Operation Latin America?

The negative impact of Chinese imports on Latin America is becoming more keenly felt as the year wears on, with Brazil and Argentina both set to go into deficit with China for the first time.

After maintaining a bilateral trade surplus for the past several years, Argentina ran a deficit of 210 million dollars with China in the first four months of 2007. Exports to China were up 10% year-on-year and imports from China up 54%. Brazil's trade surplus with China peaked at 2.4 billion dollars in 2003, but imports have been rising faster than exports since then, despite the commodities boom. After shrinking to 400 million dollars in 2006, the trade surplus is expected to turn into a deficit of 1.5 billion dollars this year. 

China came to Brazil at the beginning of the decade seeking raw materials, and then it kept coming to explore the Brazilian market. It has made tremendous market inroads: China has replaced Argentina as Brazil's main supplier and will shortly outstrip Brazil as an exporter to Argentina. After both countries recognised China as a market economy in 2004, it has become increasingly difficult to impose protective barriers against cheap Chinese exports.  The manufacturing sectors in both countries, especially labour-intensive sectors such as textiles and footwear, will find it challenging to compete with Beijing on both domestic and international markets, potentially affecting growth and employment.