Brazil: 2012 @ 2.7% Mexico: 2012 @ -2.74% Chile: 2012 @ 6.12% Argentina: 2012 @ -11.36%

-80% -75%

2008

2011

-25%

Exports Exports Exports Exports Exports

to to to to to

the United States: 2012 @ 2.1% Brazil: 2012 @ 2.7% Mexico: 2012 @ -2.7% Chile: 2012 @ 6.1% Argentina: 2012 @ -11.4%

-100% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

-120%

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

0%

3

-50% -75% -100%

U.S. & Canada-Real Exports

While U.S. real exports have continued to improve, Canadian real exports have remained flat since the beginning of this century

U.S.

Canada

U.S. Real Exports

Canadian Real Exports

Trillions of USD

Billions of USD

$2.5

$2.5

$400.0

$400.0

Exports: Q4 @ $2.1T

Exports: Q3 @ $332.2B

$2.0

$2.0

$1.5

$300.0

$200.0

$200.0

$100.0

$100.0

$1.5

$1.0

$1.0

$0.5

$0.5

$0.0

$300.0

90

92

94

96

98

00

02

04

06

08

10

12

$0.0

$0.0

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

4

90

92

94

96

98

00

02

04

06

08

10

12

$0.0

Mexico-Real Exports & Contribution to Growth

Mexico has been one of the most successful exporters during the last two decades

Contribution to GDP Growth

Real Export Growth

Real Export % Contribution to GDP

Mexico Real Export Growth

In Mexico

4

Seasonally Adjusted

4

2

2

0

0

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% -10%

-10% -2

-2

-20% Real Export % Contibution: 2013 Q3 @ -0.6 Real Net Export % Contibution: 2013 Q3 @ -0.3 -4 1994 1995 1997 1999 2000 2002 2003 2005 2006 2008 2010 2011 2013

-30% -4

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

-20% Exports: Q3 @ 5.7%

5

94

96

98

00

02

04

06

08

10

12

-30%

Mexican Nominal Export Growth

Mexican nominal exports have continued to surge

Export Growth to Selected Countries

Nominal Exports

Mexican Exports to Other Countries

Mexican Exports

Index, Percent Change

Billions of USD, Not Seasonally Adjusted

150%

150%

125%

125%

100%

100%

75%

75%

50%

50%

25%

25%

0%

-75% -100%

$35

Exports: Dec @ $32.1B 6-M Moving Average: Dec @ $32.5B

$40 $35

$30

$30

$25

$25

$20

$20

$15

$15

$10

$10

0%

-25% -50%

$40

-25% Exports Exports Exports Exports Exports

to to to to to

the United States: 2012 @ 4.89% Western Hemisphere: 2012 @ 7.56% Brazil: 2012 @ 15.7% Chile: 2012 @ 8.7% Argentina: 2012 @ -1.3%

-125% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

-50% -75% -100% -125%

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

6

$5

$5

$0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

$0

Mexico-Real Exports

Mexico Real Exports Trillions of Pesos

$5.0

$5.0 Exports: Q3 @ $4.3T

$4.5

Mexican real exports have more than quadruple since the early 1990s

$4.0

$4.0

$3.5

$3.5

$3.0

$3.0

$2.5

$2.5

$2.0

$2.0

$1.5

$1.5

$1.0

$1.0

$0.5

$0.5

$0.0

93

95

97

99

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

$4.5

7

01

03

05

07

09

11

13

$0.0

Brazil-Real Exports & Contribution to Growth

Real export growth has weakened lately but was growing strongly during the last two decades

Contribution to GDP Growth

Real Export Growth

Real Export % Contribution to GDP

Brazil Real Export Growth

In Brazil

3

3

2

2

1

1

Seasonally Adjusted

30%

30%

20%

20%

10%

10%

0% 0

0

-1

-1 Real Export % Contibution: 2013 Q3 @ 0.4 Real Net Export % Contibution: 2013 Q3 @ -0.1

