The 2026 Latin America Forecast

Good afternoon everyone, or good evening, or good night, depending on where your time zone is. Thanks so much for joining us for the 2026 Latin America forecast. My name is Aed de Galo. I am digital marketing director for America's Market Intelligence, and I'm going to be serving as the moderator for today's event.

To give you a quick overview of what to expect. Our presentation should last about 45 to 50 minutes or so, and then we're going to open up the floor for questions. Our practice at AMI with this particular event, since it's so popular, is to answer all questions that are posed to us. So, we will stay on after the event actually wraps up, technically 1:30. We'll stay on after to address all the questions that are posed to us. And we usually do a pretty good job of getting to all of them.

Now, if you want to ask us a question at any point in time in the webinar, you don't have to wait until the end. The way to do it is if you look at your uh panelist, I'm sorry, your participant panel, you'll see an icon on there that says Q&A, and you click on that, it brings up a window. You write in your question and send it to us. We'll get to all of them though. So, but feel free to send it if it occurs to you during the webinar or at another point at the end, however you like.

One question we always get is, are the materials going to be available after? So, I want to answer that now up front. Yes. And yes and yes, we'll send you the uh presentation along with an edited version of the webinar video after the event. It should arrive within a couple of days.

All right, so let's move on now to the other parts of our presentation here. First, we're going to take a look at the panelist. Uh from left to right, we have John Price, the managing director of AMI. Then we have Lindseay Leer, the managing director of PCMI, a sister company of AMI, that is a global payments advisory. So she handles uh both uh Latin America and the rest of the world in terms of uh payment insights and and market research and such. And then we have Diego Rodriguez, who is our logistics practice leader. And then finally Sebastian Perez Ferrero, who is the uh director of our mining practice um and in charge of that particular area. And then of course, there's me. I'm somewhere here coming in here. Okay, there I am. And uh for whatever that's worth.

And then uh here comes our legal notice. I don't have time to read this. I think it's better for us to just get to the presentation. I encourage you to read it at your leisure. It really discusses our policy in terms of um verifying information that comes from outside sources that are in the the presentation, so on and so forth.

All right, so let's move on here a little bit more and we're going to talk a little bit about AMI. And for that portion of the presentation, I'm going to turn the floor over to John Price, managing director of AMI. John.

>> Thank you so much, Abel, and welcome everyone. It's great to uh have this audience back. This is an annual ritual of ours and we appreciate your time today. Um, just again, a reminder in the Q&A button, you can type in your questions there at any point in time. Don't have to wait until the end. We've been in business for over 30 years. Started in Latin America and focused on Latin America. The key to our success has been our ability to marry our knowledge of Latin America and our knowledge of key sectors. And u that has spawned several uh practices. The most successful of which has been our payments practice, which three years ago was rebranded as PCMI and expanded its reach globally. So to you Lindsay, I'll I'll pass the baton so you can explain a little bit more about PCMI.

>> Perfect. Hi John. Thank you so much. Hi everyone. Great to be here this morning. If we could go on to the next slide. Um, some of you may be familiar with PCMI or some of the work we've done in our payments practice. We are known as the world's number one knowledge partner for the global payments industry. What do we mean by knowledge partner? Right? Knowledge is most valuable and and and most powerful when it is able to be put to use to make decisions and to drive strategy. So all of our engagements with our clients are based around hard-to-get data, primarily primary research, always with real humans. Uh to John's point, industry expertise, a truly deep well of knowledge in the payments industry, particularly coupled with deep regional expertise that you know goes far beyond what any generalist firm could possibly accomplish, and combining that with proprietary analysis um putting value onto that information and helping companies drive real outcomes.

And if we go to the next slide, what are those outcomes that we're driving? You know, through our years of experience working with clients all around the industry and all around the world, we realize that clients are typically looking for one of three outcomes. And they take on different shapes and sizes and flavors, but essentially companies need to grow, they need to measure, or they need to protect, right? Sometimes it's a combination of all three of those. But at the at the bottom line, companies want to grow. They want to open a move into a new market. They want to move into a new end customer segment. They want to launch a new product. They want to measure. They need to understand. They're flying blind. They don't know how they're stacking up um in the market and against competitors. And they need to protect against disruption and competitive threats of all time of all kinds from direct competitors, threats that are brought on by regulation, by technology disruption, etc. So, our solutions at PCMI and AMI are oriented to help companies solve these three specific problems and provide clarity and actionable insights to help you really drive um tangible outcomes in your business.

>> All righty. Thank you so much, Lindsay. Well, this brings us to our poll, which I'm going to launch now. We like to do our first poll to sort of uh get your perspective on something. So, I'm launching that right now. Now, you saw that Lindsay was talking about grow, protect, and ser and and measure. I'm sorry. And so, that's really the focus of this particular um uh question. What we're asking you here is about your strategic priority for uh your Latin American business in 2026. So, one would be grow, and we're trying to put it in those buckets. Grow, which would be, for example, uh wanting to expand uh the marketplace and uh I'm sorry, expanding the marketplace. I'm trying to launch that again. Let's see if it goes.

All right. We had a little bit bit of uh of technical difficulty there and that has now been resolved. So I think you can sort of see it's pretty straightforward. Grow is if do you want to grow your business? Do you want to protect your business against regulation, other competitors? Do you want to measure your market share? How you're doing your brand awareness? All those kind of things. So we're trying to get an understanding there as far as that's concerned. All right, we'll give it another few seconds there and we'll share the results with you guys as far as that's concerned so you can see how uh your other attendees are stacking up. All right, I think that wraps it up here. I think we can safely end this poll. Thanks so much. Let's uh share the results here. So just so that the you get an understanding of this, I think you can see them, but in any event, I want to reiterate them. So we have 80% that want to grow, which makes total sense, and then 19% protect and 17% measure. So there are the results there with that. So let's really interesting and not surprising. Everybody wants to grow one way or the other. No.

So uh here we are now with the uh the next portion of our presentation, which is going to be the regional forecast. And for that, I'm going to turn the floor over to John Price, managing director of AMI. John.

>> Thanks Abel. Um, yeah, those those results are interesting because certainly for a lot of companies, this year has proved at least the first half of the year has proved disappointing in terms of growth. So I think we're all under pressure to grow. Um, I would have expected more numbers around protect because of the disruption that's uh that's going on, whether it's from technology, from regulations, from trade policy. Um, so that's an interesting dynamic there. But let's go to the next slide and let's talk about Latin America visav other parts of the world. We see a pattern emerging next year that has been a pattern we've seen now for probably two decades. That is that Latin America will outgrow the United States and Europe uh next year, but will fall short of the growth rates of other emerging markets. And there are some reasons for that. Um, some of them are perennials uh that have been around forever: poor governance, um lack of rule of law which leads to security issues. Uh infrastructure, although it's much improved, is still lacking. And of course, an education system that is either inadequately funded or uh focusing on not focusing on the skills that are needed. So those are issues that u the region has dealt with and continues to deal deal with. Um, but we have the added sort of challenge this year of a very disruptive new element, and that is changing US trade policy. The US has always been the biggest cheerleader of free trade and trying to open markets and lower tariffs and uh we've seen the political climate change in the United States and and as with it, policy change. So countries in the region are dealing with that and we'll get into that a little bit more.

But there's also some promising growth drivers. The most important one, and which is really longstanding, is um the rising productivity from digitalization. Latin America lagged uh technology adoption for years. But now, thanks to smartphone usage, um we have all kinds of disruptive apps in the hands of consumers across Latin America that are changing the service economy of Latin America. And that, if you look at the growth rate these days versus a decade ago, you see that we're growing in Latin America at about double the pace we were a decade ago. And that's the biggest reason why.

Let's move on and see how that growth is divided amongst the major markets. This is a this is a way of looking at the region that very few people do. We have measured the change, the the anticipated change in GDP measured in dollars between '25 and '26. And we do this because so many of our customers are either exporting to the region or um they are measuring their performance in dollars. So they're even though they're selling locally in local currency, they are repatriating profits and they're reporting their profits back to head office in dollars. Um, even if that's not the case, even if you're a multilatina, um you are probably got probably have a significant portion of your costs uh are based in dollars. And so it's it's not enough to look at growth rates. You also have to look at currency. And as you can see here, next year, growth in the region will be dominated by Brazil, uh and to a lesser degree Argentina, Peru, Colombia, and Chile. Mexico is obviously absent from this. And why is that? Because the anticipated friction with the United States as the two countries engage in what will be a very testing period of negotiation around the renewal of the USMCA is probably going to damage the value of the peso. And so with that in mind, forecasters are assuming that the dollar value of Mexico's GDP next year will be less than it is this year.

