The Missed Market: Why Australia Should Rethink Its Relationship with Latin America
In one day, Mexico trades more with the United States than it does with Australia in an entire year. That startling statistic, shared with me at the Mexican Embassy in Canberra, captures how far behind Australia has fallen in Latin America.
As the U.S. turns inward under a renewed wave of economic nationalism under Trump’s second term, Latin America is steadily turning away from its traditional partner. And yet, even as countries like Brazil, Chile, and Colombia look to diversify their economic ties, Australia continues to treat Latin America as a diplomatic and trade afterthought.
That may soon become a costly mistake, or, if seized correctly, a historic opportunity.
CPTPP: Australia’s 2025 Opportunity
On 1 January 2025, Australia began its term as Chair of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP, covering 12 economies including Mexico, Chile, Peru, remains one of the world’s most ambitious trade pacts. It aims not just to reduce tariffs, but to set standards on digital trade, sustainability, and labour rights.
Australia’s theme for its 2025 chairmanship is Delivering Sustainable Trade and Resilient Growth, with three priorities:
Increasing trade between members.
Facilitating trade through more straightforward, more transparent rules.
Spreading the benefits of trade by ensuring inclusivity and sustainability.
For Australia, this year presents not just a chance to keep CPTPP modern and effective, but also to reconsider how Latin America fits into Australia’s broader trade diversification agenda.
As Irma Enriquez Thompson, DFAT–COALAR Board Director for Arts and Culture, told me, “The connection between Australia and Latin America has always been strongest in people and ideas. Now, the CPTPP gives us the framework to finally translate that human connection into real, strategic partnerships.”
CPTPP Trade Agreement Map Updated. Image credit: Daren I.B. via Wikimedia Commons
Why Australia Is Still Missing
Australia's engagement with Latin America remains limited despite a Pacific coastline, a shared interest in sustainable development, and similar export profiles in agriculture, mining, and education. In 2023, Australia’s two-way trade with Latin America sat at just over A$15 billion, barely half of what it traded with New Zealand, a nation of five million.
For Mexico, Chile, and Peru, the CPTPP is more than a trade deal; it’s a launchpad for Asia-Pacific integration. Its high-standard commitments, from digital trade to clean energy cooperation, are precisely the areas where Australia could partner with Latin America. Yet, Australia risks being sidelined from these new supply chains without deliberate and sustained action.
Enriquez Thompson observes that Australia’s strengths lie in innovation and research, particularly through universities, professional exchange, and the mining sector. “Mining has gained real momentum in the last five years, especially in Chile and Peru,” she explains. “These partnerships are important, they’re not just commercial, they’re part of a shared approach to sustainable industry.” But she’s also frank about the limits:
“Where we’re lagging is investment. Nearshoring and manufacturing remain underdeveloped. Logistics, distance, and political insecurity in some governments continue to discourage investors.”
Untapped Potential in a Shifting Region
There’s no shortage of opportunities. Australia’s mining companies are already operating across the Andes. Demand for clean energy partnerships is growing. Latin American students, particularly from Brazil, Colombia, and Chile, continue to choose Australian universities in increasing numbers. In the services sector, Australia’s fintech and agtech solutions could make a real impact in emerging markets seeking innovation and efficiency.
Latin America Film Festival Launch ANU. Image credit: COALAR
These are precisely the opportunities the Council on Australia-Latin America Relations (COALAR) Strategic Plan 2024–2027 seeks to capture by deepening business links, cultural diplomacy, and sustainability partnerships. COALAR highlights people-to-people ties, innovation, and cooperation on global challenges, which is an agenda that fits squarely with CPTPP’s commitment to inclusive trade and development.
Lessons from the Diplomatic Front Line
From regular conversations with Latin American diplomats based in Canberra, one trend is clear: there’s a growing eagerness to deepen ties with Australia. But as Enriquez Thompson points out, “It can’t only come from government. Diaspora communities, student associations, and cultural networks are already doing the hard work of connection — what they need now is support.”
She believes DFAT and COALAR could strengthen these efforts by “expanding collaborations with diaspora-led projects and exploring the contemporary side of Latin American communities in Australia. Supporting culture and higher education isn’t charity, it’s the foundation of inclusive, sustainable diplomacy.”
Latin American Week 2025 festivities at ANU. Image credit: Ben Wu
A Smarter Trade Strategy
After China’s trade restrictions in 2020–21, DFAT promised “diversification”. Yet Latin America still sits on the margins of that plan; a glaring gap for a region of 650 million people and growing middle classes. Many countries in the region are pushing for digital transformation, climate adaptation, and food security, all areas where Australia has both comparative expertise and shared policy goals.
Moreover, as U.S.–China competition intensifies, middle powers like Australia, Mexico and Brazil increasingly find themselves aligned in wanting a rules-based, multipolar system, not one defined by zero-sum rivalry. There’s room for deeper cooperation not just on trade, but on global governance, climate diplomacy, and education.
The Bigger Picture
Australia’s neutrality and lack of colonial or interventionist history in Latin America give it a rare credibility. “That neutrality,” Enriquez Thompson says, “is an asset. It opens the door to a genuine curiosity about collaboration. Latin Americans see Australia as a country that listens.”
Looking ahead, she envisions Memorandums of Understanding in education, culture, and heritage sustained beyond the political cycle. “Those MOUs matter,” she notes. “They survive elections and leadership changes. They make cooperation real.”
The Pacific Rim, she adds, could become “a route to change the economic uncertainty of the world as we know it, based on respect, common judgment, trust, and reliability.”
Where to From Here?
For Australia, the next step isn’t about radically overhauling its foreign policy; it’s about recognising an existing gap and responding with intent. The CPTPP is designed as a platform for expansion. Other economies, such as Costa Rica, Ecuador, and Uruguay, have signalled interest in joining. If Australia is serious about being a leader in the Indo-Pacific, it should actively support Latin America’s deeper integration into the Agreement, ensuring that the Pacific truly connects both shores.
Australia’s 2025 CPTPP chairmanship is a chance to break old habits. For too long, Latin America has been dismissed as too far, too complicated, too marginal. If Australia continues with that mindset, it won’t just miss a market, it will miss a future.
BIO: Mikayla Weber is a fourth-year Law and International Relations student at ANU, currently studying abroad in Madrid. She is President of the Latin American Students Association (LASA) at ANU and passionate about Latin America, global diplomacy, and human rights.
Content Disclaimer
The views expressed in this article are those of the author and do not necessarily represent the views or opinions of the Australia Latam Emerging Leaders Dialogue.