-2 1996 1997 1998 2000 2001 2003 2004 2005 2007 2008 2010 2011 2013

-10%

-10%

-20%

-20% Exports: Q3 @ 3.3%

-30%

-2

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

0%

8

96

98

00

02

04

06

08

10

12

-30%

Brazilian Nominal Export Growth

Brazilian nominal exports also skyrocketed during the period

Nominal Export To Selected Countries

Nominal Exports

Brazilian Exports to Other Countries

Brazilian Exports of Goods and Services

Index, Percent Change

150%

120%

Exports Exports Exports Exports Exports

to to to to to

the United States: 2012 @ 3.5% Western Hemisphere: 2012 @ -12.6% Mexico: 2012 @ 1.1% Argentina: 2012 @ -20.8% Chile: 2012 @ -15.1%

150%

Billions of U.S. Dollars

$28

$28

Exports: Jan @ $16.0 B 6-Month Moving Avg.: Jan @ $20.5 B

120%

$24

90%

90%

$20

$20

60%

60%

$16

$16

30%

30%

$12

$12

0%

$24

0%

$8

$8

-30%

-30%

$4

$4

-60% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

-60%

$0

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

9

90

92

94

96

98

00

02

04

06

08

10

12

14

$0

Brazil-Real Exports

Brazil Real Exports Billions of Real

R$40

R$40 Exports: Q3 @ R$35.1

Brazilian real exports have followed a very similar pattern than Mexico’s real exports

R$30

R$30

R$20

R$20

R$10

R$10

R$0

95

97

99

01

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

10

03

05

07

09

11

13

R$0

Argentina-Real Exports & Contribution to Growth

Argentina’s real exports have also boomed during the last two decades

Contribution to GDP growth

Real Export growth

Real Export % Contribution to GDP

Argentina Real Export Growth

In Argentina

Seasonally Adjusted

4

4

40%

40%

3

3

30%

30%

2

2

20%

20%

1

1

10%

10%

0

0

-1

-1

-2

-2

0%

0% -10%

-10% -20% Real Export % Contibution: 2013 Q3 @ -0.04

-30%

Real Net Export % Contibution: 2013 Q3 @ 0.3 -3 1994 1995 1997 1998 2000 2001 2003 2005 2006 2008 2009 2011 2013

-3

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

-20% Exports: Q3 @ 2.2%

11

94

96

98

00

02

04

06

08

10

12

-30%

Argentina-Nominal Exports

Argentina’s nominal export have recorded a similar pattern than in other Latin American countries

Exports to Selected Countries

Nominal Exports

Argentine Exports to Other Countries

Argentine Merchandise Trade Balance

Index, Percent Change

120%

Exports Exports Exports Exports Exports

100% 80%

to to to to to

the United States: 2012 @ -6.7% Western Hemisphere: 2012 @ 0.2% Brazil: 2012 @ -5.3% Chile: 2012 @ 7.8% Mexico: 2012 @ -5.1%

60%

120%

Billions of USD

$9 $8

100%

Exports: Dec @ $5.4

$7

80%

$6

60%

$5 40%

40% 20%

0%

-40% 1990

$3

0%

-20%

$2

-20%

1993

1996

1999

2002

2005

2008

2011

-40%

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

$9 $8 $7 $6 $5

$4 20%

$10

12

$4 $3 $2

$1

$1

$0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

$0

Argentina-Real Exports

Argentine Real Exports Billions of Pesos

$60

$60 Exports: Q3 @ $54.3B

Real exports have surged since the early part of the 1990s

$50

$50

$40

$40

$30

$30

$20

$20

$10

$10

$0

93

95

97

99

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

13

01

03

05

07

09

11

13

$0

Chile-Real Exports & Contribution to Growth

Chile has seen its trade sector explode with one of the strongest contribution to GDP growth in the region

Contribution to GDP Growth

Real Export Growth

Real Export % Contribution to GDP

Chile Export Growth

In Chile

6

6

4

4

2

2

0

0

-2

-2

-4

-4

Seasonally Adjusted

30%

30%

20%

20%

10%

10%

0%

0%

Real Export % Contibution: 2013 Q3 @ 0.3 Real Net Export % Contibution: 2013 Q3 @ 1.2 -6 1990 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Exports: Q3 @ 13.4% -10%