Okay, let's move forward. I have uh I have infamously remarked in the past that politics doesn't matter in Latin America in terms of predicting the economics, and that might have been the case when we had high commodity prices and cheap cost of capital, i.e., interest rates, particularly in the US were low. Neither of those conditions are the case today. Commodity prices are sort of at moderate levels or average levels in their historic um ups and downs. And the cost of capital is is considerably higher today than it was over the last 30 years. And so as a result, politics does matter. And what we saw under CO is that in reaction to very trying circumstances and very harsh policies, uh, voters rejected the mostly technocratic center-right governments and pivoted to the left. By the beginning of 2023, we had seven left-wing polit uh, populists running the seven largest economies in Latin America. Those leaders have largely failed to reactivate those economies. In many cases, they've put their countries on hold, such as Colombia and to some degree Chile, certainly Brazil. Um, and so the voting sentiment is moving back towards something pro-business, something less regulatory driven. Um, so we've seen that obviously in Argentina. We will probably see that uh realize in Chile, in Colombia, probably also in Brazil. And so this has been a net positive for the region. A lot of the money that left the region um is coming back, and that will be an important underpinning of growth over the next couple of years.

Let's look at one more slide around US policy and where it's been most disruptive. So this is an area that I don't need to school anybody on where it's it's dominated the airwaves and the news news reels uh over the last seven months. Um, and and I think everyone's aware of what has happened US policy, whether it's around tariffs, whether it's around deportation and the uh the taxation of um remittances, etc. But what you need to take a closer look at in terms of what it matters to your businesses in Latin America is keep a close eye on the negotiations around the USMCA renewal. It is not a foregone conclusion that that will be renewed. In fact, I would say the odds are more against it than than for it. Um, which would mean it would be have to be renewed on an annual basis, which would be tough for Mexico. Um, Brazil is is being drawn even closer into China's orbit by the uh conflictive relationship with the United States, and that is going to be uh an ongoing fluid thing. Um, and in Venezuela, we have gumbo gumbo diplomacy with 4,500 um armed servicemen just off the coast of Venezuela trying to force some sort of regime change to unseat an illegitimate leadership in Venezuela that lost the last election and hopefully transition that country to democracy. That will have a big impact obviously on on regional politics and uh in Central America. I want to point out Panama, which was the first country that really sort of was the focus of the Trump administration coming out the gate, and what we've seen is yes, Panama has pivoted back towards the states a little bit more from China, but more importantly in Panama, if you've been there recently, you'll sense a greater sense of self-sovereignty, of leadership saying, hey, we need to take care of ourselves, we need to fund our own projects, and so that is a sentiment that we may see repeated in other markets as well, as as countries feel pressure from outside.

So with that, I will um hand it back to you, I believe.

>> All right, thanks so much, John. Here we're going to get into our trend analysis. We're going to be looking at four trends uh that we believe are going to be affecting the region significantly in 2026 and beyond. And we're going to look at those from a sector by sector uh standpoint with different panelists talking about those effects. So let's start off here with trend one, which is supply chain disruption. So we know that the policy changes that have been instituted by Washington have had a ripple effect that's gone across the world, but they've been felt quite strongly in Latin America for a couple of reasons. One is that there's a some changes to the bilateral relationships between the United States uh and Latin America, and we've seen some issues there with specific countries and things that have been happening on that front. And then there's also an impact that comes from the trade conflict between the US and China, where Latin America, to an extent, is caught in the middle because it trades with both. And then the changes with the supply chain disruption. Some of them are welcome, but some of them are not so welcome. So we want to look at a little bit both because uh obviously there's some opportunity there, but there's also costs and more challenges for uh importers and exporters. So we want to talk about that and we're going to explore this from the perspective of different industry sectors. And to start us off, I'd like to invite Diego Rodriguez to come along to talk a little bit about the impact on logistics. Diego.

>> Thank you Abel. Good afternoon, good morning, good evening to everyone. Thank you for the invitation, John and Abel, to participate in the webinar. I'm really excited to share some of the insights that uh we have collected over the past couple of weeks. So let's let's talk about the US-led disruption when it comes to tariffs, sourcing, supply chain, and how Latin America may benefit. As John pointed out, we don't know what may happen with the US and the US MCA. Mexico. It's a tossup. But as we have learned from Trump in the past couple of uh months and the US administration, there's always swings. Some days we have 100% tariffs, for instance, against China. The other day we only have 30%. So the reality is really hard to predict what's going to happen, but numbers can give you some clarity. And what we have seen is that Mexican exports to the US remain solid for the first six months of 2025. And we may see the same for 2026. So we have these headlines, but what's happening on the ground? It's a different story. So what's the first benefit for Latin America is nearshoring extended beyond Mexico and more trade diversification within Latin America because the US is pushing countries to find alternative markets, alternative suppliers, alternative buyers, and that creates new routes, new service demands from shippers. So first, what we recommend to companies, especially asset-heavy logistics players, is okay, look at Mexico, look at Central America, and identify potential trucking, potential customs partners in these in these markets to extend your services because nearshoring and the USMCA from my point of view, it's likely to remain because we have seen the numbers there this first half of the year, and despite we are seeing a slowdown in in September and in August, numbers continue to tell the story, not the headlines.

Now, when it comes to new global alliances, I think that's the other disruptive factor impacting supply chains. So for instance, Mercosur and the European Union, they have been pushed because of the US-led disruption to accelerate the ratification of this free trade agreement, and that's going to generate new potential opportunities because what we have seen is, for instance, the European Union and the forestation rules may start to play a role in Brazilian exports, and we may see logistics players expanding their compl liance and consultative service uh for shippers. For instance, how logistics players can offer uh warehousing services for compliance versus non-compliance goods that are heading towards the European Union. That's something that will accelerate, and as trade potentially slows down next year, we may see transshipment hubs returning to a more normal operation because this year was very congested in Cartagena, in Cosco, in Kingston, in Cajao, in Port of Spain, everywhere, because of the front loading, also because of the empty containers in these markets. So, we may see a a 2026 heading into a slower trade trend, helping to decongest some of these hubs in the Caribbean, but congestion will remain a key factor as well for 2026.

So, I'm happy to hear and I'm very curious to hear what's Sebastian's take on the mining sector. So, Sebastian, please take us on.

>> Thank you, Diego. Um, good afternoon everybody. Very happy to join the team and to be a part of this presentation. Um, so as part of the supply chain disruption trend and its impact on mining, we expect to see the acceleration of processing and refining projects in the Americas, including uh seven new processing plants to be built in South America over the next three years for lithium, rare earths, copper, nickel, and cobalt. Uh we suggest positioning early through JVs or financing of refining projects in Canada, Brazil, Chile, or the US, securing offtake agreements and investing in mid-stream processing capacity that aligns with US reshoring efforts and that can take advantage of grants, loans, and subsidies from Washington to secure non-Chinese supply chains. Also, expect to see more partnerships between state-run miners and majors, such as the lithium agreement between Codelco and Rio Tinto in northern Chile, Salar de Maricunga. The structure of the $900 million deal, one of the largest foreign investments in Chile's lithium segment, could serve as a model for future lithium projects in the country. Our recommendation is to seek these types of partnerships with state miners and majors offering capital, technology, or offtake commitments. Consolidation favors firms with scale and alliances. So smaller players should align with bigger firms. A third impact of the supply chain disruption will be stronger regulatory and procurement requirements for chain of custody, proof of non-reliance on suppliers from sanctioned or adversarial countries, and environmental compliance. Therefore, invest in digital traceability systems and verifiable chain of custody solutions. Build compliance into project design. Firms that cannot prove trusted sourcing risk exclusion, while those that can stand to command premium contracts.

And now I'll turn it back to John who will tell us the view from the energy side.

>> Thank you, Sebastian. Um, you know, energy, like uh every industry that we're dealing with here in our analysis, is a global industry. So you often have to look outside the region to understand the impact inside the region. And a great example of that is the flow of oil to US refineries. Re refineries in the US um produce more oil than is actually needed for the US market. That's why the US exports a lot of refined oil products back to Mexico, throughout Latin America, into Canada, etc. And one of the primary sources of crude oil um for those US refiners, most of whom are in Louisiana and Texas, has been Canada. But Canada's political climate right now and uh the the policy of Ottawa is to shift or to um diversify its customer base. So they want to sell more of their oil to China and to other parts of the world. So there's been uh there was already in play before Trump was elected um pipelines to move more oil to the Pacific coast and onto Asian markets. That is a second pipeline is going to be built, and that is going to divert oil. So the US refiners are going to need to source from elsewhere. They'll get some of that from US producers, but they'll also be looking, you'll see I think more interest in places like Guyana and Suriname um, but also Argentina, Vaca Muerta, um, and possibly, depending upon the political climate in Venezuela, we may see uh US interest there. Chevron continues to operate there, and we may see um more more openings there. Um, this is an area of opportunity for engineering firms and for um supply companies, service companies to be on the lookout for new projects emerging in the exploration space.

Another sort of politically driven uh decision-m is uh is where Europe stands. So Europe, remember Europe went through quite a tumult with the Ukraine-Russian war, where Germany and other countries realized how dependent they were upon Russia for gas, and um that uh that was politically damaging in Germany. It was it was an expensive lesson learned by the entire continent. Now, of course, um by replacing that Russian oil, the Europeans turned mostly to the US, as well as Qatar and a few other producers, a little bit more coming out of Norway. But what it's what it and and this has been a big part of the negotiating uh that the Europeans have made with with Washington is that they'll buy even more US gas. But in the longer term, they want European utilities and gas companies to go and diversify their sourcing around the world. And so we are going to see more exploration, more investment from those European firms. Some of them are listed here in uh gas fields um in in Latin America, which are still underexploited.

And thirdly, um we see the US continuing um to exploit its enormous resources in natural gas. Uh there's always been a political contest over whether more export terminals should be opened. The environmentalists on the left in the US don't want them opened. Uh the the oil patch and gas patch does want more open. And with the present administration, we we will see more. There is calls for a pipeline across Panama so that more US LNG exports can reach uh Asian markets, and so we're seeing a lot of interest in helping the US expand their LNG exports. That's a big threat to Trinidad, and so Trinidad really has to invest in downstream if they want to survive against the US, which has cheaper gas.

So with that, I believe it's back to you, Abel.

>> Thanks, John. So now we're going to explore the second trend, which is a volatile regulatory environment. This year, as a company, in terms of the projects and what our clients have been mentioning to us, we really seen a common thread of being uh that there's a lot of regulatory changes going on. Um, and it's it's a it's a significant concern. It's not just coming from the United States. You had the Malay administration, Argentina, trying to simplify some of the complex regulatory codes in the country. There's a possibility, in fact, that a a wide-scale deregulation train uh could go across the region. So that kind of a trend is possible, but we are seeing change nonetheless. So uh we want to cover what we're seeing and what we expect to see and how this is going to impact things in 2026 and beyond. So to guide us through that process, I want to first turn the floor over back to John so that he can guide us through some of the regulatory changes that are anticipated in Latin America's um regulatory sector in energy. So John, if you could take that.

>> Certainly. Um, as you alluded to, Abel, um, generally speaking, I would say the regulatory climate is becoming more rational in Latin America, and that's a function of a move away from populists and the embracing of more technocratic thinking. So in the case of Brazil, for instance, um, Brazil politics is uh the president's important, but I would say that Congress is really the power broker. And what we're seeing is there's been a shift over the last 30 years in politics in Brazil towards something more pragmatic, something more center-right, something more pro-investment. And one of the one of the things that uh definitely was a welcome change is the environmental licensing reform, which passed in late July. And what it does is there there was over um a trillion reais of projects that were essentially on hold. In fact, closer to two trillion, and it is believed that um this loosening of rules or clarification of rules is going to unleash about a trillion dollars, sorry, trillion reais, which is about 180 um billion dollars of projects. Just to put that in context, u Brazil receives about a third of that uh in FDI each year. This is a massive potential upside uh change to Brazil's business climate. And so for for those who are in the in you know who are in the engineering space, um who are suppliers to these potential projects, who are investors, it's time to revisit those projects that have been on ice and see if in fact they can move forward.

In Argentina um, you know, Milei is uh a big part of of his mantra is deregulation. Uh Argentina was, by any measure, an overregulated market under the Peronists, and one of the areas that he's deregulating is the electricity sector, whether it's generation, transmission, storage, etc. And so what we're expecting, and of course, some of this is contingent upon the midterm elections that follow very soon, um, but we're expecting close to $10 billion in new investment that could arise from this deregulation. Um, again, some of those monies will wait and see to see how the midterm elections go and and how the financial stability of Argentina is two months from now, but there's no question that there's a lot of excitement, a buzz around the potential modernization of Argentina's electricity sector.

And another one is is energy transition. So, Chile really leads the region um by virtue of the fact that it doesn't have strong deposits of its own oil and gas. So it has really led the region in embracing solar, in particular, and with that, with solar to be successful because solar generates cheap electricity, but it's not viable without very strong energy storage infrastructure, and Chile leads the region both in terms of its uh the clarity of its rules, the pro-business um philosophy behind its its rules and business models, and the sheer amount of money that is already in play and is dedicated to expanding and creating 4.8 gigawatts of renewable energy storage um projects. So they're they're the model to follow as the rest of the region embraces. Right now, you know, the thinking is no longer about transition. It's any form of energy is on the table. Uh our energy demand around the world right now is running about three times its historic level because of AI, because of data centers. So no electricity source is off the table. Um, and that includes renewables, that includes conventionals. And so the whole region is embracing the need to deregulate and and foster investment in electricity generation and transmission.

>> Okay, I believe it it's over to you, Lindsay. No. Oh, pardon me, to Diego.

>> Thanks, John. So, okay, let's talk about the volatile regulation landscape that we're going through logistics. I know everyone is going through uncertainty because of the US tariffs, and that has a huge impact in the logistics industry, maritime industry. So over the next course of I would say eight weeks, especially the supreme the Supreme Court looking into the US uh tariffs legality, that's going to dictate how 2026 will be in terms of okay, the trade deals that the US have signed with the rest of the world are going to apply or not. So that's that's a critical component for 2026. And the reality is that we're seeing more and more shippers, more companies requesting advice from their logistics partners, logistics service providers to understand, okay, how we can minimize the impact of these tariffs in my supply chain, labor regulations, how logistic service providers can actually provide a true up-to-date advice. So it becomes a consultative approach. That's what we recommend for 2026 because uncertainty is through the roof, as you can see in the chart, is is histo is historic.

So that connected to Latin America is very interesting because in Latin America, we see what John described as the potential deregulation wave. As the region moves towards the right, we get more business-friendly administrations, potentially in Chile with Jose Antonio Kast. And Chile is a great example. John described Chile as one of those great markets for renewables, especially green hydrogen, for instance, has lots of potential. But the reality is that everyone knows Chile is an open economy with multiple free trade agreements. But when you look at obtaining permits, bureaucracy in Chile has become worse and worse in the past couple of years. And there was a recent study by the University of San Sebastian. And the cost of permits and bureaucracy to the economy is over $2.5 billion. That's a lot. So that's one of the focuses of the next administration. Let's cut taxes. Let's cut permits. and let's create this positive uh environment for companies and the private sector. That's something that we will see as well, for instance, in Colombia with the new president. So, uh, Espa is a potential candidate in the case of Brazil. If we connect Brazil with the d the deregulation wave, the new tax regime that's going to be a massive change for how logistics networks are going to be redesigned in the next six to seven years because we will move from four different taxes, federal, state, municipal, local, to only two taxes. And when you look at Brazil, Brazil has this very attractive tax incentives in some locations that it doesn't make sense to have a manufacturing or distribution center there. But because of the incentives, companies had these very strange networks. And what we expect to see is more consolidation, merging manufacturing with distribution, with wholesale operations, also a combination between trucking, cabotage. So that's the concrete example of how the regulation and how facilitating doing business in the region helps the private sector.

Having said that, I will pass the floor to my colleague Lindsay because I know you have really great examples to share with us.

>> All right. Thanks, Diego. So diving into payments here, taking a bit of a left turn into the consumer economy. You know, John and Diego spoke about deregulation, about volatility of regulation, and a bit of the opposite is true in payments, um, where we can see increasing regulation, right, in in in line with global trends and also pretty predictable, uh, pretty predictable regulatory trajectory. Um, and three major trends here is that A2A payments, or real-time payments, um, are going to continue to gain share of checkout. That's a major takeaway. I want all of you guys interested in payments to have. We see, and this is what does this have to do with regulation? Right? Regulators are driving this trend, primarily central bankers and other financial um authorities. So Colombia just launched in September, Bille, right, very closely monitoring, very closely following the Pix model. Peru continues to evolve in real-time payments, even inviting UPI to advise them on how to set up something similar. We've mandated QR interoperability in Argentina. So, we're going to see the advance of A2A payments um continuing to grab uh convert cash and grab an increasing share of checkout. What does this mean for the industry? Right? We've been saying this for a long time. It's a continuation of a trend, but money movement is continuing to be commoditized. And so players around the industry have to look for business models that are not relying on payment fees. Okay, as a bottom line, that's pushing the industry towards credit, innovative ways to make money out of lending money, um, capturing deposits and and lending money, right? So this is where we're seeing the industry go at a very high level. Banks and fintechs increasingly have to create strategies for customer engagement and for loyalty. As with RTP and the advance of open banking, a lot of these a lot of banks with big with with a big brand recognition or fintechs with a large network lose a little bit of their competitive advantage. Okay. Um, that's the big one, right? And all of us are aware of that. Combined with that are increased regulatory oversight and compliance requirements, which are increasing the cost of compliance for banks and fintechs. This means that banks have to increasingly be really choosy about what investments to make, and it may slow investments in other technology areas such as open banking um or even moving into cloud services, which is another trend we're going to look at further on. But increasing cost of compliance really creates difficulties for banks and for fintechs, difficulty, this increased cost in in making it more difficult for them to scale. We may be seeing more look for faster exits or maybe even more acquisition opportunities.