-6

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

14

91

93

95

97

99

01

03

05

07

09

11

13

-10%

Chile-Nominal Exports

Very strong nominal export growth for Chile

Exports to Selected Countries

Nominal Exports

Chilean Exports to Other Countries

Chile Nominal Exports

Index, Percent Change

160%

160%

Billions of USD

$8

$8

Exports: Dec @ $6.4

120%

120%

80%

80%

40%

40%

0%

$7

$6

$6

$5

$5

$4

$4

$3

$3

$2

$2

$1

$1

0%

-40%

-80%

$7

-40% Exports Exports Exports Exports Exports

to to to to to

the United States: 2012 @ 6.5% Western Hemisphere: 2012 @ -6.7% Brazil: 2012 @ -4.5% Mexico: 2012 @ -26.0% Argentina: 2012 @ -10.0%

-120% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

-80%

-120%

$0 1996

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

15

1998

2000

2002

2004

2006

2008

2010

2012

$0

Chile-Real Exports

Chile Real Exports Billions of Pesos

$12

$12 Exports: Q3 @ $10.8B

$10

Chilean exports have also surged during the last two decades

$10

$8

$8

$6

$6

$4

$4

$2

$2

$0

$0

90

92

94

96

98

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

16

00

02

04

06

08

10

12

Peru-Real Exports & Contribution to Growth

Peru’s real exports and export growth contribution have also been stelar

Contribution to GDP Growth

Real Export Growth

Real Export % Contribution to GDP

Peru Export Growth

In Peru

4

Seasonally Adjusted

4

2

40%

40%

30%

30%

20%

20%

10%

10%

2

0

0

0% -2

-2

-10%

-20% -4

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

-10% Exports: Q3 @ 3.6%

Real Export % Contibution: 2013 Q3 @ 0.4 Real Net Export % Contibution: 2013 Q3 @ 0.5 -4 1990 1991 1993 1995 1997 1999 2001 2002 2004 2006 2008 2010 2012

0%

17

91

93

95

97

99

01

03

05

07

09

11

13

-20%

Peru-Real Exports

Peru Real Exports Billions of Pesos

$12

$12 Exports: Q3 @ $11.0B

$10

Real exports in Peru followed a similar pattern than in Chile

$10

$8

$8

$6

$6

$4

$4

$2

$2

$0

$0

90

92

94

96

98

Source: IHS & Wells Fargo Securities, LLC

Economic Outlook

18

00

02

04

06

08

10

12

Wells Fargo Securities, LLC Economics Group Global Head of Research and Economics

Economists Azhar Iqbal, Econometrician………………… ……………azhar.iqbal@wellsfargo.com

Diane Schumaker-Krieg ………………… ….diane.schumaker@wellsfargo.com Global Head of Research & Economics ……

Tim Quinlan, Economist …………………… ……………..tim.quinlan@wellsfargo.com Eric J. Viloria, Currency Strategist

Chief Economist John E. Silvia …

eric.viloria@wellsfargo.com

Michael A. Brown, Economist ……………… …

...................... …

john.silvia@wellsfargo.com

.

Sarah Watt House, Economist Michael T. Wolf, Economist

Senior Economists

michael.a.brown@wellsfargo.com

…………… …………sarah.house@wellsfargo.com ………………… …

.

michael.t.wolf@wellsfargo.com

Economic Analysts Mark Vitner, Senior Economist……………....………. .

.

mark.vitner@wellsfargo.com

Jay H. Bryson, Global Economist …………………....…… ….jay.bryson@wellsfargo.com Sam Bullard, Senior Economist

sam.bullard@wellsfargo.com

Zachary Griffiths, Economic Analyst

zachary.griffiths@wellsfargo.com

Mackenzie Miller, Economic Analyst

mackenzie.miller@wellsfargo.com

Blaire Zachary, Economic Analyst

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blaire.a.zachary@wellsfargo.com

Administrative Assistants

Eugenio J. Alemán, Senior Economist… ………….eugenio.j.aleman@wellsfargo.com

Peg Gavin, Executive Assistant.

Anika R. Khan, Senior Economist …

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. anika.khan@wellsfargo.com

peg.gavin@wellsfargo.com cyndi.burris@wellsfargo.com

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Economic Outlook

19