And then finally, what are regulators doing in competition in the card industry? Just as they're promoting the A2A sphere, they're also promoting interoperability and increasing competition in card processing. Right? We see authorizations of these in Mastercard card switching entities in Mexico um, including in Chile as well, um, and antitrust cases around fees and increasing regulation on price controls in the card industry, etc. So um, regulators being very active in that in that way as well. So in particular, Mexico is a very interesting market right now where we're seeing more competition and more opportunity for digital entrants to take advantage of this increase in competition. Uh, but it's a trend that we're going to see continue to advance throughout the region.

>> Lindsay, just quick clarification for my colleagues in the logistics space. A2A is account to account.

>> Yes, thank you. Absolutely. Account to account or a real-time bank transfer. Thank you for that clarification.

>> Awesome. Awesome. Thank you.

>> All righty. Well, thank you so much, Lindsay. Um, uh, what's next is we're going to have another poll, but before we do that, I just want to make sure you guys have clear how to ask a question. If you look at your uh your ribbon there, your panelist, your uh attendee panel, you'll be able to see the icon of Q&A and you click on that, you can ask a question. So, if any of these uh particular topics we've covered so far have uh provoked any questions, by all means, fire away. So, now let's uh launch another poll because we have another thing we want to ask you about. And there it goes.

So um in this particular poll uh we're basically have asking a pretty straightforward question, which is how do you expect uh your your company to perform next year uh and versus this year, and uh we have a couple of different gradations there of uh options, similarly much better, much worse, somewhat better, somewhat worse. So let's see uh what you guys think. Hopefully uh it's good news.

>> Yeah, and and we should consider the fact that when I started asking this question in January of 2025, I got a lot of uh negative pessimism answers, but the year hasn't turned out to be that bad. So maybe 2026 would be something different or perhaps something similar. We will see what our participants say about it.

>> That's right. Let's give it a few more seconds. We're getting a decent amount of response here and I'll be able to share the results with you. Let's let you know what uh in general all of you think about this. All righty, I think we're winding down here. So, let's end this poll and let's share those results and hopefully you should be able to see them up there on screen. So uh let's see here. The dominant response is somewhat better, 46%. Uh similarly to 2025, almost like a baseline, 31%. And then much better, uh only 17% are in that optimist category. Now, in the total pessimist category, 2% much worse, and then finally, we have somewhat worse uh than the 2025, and that's uh 4%. So it's it's good to see that there is some optimism there and the fact that you all are seeing some decent enough results to be able to justify uh you know, these responses. So that's great.

Now this brings us to our next trend. Let me move this over here and stop sharing this poll. And our next trend is going to be focused on the rising Asian business influence. So in the over the last quarter century, there's been a lot of growth in trade between Latin America and Asia, specifically with China. China was uh that growth was built on trade complementarity and also the need for capital in Latin America. The commercial engagement of China with Latin America started with commodities, but then that expanded over to the sale of Chinese finished goods, and then ended up with strategic foreign direct investment focused on technology and also infrastructure. Until recently, um, China and also the other Asian businesses that operate in Latin America would follow more of a US uh business standards based on the influence of the US and and what Latin America was used to at the time. And that also carries over into regulations and business models uh and such. But that's starting to change. What's happening now is that Asian business models are competing head-to-head with Western business models, and Latin America is the battleground. So to talk a little bit more about that, I would like to turn the floor over to Lindsay Leer to explain how these Asian business models are making inroads into Latin America's business sector. Lindsay.

>> All right. So many of you who are involved in the industry, especially e-commerce, this is a very hot topic of conversation, right? The entrance of Chinese marketplaces, not just Chinese, um, but Asian in general, Southeast Asian. Um, this has already this has been happening for a number of years now. But when you know we study the e-commerce environment very closely every year, and we're seeing these guys continue to gain deeper market penetration. And what is likely to happen as their names become more well recognized and consumers um are more comfortable shopping on these platforms, they're likely to continue to import business models that are wildly successful already in Asia. And TikTok is really the leader here with introducing innovative shopping models, um influencer-driven shopping, ship, TikTok Shop, and really positioning social media as a shopping platform that changes the entire payment stack and the entire payment flow that companies need to get prepared for. Um, Shein, Temu, Shopee, also very influencer-driven live shopping models are liable to become more popular and more entrenched in e-commerce and really challenge incumbents who maybe aren't prepared for these type of models, and also payment players who need to develop specific flows and specific features to accommodate this type of shopping experience. Um, these guys also are very low cost, right? The products on their platforms tend to be less expensive than what you see in Latin America, and local players are finding it difficult to compete with them on price. So a key recommendation here is to really invest in affordability on your platform, specifically through installments, which which are already very present and entrenched, but also buy now pay later solutions, and continuing to improve and personalize those solutions for consumers on the platform. Um, creative loyalty solutions, um, and especially fast shipping is a great way to compete against these guys who are shipping all the way from Asia.

Another thing that we're going to see uh directly related to this is that regulators are already responding to the influx of cross-border products with tax hikes. We've seen this happen in multiple markets. Regulators are quite volatile on this. We've seen them for the first time in Mexico this year, attacks on low-value shipments coming into into markets. Nevertheless, it's really interesting. Nevertheless, cross-border e-commerce in the region as a whole, it continues to grow faster than the domestic market. Okay? Even though even with with taxes and import tariffs imposed on products, um consumers are still have a voracious appetite for products coming from abroad, not only from Asia, but from abroad overall. But taking advantage of price par and even through the the price parity that you gain through taxes um is an advantage that merchants can take advantage of by selling similar products. And we are even seeing retailers invest in B2B relationships with distributors and B2B platforms in China to have the same products or similar products on their platform.

The final example I want to highlight is something that's very interesting is that Peru, the central bank of Peru of Peru um has it's come out recently as actually looking to India to the case of UPI to guide them in their real-time payment strategy rather than Pix coming out of Brazil, which is right next door. This is really fascinating. Um, now both Pix and UPI have been successful. Um, the the insights I've gained from talking to folks in Peru is that UPI is, India is perhaps perceived as a market closer to the Peruvian reality than Peru than Brazil. Higher levels of cash penetration, higher informal economy, and maybe a better peer market to use as an example to digitize a market that is highly has high levels of cash, high informality, and some of the same challenges that India had. Whether that's true or not is of course up for speculation and and a matter of opinion, but it's quite fascinating that, you know, and Peru has similar market conditions to a lot of other markets in the region that have not yet embarked seriously on an RTP or real-time payment scheme. So the the increasing influence of India in Latin America in terms of developing real-time payment systems um in which the card networks are very marginal um could have a big impact on on the region going forward.

>> All right. >> Payments. Let's continue. Yeah, Sebastian.

>> Thanks for that, Lindsay. Um, so as part of the rising Asian influence on mining, we see Chinese state-owned enterprises uh linking mining projects to ports, roads, and energy initiatives to secure mineral flows. Um, access to finance, logistics, and construction expertise will go to mining projects aligned with Chinese-backed development corridors and infrastructure, such as Peru's uh, Chancay Megaport. We suggest leveraging Chinese infrastructure commitments to secure mine development while ensuring contractual protections for operational autonomy. Another impact is that the minerals essential to AI and the wider digital economy will be increasingly shaped by Chinese technical standards. Uh, therefore, it is paramount to invest in technology alignment and interoperability with both Western and Chinese standards in mind. Secure offtake agreements with diverse buyers to avoid locking into a single standard ecosystem. And a third impact is that the resource demand will be linked to Chinese industrial and consumer projects, such as EVs and telecoms. This will concentrate demand and influence prices. Whenever possible, position operations near Chinese finance projects to capture guaranteed demand and favorable financing. Now I turn it

over to Diego who will go over the impacts on logistics.

Thank you, Sebastian. I think you two guys, Lindsay and Sebastian, open the floor for me fantastically because when I think about cross-border e-commerce, it's very related to China. When I think about mining, it's very related to the port of Chiankai. So that's fantastic because basically, what we're going to see in the next 5 years is Latin America wearing more Chinese products, driving more electric cars manufactured in China, and also using more technology and more software, more business processes from Asia and China.

So, what's the future? Chinese companies gaining more market share all over the place in multiple sectors in the region, and that's going to create new operational standards. So, new operational standards like smart warehouses, artificial intelligence, automation that is already happening in China. And as Chinese companies come to Latin America and start producing, for instance, in Brazil like BYD, we may see more and more of that type of operation, especially on the more on the smart warehousing front.

And what's the recommendation? We recommend contract logistics firms to upgrade their systems to be able to operate and to have interoperability between what they have right now, especially Western technology standards, and the Chinese standards to operate warehousing, transportation, etc. That's a key recommendation.

Now, what Sebastian mentioned about infrastructure is critical to understand that even though that we have had this transition that is starting in the 2000s with the commodity boom, then moving to the infrastructure, then to the digital economy in the last eight years, 10 years, we're coming back to the infrastructure investment wave again, especially in Brazil. We just saw it in Chiankai in Peru, and what we may see is more and more freight moving through Chinese infrastructure, either roads, railroads, and ports. And I'm just saying this in the most objective way. That's positive for Latin America because we're developing infrastructure that is not in the region right now. And that's positive in a way because that creates lower logistics costs, and that creates more competition, which has been one of their greatest hurdles in Latin America.

And when I remember John's introduction about, "Okay, why does Latin America grow at a slower pace than Southeast Asia?" One of the key components that come to mind is productivity. And productivity will be part of technology, but also productivity is enhanced through infrastructure. So that's the way that rising Asian business influence is impacting. And the key recommendation is for companies to compete where it matters. For Western companies, Latin American companies, compete where it matters because if we go to a price war, obviously the Chinese will win because of the scale that they have. But the key element to consider is speed, for instance, working with contract logistics providers that can ensure your products are under inventory and you don't experience stockouts, for instance, because that's one of the greatest differentiators between you, between your product and a Chinese product, for instance.

So I'll stop there and I'll pass back the floor to Abel or John.

N it'll be me.

Alrighty. So now we're going to talk about the final trend, which is technology investment. So, um, from 1985 to 2015 or so, Latin America was kind of lagging behind from a technology adoption standpoint. There were some bright spots because they had some of these trade agreements that sort of modernized the manufacturing sector and also the agriculture sector, and that was good. But on the side of the service economy, which represents something like 70 to 80% of all the GDP in the region, it was fairly behind.

But then the smartphone explosion happened. Basically, adoption became huge, and right now, I think something like 90% of Latin American adults in urban areas have a smartphone. So that's changed and really impacted a lot of areas and unlocked competition in areas that were previously highly uncompetitive. So we've seen some competition come up and things have changed and moved with entertainment and education, personal transportation, of course, accommodation, a number of different areas.

Now, the next wave of disruption is not going to be so much from the smartphones, but really more from AI, which I'm sure we've all heard a ton about over the past two or three years. But that's the reality of it is that it's really becoming prominent, especially in Latin America. It's being implemented by a lot of the larger companies and also the consumer segments. So, to address this particular change, and I'm going to turn the floor over now to Lindsay to talk about how the technology investment that we're seeing in Latin America is reshaping the payment sector. So over to you, Lindsay.

All right. Well, as you, as many of you probably know, this trend has an immense impact on the sector and is really putting immense pressure on competitors in the payment space. Especially payments is almost losing the word payments is losing predominance a little bit as fintech or financial technology gains dominance. And the second part of that word is technology, right? So payments is in this digital transformation, and what I see is a lot of buzz and a lot of pressure and a lot of hype around AI, um, and around, um, cloud infrastructure, and the region is still in very, very early phases of these technologies.

Now, following global trends, what I see is there's going to be an increasing space between incumbents and between digital entrants who are able to embrace these, who are digital native, cloud native, AI native, and are able to embrace these trends faster, deploy solutions faster. So there's going to be a growing distance between the large, well-known brands of today that consumers perceive as secure, as robust, as traditional, um, and the agile, sexy, exciting fintechs that are really bringing innovation to the market. And we're going to start to see in terms of, we're going to start to see consumers increasingly flow towards that latter group because of their embrace of technology.

Um, couple of high-level trends. Um, we're seeing VC investment, right? This is highly related to technology. We're seeing really important investments away from fintech and towards AI. Okay. Fintech has had its heyday. Again, payment fees are no longer really viable as a business model in the long term. So new business models are being created on top of AI. So, you know, I recently heard the expression, I was talking to a fintech recently, and they're saying, "We want to become, we are becoming an AI-first company." That's the first time I'd heard that expression.

Um, and so is that part of your thinking and your strategy, right? Treating AI as a regulated entity, right, with agents, um, and AI, um, check with with GPTs motoring businesses, thinking about it as an entity that you have to engage and a stakeholder that you have to actually engage. Right? So really, really key there. I apologize, the title on the second trend is incorrect here, but this is a second wave of national AI strategies flooding into the region with increasing investment from AI leaders around the world, in particular Nvidia, Microsoft, Salesforce with, you know, they're not an AI company, but they have a very strong AI sector and are coming in with very intentional investments in AI to drive their business. Data Bricks as an AI-native company, particularly in Central America.

So getting involved, this, this begs so many questions and poses a lot of insecurity for people who don't understand this technology. But the primary recommendation here is getting a seat at the table, getting involved in national-level discussions, in regulatory discussions, in roundtables to shape how this impacts Latin America because again, we're still in very early stages.

Finally, I want to speak around cloud computing. With the move towards APIs, microservices, open banking and open finance, um, hyperpersonalization, getting your operations into a cloud-based infrastructure rather than a core physical on-premise data processing method is going to be a critical competitive advantage. Um, we're seeing AWS, Microsoft, and Google all making increasing investments in the region with massive data centers in Argentina, Brazil, and Mexico, going after sectors that are still very monolithic and very traditional and legacy. So, these are all terms that you guys are all familiar with, legacy and these buzzwords, but it's becoming a reality as the technology becomes more accessible to people in various industries, including banking in particular. So again, early, early days, but it's becoming more and more important that we have a very dialed-in strategy.

Thanks again, Lindsay. So bringing it back to mining, investments in minerals critical to AI and data centers will drive demand for copper, lithium, cobalt, nickel, and rare earths. Um, with the geopolitical consequences, the fact that China controls rare earth supply and is now shutting the US out of its exports could just take the trade war to another level with more tariffs to come. Goldman Sachs recently flagged AI-driven infrastructure as a new leg of the copper super cycle, and the International Energy Agency estimates that by 2030, data centers may account for 1 to 2% of global copper demand.

Our recommendation is invest in mining and processing of AI-relevant minerals, secure offtake agreements with data center developers, tech companies, and government-backed AI programs. Um, the AI boom will also put pressure on mining operations to deliver high-quality, traceable materials. AI hardware and data center components require high-spec minerals with consistent quality and documented provenance. So supply chains will favor sources guaranteeing purity, reliability, and traceability. Therefore, implement quality control and digital traceability systems for critical minerals. Early investment in verifiable chain of custody infrastructure will differentiate suppliers.

Finally, AI-driven investments may cause sudden surges or drops in mineral demand, amplifying price volatility, particularly for those using batteries, processors, or high-speed networking. According to the IEA, critical mineral pricing is two to three times more volatile than industrial metals and up to five times more volatile than precious metals. Therefore, hedge exposure whenever possible and diversify mineral portfolios, build flexible operations to quickly ramp production up or down, and maintain strategic stockpiles or agreements to hedge against short-term volatility.

Now John will give us the B2B services take on this trend.

Thanks, Sebastian. For companies like ourselves who are in the B2B services space, we've been keenly aware of how AI is going to change, is already begun to change our business and how we operate. In fact, we took on an exercise a couple of summers ago with interns who looked at 10 internal functions and 10 client-facing functions, and it was very clear that a lot of what we do can and will be disrupted by AI. And that's really the key here is that people understand this is not necessarily about replacing people. It's about enhancing productivity with people. You've got to supercharge the productivity of your existing people by training them and arming them with these tools. And so that requires companies not to just invest in the tools, but really to invest in training.

For a lot of companies, because a lot of the training is around internal proprietary systems and processes, they're talking about corporate academies. So that, and big companies already have academies. So I think that the idea of an internal academy will be something that will be adopted by a lot of midsize and even small companies because training and upping the productivity of your people is going to be essential to competing.

One of the other interesting phenomena that we're seeing is, you know, with every major infrastructure development, putting down rail lines 200 years ago, building roads and interstate highways 100 years ago, building telephony and telephonic hubs as data centers. All of those infrastructure revolutions had real estate development implications. So if you bought land along a rail line, you made money. If you bought land across an interstate highway, you made money. The new clusters of businesses will be formed around data centers. Now, the first data centers in Latin America are in the obvious largest cities, but because AI requires such quick response, you know, we get frustrated when you're using AI and you've got to wait 30 seconds, God forbid, for all this computation to happen. But if you're in Guatemala today, you're going to be waiting six minutes for the same thing. So speed becomes important. Therefore, proximity of data centers becomes important.

So for real estate developers and for businesses that are going to rely upon the speed of data centers, we're going to see a new clustering. And what we learned from COVID is we can run our businesses from anywhere. So it'll be no longer necessary to be downtown in a city if the data center is not there. So this is going to change the business landscape of the whole world. And people need to be aware of that. So with that, over to you, Diego.

Thanks, John. Okay, so let's talk about logistics technology and AI because we see early adoption of AI in Latin America, and that's creating a competitive edge for some firms. But what's my key takeaway? AI is going to close the gap, especially the gap regarding productivity, and that's a central point and the central use that we may see in Latin America and artificial intelligence and technology adoption. What's the trend, basically? In Chile, I come back to the example of Chile. Chile is probably one of the leaders when it comes to AI because 70% of large companies in Chile have already pilots regarding artificial intelligence. How those pilots are massively scaled up and used across the operations, that's another story, and that's where I see it with Lindsay. Okay, we see lots of hype, lots of pilots, but what's the material impact on the bottom line? We're not seeing it yet.

Now, 2026 may bring a different story, and that's where logistics and technology adoption merge in a really, really great way because logistics has suffered because of high costs, lack of productivity, lack of efficiency, and that's where artificial intelligence comes to play to make operations more efficient, to use telematics to reduce operational costs, for instance, in your fleets at your for terminals. That's where AI will accelerate the processing of information and better decision-making as well. That's where we see AI.

But what's the recommendation? First of all, explore AI at the cross-functional level. Involve your entire company in the AI pilots. So the company benefits across different divisions, for instance, operations, customer service, payment processing. It needs to be a cross-functional approach. And that's something that we're not seeing yet in Latin America. So we are seeing different silos. Okay, I'm using AI for my customer service. That's it. I'm not using it for telematics. I'm not using it for payment processing or other opportunities.

Now, the new growth frontier is definitely data centers, as John pointed out. Lindsay also mentioned this. And for companies, especially contract logistics players, logistics service providers looking at cargo projects related to data centers, the servers, everything regarding parts and distribution of servers, it's going to be in massive demand, especially in Brazil, Mexico, Chile, Colombia. So that's where we see the opportunity.

But key message to wrap it up: AI and technology adoption is going towards increasing productivity in Latin America. Not so much regarding automation as we're seeing it in the developed world, for instance, in China, in the US. That's not the story that I'm seeing in the logistics space in Latin America.

So back to you, Abel.

Alrighty. Thanks so much, Diego. Let's cue up our final poll question. Now, for this one, we're not going to share the results. Everything's going to be completely confidential. So, we're just going to launch this for you. It's a question about, you know, how would you like to hear from us? So, let's go over that one here right now. So, I am launching that one for you to take a look at. And, um, basically, what we're asking you is how you want to hear from us in terms of like what's next after the particular webinar. So, for example, we have the opportunity to have, um, to give you a confidential 30 to 60-minute conversation where you can talk about some of the issues and we can do a little bit of brainstorming, so one of our experts can contact you as far as that's concerned. Um, if you think you need our consulting in your efforts to grow, protect, or measure, you know, just for just letting us know to contact you to discuss, and we can take that a little bit further. And then there's the other options which would be, you know, you may need our assistance, but there's no need to follow up. And then finally, you know, you enjoy our thought leadership, but your organization does not hire external consultants. So those are all the different options. These are going to be completely confidential. We're not sharing this one or anything like that. So, let's just give that a little bit of time and then we'll move on to the next section, which is going to be Q&A, by the way. So we'll start to be addressing the questions.

All right. Give it a little bit more time. And let's see here. All right, I think we're wrapped up for the moment there. Give a little bit more time. All right, I think that's it. Let's end that poll there. Thank you so much for your participation with that and all our other questions. Uh, all right. So let's get into the Q&A so we can pose the questions to our panelists.

One of the first ones here I wanted to pose, which is the one from Hermang. Hermang is asking, "What to expect from the energy sector in Mexico with recent market rules?"

Well, the market rules, I think is a misnomer. As I think he's referring to is the energy reforms that were passed relatively early in the AMLO administration, which really what they did was they sort of put down on paper where the AMLO administration was driving the energy industry, that is away from the energy reforms passed by the Peña Nieto administration towards something much more state-controlled. Hold. So the emphasis of these rules is to secure the future of CFE and PEMEX, the two state-owned energy giants, both of which are inefficient and allegedly corrupt. And by doing so, I think the signal that it sends the private sector is you've got to work with us. We're going to limit the opportunities that there are for 100% private sector investment in energy. And for large companies that already operate in Mexico in the private sector and private energy sector companies like TransCanada or like Engie, they can make that pivot relatively easily. They, you know, government, they have good government relations. They're in Mexico. They need to keep growing. They have no choice. But for new investors looking at Mexico, that's the wrong kind of signal that they want to hear versus other parts of Latin America like Argentina, like Brazil, that are opening to more private sector investment in energy.

So I think that the AMLO administration is going to struggle with that policy framework to achieve the goals of raising the electricity generation thresholds in Mexico. Mexican industry has to pay 60% more for its electricity in northern Mexico versus companies set up in Texas. And there's a lot of need to lower energy costs in Mexico. And these rules do not achieve that. So I think they will be problematic. There will be pressure to change those rules, but right now we don't see any political efforts to do so.

All right, thanks so much, John. Now we have a question here for Lindsay from Jose. "What is your opinion about stablecoins for cross-border transactions, especially for trade financing in combination with BNPL features?"

Yeah, great question, Jose. Certainly a topic we did not highlight stablecoin in our forecast for Latin America. Um, the reason being, well, to go directly to your question, for trade finance, I mean, that is one of the top use cases of stablecoin globally, right? Disrupting SWIFT, stablecoin brings a lot of benefits for those large cross-border transactions. However, it requires the buy-in of financial institutions, and I personally see that as pretty far from becoming a reality at a widespread level in Latin America. Certain financial institutions, particularly in Brazil, are running pilots and experimenting and moving in that direction, but as a whole, banks have a lot on their plate. And stablecoin or digital assets, blockchain in general, is not a top priority.

Where I do see stablecoin, where we do see it already having a very big impact in Latin America, is in P2P payments and remittances. Uh, why? Because you have much more fintech-forward companies touching that space, and it solves a very serious pain point of cost and speed for consumers. So we see stablecoin already being used to move money for consumers around the region, and that will continue to grow, I believe, at a faster rate than institutional use of stablecoin in Latin America. That's not true for the rest of the world, um, but that's what I believe. Um, in Latin America, in the global South in general, where access to dollars, digital dollars, and a stable currency is in high demand. I'm not exactly sure what you meant, Jose, when you mentioned in combination with buy now pay later. You mentioned trade finance, which of course is in the credit realm. But those are my general comments on stablecoin. Hope that helps.

All right. Thank you so much, Lindsay. So there's one you might be able to chime in on also that comes from Peter Abberto, and his question is the following: "So it seems the regulation is acquiring a more accountable stance throughout the region. Does it make sense to invest more in scaling up governmental relations and public affairs activities in certain countries of the region in order to get ahead of the curve?"

Yeah, I can jump on that. Absolutely. In payments, absolutely. I'm sure other panelists will have different responses, but absolutely in payments. Um, I always kind of chuckle when I go to fintech or payments events in the region because there's this passion and fervor around fintech, but the regulators are nowhere to be found. And it would make a lot of sense to invite regulators to, to maybe they do. I really don't know. But, you know, public-private partnership and inviting regulators into the conversation because what is the biggest complaint that fintech and even banks have about regulators is that they're too slow. They don't understand the technology. They don't understand. They're very focused on consumer protection. They're very risk-averse, which is their role. That is perfectly acceptable and understandable. However, they need to be participating in the conversations that are creating, you know, technology acceleration ultimately creates friction with regulators, and they're very often not included in the conversation. So, being proactive about your government relations is very important, having influence over how policy is created, having influence around how real-time payment systems are created, what the rules around those are, ensuring a fair seat at the table for your company. 100% a very important strategic investment to make right now. And I'm sure the other panelists have comments from their industries.

Not sure if anybody else would like to jump in. Just generally, I know Peter Alberto, hope he's well. You know, the lobbying industry in Latin America varies tremendously. You've got, and in no country is it as mature and regulated and sort of visible as it is in the United States. But nonetheless, in Brazil, it's a fairly sophisticated industry. I would say in the other markets, it's less structured and sophisticated. But there's no question that there is a, you know, just because we're talking about in some sectors a more rational approach to regulation doesn't mean that there's any slowdown in the change of regulations. And regulations are moving forward, and there are a lot of regulations that continue to be authored by regulators without enough consultation with the private sector. And that's what leads to problems because they end up being rules that are just costly. They end up being rules that don't actually solve the problem. So I think that it is incumbent upon companies who can afford to be influencers in that process to really invest in it because it has long-term benefits.

All right. Well, let's move on to a different query here. This is from an anonymous attendee. This is more, I think, in the mining space. This person is asking, "What about rare earths opportunities for Latin American countries with deposits of these?"

Yeah, like I said before, China is closing off the US, its rare earth exports to the US, and there's a lot of interest in projects in Brazil and in Argentina and Chile. Very small scale, nothing compared to what China can export. But it'll take, you know, at the same time that the US is also building out its own rare earth supply, and it'll still take a couple more years. So expect to see a lot more interest and a lot more investment in rare earth projects in Latin America, especially in South America.

I also wanted to take the opportunity to answer the first question by Adam Blanco in terms of BHP agreeing to settle 30% of its iron ore trades in RMB. So last month, as part of broader negotiations over contract terms and pricing, China Mineral Resources Group reportedly suspended purchases of BHP's iron ore cargos denominated in US dollars. And as part of the negotiation, BHP has agreed to settle approximately 30% of its spot iron ore trade with China in yuan rather than USD. This is no surprise. Beijing is actively pushing yuan use in the region, in Latin America, through yuan-denominated credit lines and swap facilities, like the one it's been offering to Argentina since 2009. And commodity exporters and large state firms have started to use RMB pricing and contracting in some deals, or at least negotiating RMB options because China is the dominant buyer. So Argentina traditionally settles imports and collects shipments in USD, but since 2023, in specific deals, it's been open to using RMB, particularly related to soy, to the soy shipments, where again, you might have noticed China has stopped buying soy from US farmers and now making up those purchases with supply from Argentina and Brazil. So, you know, with the support of ICBC Bank and Monocitis, expect more deals perhaps to be denominated in RMB. Nevertheless, you know, 90% of Argentina's soy exports to China are still denominated in US dollars. Chile has also sent large copper exports to China using yuan-linked financing and contracting. Brazil's exporters are increasingly comfortable with RMB settlement. Reports indicate that some agricultural and meat shipments were contracted recently in RMB. And also some bilateral financial arrangements and trade finance in yuan are emerging at a small scale in Uruguay, Paraguay, Bolivia, Ecuador, and Uruguay, often centered on specific commodity deals.

All right. Thank you, Satyang. So I have a question specifically for Diego from Jorge, and the question is, "How do you see the development of freight volumes in Latin America with US import and export based on the trends that were explained?" I'm assuming the trends explained in the webinar today.

Right, right, right. Thank you, thank you, Jorge, for the question. Okay, so let's start with US-Caribbean. In the first 10 months of this year, what we have seen is declining exports from the US to Caribbean countries. So what does that tell you in terms of freight volumes? Okay, importers in the Caribbean are looking elsewhere, looking to other regions to buy products because most of the goods that are consolidated in Miami, guess what? Are coming from Asia, and those are being tariffed. So the pass-through effect that we're seeing in the Caribbean is forcing importers to look to Panama, Brazil, Mexico, directly from China, the European Union. So we are seeing trade between the US and the Caribbean coming down, and we are seeing also trade spiking between Brazil and Argentina, Brazil and Chile, Brazil and Colombia, as Brazil continues to lose sales in the US because of the tariffs.

Now, Mexico-US, the first eight months of the year, we have seen exports remain solid. Freight has declined between 2-3%. So that's a positive sign. Just to reiterate the initial message at the beginning. Now, what about, let's say, intra-regional trade within Latin America? We have seen just slight increases, not as much as we expected for because of the conditions again, Brazil-Argentina, Brazil-Chile, but it's not massive, it's very, it's a slight increase. So that could be a potential sign for 2026. Now, when it comes to the exports from the Caribbean to the rest of Latin America, what's my expectation for 2026? The US Supreme Court will keep the tariffs in place. That's my expectation, 90% likely. So tariffs will remain in place for Latin America. Latin America faces 10%, some cases like Guyana 15%, but Guyana is excluded because the majority of the exports are oil. So that's something to consider as well. So 2026 freight volumes will be on the downward trend in some of the key lanes, but we need to monitor the spike at the intra-regional level. And that's where we may see new routes, new port calls, we may see new services emerging as we start to see more and more diversification.

All right, thank you so much, Diego. Let's shift gears to a different area. This is from Casey. So Casey specifically focused on Bolivia, specifically the energy sector, and asking, "What kind of trends are you anticipating or watching for? What kind of potential constitutional, legislative, or regulatory changes we'll be watching for and should foreign businesses looking at in the coming months and years in Bolivia?"

I'll take that on. And Casey was right in pointing out that in the political shift to the right, I didn't mention Bolivia because they certainly are part of that storyline. People were somewhat surprised by, I think those who don't understand Bolivian politics were surprised by the degree to which the MAS party lost power. It's been in the works now for a while. Look, whoever wins, and there's still a runoff election, two candidates who certainly both represent a change from the MAS towards something a little bit more pragmatic, a little bit more embracing of the private sector, but still two very different visions for Bolivia and for the energy sector in particular. There is still a nationalist sentiment in many political circles in Bolivia that says that they should hold on to national control of the lithium industry and look to Chile as a sort of guiding light to do that. The way that Chile also requires that private investment in lithium be by joint ventures with one of two state operators. The problem is that the world doesn't have the same level of confidence in a Bolivian state operator as they do in Codelco. Chile is a country where the rule of law, where prudent governance has been the norm now for 40 years. And so the idea of doing a joint venture with a state-owned enterprise in Chile is a very different set of risks than doing a joint venture with a Bolivian. So I think that if Bolivia is serious about developing lithium, it's going to have to walk away from the dream of state ownership of lithium and allow the private sector to come in. But again, that will be dictated by the next president more than anyone.

Another thing that we all have to be cognizant of the fact is that in Bolivia, regardless of who wins the election, we are going to have to see a major devaluation of the currency. The currency is the last remaining, well, not the last, but certainly one of the last remaining controlled currencies, a pegged currency that years ago seemed a safe bet because of Bolivia's massive surplus of natural gas exports that generated so much dollars every year that they could easily maintain that peg. But as the state took over the national gas industry and essentially robbed it of its future by just stealing from that organization and not investing in it, meant that Bolivia's enviable position as a huge gas exporter, that all dwindled, and now natural gas contributes very little to the trade surplus of Bolivia. And so what you have is the foreign reserves, which were once massive, are now down to, there hasn't been a public accounting of it for over a year. We don't know the exact number, but it's certainly very, very low. The currency is going to have to devalue anywhere from 20 to 50%, depending upon how well it's managed, depending upon what kind of IMF support they're able to achieve. But it's going to be part of the policy framework. So if the Americans get involved, or even the IMF get involved, they're going to demand a certain level of transparency and a certain level of reform in the country. That is going to be complicated by the fact that the MAS still control most of the municipal and departmental politics in the region, and many of those MAS leaders have depended upon a corrupted natural gas industry to pay their salaries and to pay and to line their pockets. So when that, if that gets taken away, there's going to be a lot of resistance at the local level. So Bolivia is going to be a very interesting place to watch over the next year. But a change at the top, as embracing as it may be with investors, is not going to be an easy transition. You don't undo the kinds of political entrenchment that the MAS has achieved in Bolivia over the last 25 years. You don't get rid of that in one year. It's going to take time.

All right. Thanks so much, John. We have a question here from Juan that I think both you and Diego might be able to chime in on. The question is, "Do you believe US pressure on Mexico will lead to opening the energy sector, reduce corruption, weaken its ties with China, and strengthen the US-Mexico partnership?"

So let me start, John, and then you can follow.

Sure.

Short answer, yes. We are seeing that. We're seeing Mexico aligning more with the US, especially against China. The tariffs against electric vehicles, the tariffs against those countries where Mexico doesn't have a free trade agreement. That's a clear sign. It's a, that is driven by US demands. Now, the energy sector is one of those big prices that are going to be on the table for the USMCA renewal for sure. That's going to be a huge demand when it comes to negotiation. So my expectation is as we move toward 2026, Mexico will have to make very tough decisions, especially Sheinbaum. I think Sheinbaum has been very smart, very pragmatic, especially she has really good advisors, and that has created a really a strategic position to deal with the US administration demands. And when it comes to the renewal, I'm very positive we will have a USMCA renewed even faster than we expect, and the energy sector is part of that negotiation. That's my take.

Yeah, let me just add to that. I mean, Sheinbaum is between a rock and a hard place. On the one hand, she has to honor the legacy of AMLO, whose de facto appointment of her essentially, she owes all of her political success to him. He built this party from nothing in six years, the most powerful political party in the entire hemisphere, and she knows that almost everyone in Congress is loyal more to AMLO than to her. So that's her reality that she has inherited. But at the same time, the US is pressuring change. The Mexico private sector is pressuring change, and in the energy space, there is a threat of litigation of about $40 billion, which is what the calculation of loss was by AMLO interfering with the investments made by American companies as well as Spanish companies in Mexico's renewable sector, as well as gas sectors in the electricity generation projects that took place in northern Mexico that he interfered with and led to those being shut down and being abandoned. And so the oil and gas sector in the United States comes from Texas, Oklahoma, the Dakotas. These are all firmly Republican states. They have plenty of allies in Washington, and most recently Trump said that energy has to be on the table if we're renegotiating. The reason I'm less optimistic about a renewal is, on the one hand, I agree that it's absolutely paramount, and for a lot of US industry, particularly in the Midwest and the industrial beltway, they need Mexico as a partner. The problem is that the renewal period, July of next year, will be right in the midst of the midterm election campaign period. And so for a lot of politicians who are contesting their seats in the United States, it's going to be risky to go out and say that they, that the US should renew. And so the timing couldn't be worse for such a discussion, even though, and therefore, I'm not 100% sure that pragmatic, logical minds will prevail in such an environment.

In terms of reduction of corruption, I don't think that there's particularly much pressure from Washington on Mexico to reduce corruption. That is much more the case when the DOJ had real teeth under Obama and to some degree under Biden. But where the US wants to really make an impact is reducing the influence of organized crime in Mexico. Today, of the 32 states in Mexico, roughly seven have governors that cannot make major decisions without consulting the largest organized criminal elements in their state. Probably another 10 states where there are mayors of major cities that are in the same boat. And then there's another five or six states where there are pockets within the state that are essentially controlled by organized crime because they are corridors of trafficking. And so organized crime has infiltrated municipal and state leadership, and the US is well aware that there are people in the national government that are also allegedly aligned with organized crime, and they want to lessen the influence of organized crime at all levels of government, but most especially in Los Pinos at the national level. And so that is where you're seeing US pressure. It's not public, it's private. They're private conversations between the US ambassador and the heads of intelligence in the US with those Mexican counterparts. And for Sheinbaum, it's not unwelcome. Why? Because she wants to modernize Mexico, but she is kept down by the AMLO legacy. So she's looking for ways to modernize Mexico, to move Mexico towards more investment, towards better relationships with the US, but she's doing it carrying on her back the legacy of AMLO and the loyalty that continues towards him by many people in her own party, and that's a real challenge for her.

All right, thanks so much, John. We have another question from an anonymous attendee. "What commodities products do you expect to see the most growth in moving from LatAm to the US?"

Okay, that's a really interesting question. What I'm seeing right now is more trade between Mexico and Central America regarding the automotive supply chains, especially because we're seeing this shift in Mexico and the US to keep China off this very important industry. And we are very bullish in terms of expectation of perhaps more raw materials, more second-tier, third-tier companies operating between Mexico and Central America in order to create this regional automotive supply chain, garden of China. That's one of the key elements that we're seeing. Cosmetics is another one. Cosmetics. I believe Latin America has really strong players in Colombia, in Mexico, in Brazil. So that's another opportunity for products actually shifting in terms of production and increasing manufacturing in the region. And the third one that comes to mind is Costa Rica, the Dominican Republic, Puerto Rico with the medical devices, the pharmaceutical industry. Those three countries are pushing their strategy, and they're actually preparing for the next decade in terms of "I want to be a key player in this sector. I have these incentives. I have this labor, and I have the previous experience." It's not an industry that has to be built up from the ground. So medical devices and biopharmaceuticals, it's something that especially Puerto Rico can recapture as we evolve in these nearshoring opportunities. That's where I see the three key opportunities for Latin America.

All right, sounds good. Let's move on to our final question, which is from Goldie. "Where do you think US investment should focus with the goal of supply chain resilience?"

Abel, if I can chime in on this one.

Certainly.

So, it's a very good question by Goldie. The US relies heavily on imports for minerals needed for EVs, batteries, renewable energy, semiconductors, and defense. And the supply chain concentration in China creates vulnerability. So I would expect the US to start investing more in domestic mining and processing in partnership with Latin American countries like Chile, Argentina, and Brazil, through grants, tax incentives, joint ventures with US companies in Latin America. Um, also with copper strategic stockpiling to support and finance joint ventures in Latin America. And of course, rare earth, expand domestic production and secure allied supply chains in Australia, Canada, South America to develop processing and refining infrastructure. So I would say that that would be a smart move on the part of the US administration.

All right. Does anyone else want to jump in to expand on that one a little further?

Well, I think, you know, I think the US, and keeping in mind that it takes about seven years, if you're lucky, from a mine concept to get to a point of being to extraction, and it takes three or four years to build a metal processing plant, get through all the permitting process, etc. So right now, China is not the biggest miner of critical minerals, but it is by far the biggest processor. And so the question is, you know, I think the policy thinking coming out of Washington till now has been, "We'll do this all ourselves. We'll expand our own mining industry. We'll expand, we'll invest in processing." But I think they can't do it alone. And I think this is where they really need to lean upon their allies with like Canada and Australia, who are well-financed mining leaders, but also in Latin America, Chile, Argentina, possibly Bolivia, because those countries, their dream has always been to move beyond just extraction and to be involved in downstream processing. And so I think that US capital can quickly move and develop processing, and we're starting to see it. As Sebastian pointed out, there are plans to build more of these, but I think this could really be accelerated quickly. Not so much around new mines, but around new processing and take that business away from China. That's the key. It's, but it's not going to happen. It's still going to take two or three or four years. So, but that's where I think the US needs to focus: build those alliances, not try to do it alone.

Yeah, 100% I agree with you. That's the medium to long-term vision that we have and that we continue to hear in different conferences from different companies in the private sector. The opportunities that Latin America face in the next decade, I don't think they will repeat. It's like what we saw in Southeast Asia back in the 70s and the 80s. That's what we may stand to see in Latin America if we play our cards right, especially attracting investment in those key sectors: critical minerals, pharmaceuticals, the automotive space. That's where the opportunity lies. And also on trade diversification because what we have seen, and that's part of the last question that we got regarding companies in Canada and Mexico de-risking from the US and looking into alternative markets, that's where we are going to see more and more trade missions, more diversification within Latin America to find new buyers, new suppliers, and creating new trade routes because even though that the US is forcing these shifts in the supply chain, the reality is that countries have also decided that they cannot be dependent on either the US or China. Even though that they're their leading trading partners, they need to diversify and put their eggs into different baskets. And I believe that's the positive effect of the US tariffs, of the US-led disruption when it comes to forcing companies and the private sector to become more entrepreneurial and to go and find new

markets and new services. Uh, that's that's where I truly believe Latin America stands to gain in the next five years.

Yeah. In fact, there's an additional question around diversification of uh of trade and and I've recently been involved in conversations, uh pretty high-level conversations in both Canada and Mexico around this issue, and both countries come from very different points of view.

So, Canada, the bulk of its exports fall into two areas: either commodities, so oil and gas. Uh, 60% of US oil imports come from Canada versus about 8% from Saudi Arabia, just to sort of put it in perspective. um, but also, you know, minerals, um, agricultural goods, etc. Those products are commodity in nature and can be sold anywhere. Uh, they may not get quite the same price, or or the additional logistical cost of delivering those products to Asia or Europe, uh, will take away some of the profits from Canadian producers, but nonetheless, they have the ability to diversify. And in fact, Canada's working pretty hard to build the infrastructure to move, >> particularly the oil and gas, to Asia.

Uh, uh, the other part, uh, where Canada exports is is business-to-business technology and services in support of usually natural resource sectors, and Canada's quite good at this. And this is where we're seeing the opportunity by Canadian companies who've never really looked beyond the United States. I mean, why bother? The US is such a nice market. Pay well, pay on time. Um, but now they're looking more actively at Latin America. And for that, it's it's uh, they're looking at Latin America as almost a supply side. So, on the one hand, the mineral industry is looking to Latin America to to increase their share of global production and make themselves more relevant to the Americans. On the other hand, the service providers from Canada are looking to Latin America's resource economy, which is very strong, uh, for more opportunities.

Um, on the Mexico side, it's it's a very different story. Their export footprint is, um, a combination of of manufactured goods, either intermediate goods or finished goods. Uh, the problem there is that most of those supply chains run through the US. So, in other words, even if they're uh producing goods that are uh for a for a given company, in fact, often times that company owns the factory in Mexico. So, there's really, unless that company moves their supply chain out of the US, it's difficult for that Mexican export to move. They're they're beholden to their US customer, whether it's an assembler who takes a component from Mexico or a company that redirects that finished good to markets around the world.

The other is u Mexican natural resources, um, which, you know, oil is uh is a declining um commodity export. Uh, Mexico is now a natural gas importer importer from the United States. Um, there are agricultural good products that can be moved elsewhere. That's definitely a possibility. But again, agriculture, um, logistics costs become a huge part of the the end cost of that. So, the ability to move Mexican tomatoes or other Mexican horticultural goods to other markets in is limited. Um, so they're in a much tougher position to diversify their export volumes elsewhere, and a lot of those roads lead through the United States. So, whereas the Canadians are a more flexible position to diversify. So, um, diversification is is not as easy as uh as a simple political decision.

All right, thank you so much, John. I do see another question that came in now that that's about uh the seven processing plants that were mentioned earlier in the presentation. Uh, the question is whether these are mostly Chinese-owned or Chinese local joint ventures.

>> Um, there's Chinese joint ventures involved mostly in Argentina. Um, what I can do, I'm actually writing a report on these seven plants. Um, and I can send it if if we get the uh the viewers u email.

Um, >> sure. We have that uh we have that there. So, will you be able to reach out to this is our >> I can send them the the name uh, you know, when it's going to be online capacity and such.

>> All right, that sounds good. Well, I think that's going to wrap us up. We want to thank all of you for having joined us today. I want to thank all the presenters that came out as well. I also want to thank the folks that have stayed with us throughout the Q&A section and hung in there. We hope that you all have a wonderful day, and we hope that the information that we've shared today is useful to you. By all means, you have our contact information there on the screen, so feel free to reach out, and we hope that all of you have a wonderful, successful 2026 in Latin America and beyond. Thank you.