Dear readers,
Welcome to edition #03. This week, we analyze two massive shifts that are redefining regional competitiveness: Brazil’s strategic move to bypass the Panama Canal and Chile’s $24B bet on seawater to save its mining sector.
Strategic Outlook: why Brazil is architecting a new continental logistics backbone.
Deep Dive: how Chile is decoupling its economic growth from water scarcity.
Market Intelligence: sectoral snapshots from Argentina’s livestock efficiency to Venezuela’s aviation reopening.
Policy & Macro Watch: updates on labour reform in Argentina and Mexico’s critical minerals trade plan.
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❐ STRATEGIC OUTLOOK
Continental Integration: Brazil’s Multi-Billion Dollar Infrastructure Push
South America is entering a transformative era of physical and regulatory integration, driven by a renewed strategic push from Brasília. On February 3rd 2026, the Brazilian government formalized the "South American Integration Routes Program" (Programa Rutas de Integración Sudamericana), a historic initiative aimed at repositioning Brazil as a continental logistics hub. Coordinated by the Ministry of Planning and Budget, this program moves beyond highway construction; it seeks to link Brazil’s industrial and agricultural heartlands with the Pacific coast, creating a land-based alternative to the increasingly congested and climate-vulnerable Panama Canal.
Five strategic arteries for a continental vision
The program is built around five strategic routes designed to integrate all Brazilian states with their neighbors and the Pacific. These corridors represent more than 190 infrastructure projects, including roads, railways, ports, and digital infrastructure.
The program orchestrates five strategic arteries - spanning from the Amazonian north to the flagship Capricorn Bioceanic Corridor - linking Brazil’s industrial heartlands directly to Chilean Pacific ports. The Capricorn Corridor is a 2,400 km network crossing Brazil, Paraguay, Argentina, and Chile. It is expected to facilitate the movement of over 8.6 million tons of goods annually, primarily agro-industrial and mining products, reducing logistics costs by up to 30-40%.
The Brazilian government is impulsing a 5 Roads initiative for continental integration
Following the market to the Pacific
The fundamental driver of this "Bioceanic Pivot" is the radical shift in global trade dynamics. More and more, Brazil’s primary trading partners are located across the Pacific in Asia, led by the intense economic expansion of China. By establishing efficient land routes to Chilean ports like Antofagasta and Iquique, South American exporters can bypass the Atlantic-dominated maritime routes, significantly shortening transit times to Asian markets. Brazil and China have become close trade partners and this relation could deepen even further in the future. Brazil’s president Lula recently opened the door for a Mercosur-China partial trade agreement.
Furthermore, the program aims to internalize development. By incorporating 16 non-bordering Brazilian states - which represent 73% of the national GDP - into these routes, Brasília is fostering a "mindfacturing" and export-led industrial strategy that bridges the Atlantic and Pacific systems.
Regulatory and financial catalysts
Integration is no longer just about "concrete and steel". Brazil’s recent ratification of the TIR Convention (to take effect in July 2026) is a key move that will simplify customs procedures and streamline international transit at borders. This regulatory alignment is being mirrored by a massive financial commitment. The program is backed by a $10 billion "Conexión Sur" initiative, with $3 billion from Brazil’s BNDES and $7 billion from regional development banks like the IDB, CAF and Fonplata. The recent 200 million IDB loan to Paraguay for its section of the Bioceanic Corridor highlights the multilateral momentum behind these corridors.
However, despite the high-level political will, significant "above-ground" risks remain regarding this ambitious plan: success depends on the continued alignment of 11 South American nations and the harmonization of disparate customs and sanitary regulations. Moreover, the routes pass through sensitive biomes, including the Chaco and the Amazon. Consequently, the program has established socio-environmental responsibility and "transversality" as core pillars to ensure local communities and biodiversity are protected.
🎯 Strategic perspective
The formalization of the South American Integration Routes could mark the end of South America’s historical "Atlantic-only" focus. By architecting a multi-modal land bridge between two oceans, Brazil is not just building roads; it is creating a sovereign logistics shield. This infrastructure could allow the region to dictate its own trade terms in an era where traditional maritime chokepoints are increasingly vulnerable.
❐ DEEP DIVE
The Blue Gold Rush: Chile’s $24B Desalination Strategy
Chile is currently navigating a paradigm shift in its water management strategy. A "mega-drought" lasting over 13 years has pushed the country toward a critical realization: continental water resources are no longer sufficient to sustain both its population and its primary economic engine, mining. In response, Chile has turned to the Pacific Ocean, launching a massive infrastructure pipeline of 51 new projects representing a total investment of over $24 billion.
Chile’s mining sector is driving a “desalination boom” along its 4.300 km Pacific coastline
💡 Key Takeaways
Mining as the driving force and principal beneficiary: the mining sector is the main architect of this "desalination boom". Facing regulatory mandates to limit continental water use to just 10% in 2025, companies like BHP and Antofagasta Minerals have pivoted toward the sea to ensure operational continuity. A necessary shift as ore grades decline and processing requires significantly more water precisely when aquifers are most depleted. By 2034, it is projected that 70% of all water used in copper mining will come from desalinated or raw seawater.
Transport, not technology, is the real hurdle: while reverse osmosis technology is now considered a mature and efficient process, the true strategic challenge for Chile lies in logistics and energy. Pumping water from the coast to mines located between 2,000 and 4,000 meters above sea level is a colossal engineering feat. It can cost three times more than the desalination plant itself, with energy consumption accounting for approximately 70% of total operating costs. To mitigate these costs, the industry is shifting toward "shared infrastructure" models and innovative "water swaps" to improve regional efficiency.
A milestone in regulatory certainty: for years, the sector operated under a fragmented legal framework, causing permitting bottlenecks that could last up to six years. The January 2026 approval of a new National Desalination Strategy (Bulletin 11608) finally provides legal certainty by establishing a clear 30-year concession regime and empowering the General Water Directorate (DGA) to oversee the industry. Crucially, the law also prioritizes human consumption, attempting to bridge the gap between industrial needs and social stability.
Environmental and social friction: despite the economic promise, the "boom" faces significant headwinds. Environmentally, the disposal of brine (high-salinity waste) remains a primary concern for marine ecosystems and local fishing communities. Socially, the high cost of desalinated water - which can be ten times more expensive than groundwater - remains a barrier for small-scale agriculture, creating a "water inequality" where only large-scale mining can afford the transition.
Future developments: looking ahead, 2026 is ushering in an era of multi-purpose infrastructure designed to share CAPEX across mining and urban supply. This demand is further accelerated by the green hydrogen nexus, which requires high-purity water for electrolysis, while the new law simplifies permitting to cut down the standard six-year development cycle.
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❐ MARKET INTELLIGENCE
❍ AGRIBUSINESS & FOOD SYSTEMS
Argentina: US trade deal lowers barriers for dairy exports
The US and Argentina signed a reciprocal trade agreement removing tariffs of up to 28% on milk powders and dairy proteins. The deal establishes a 1,000-tonne tariff-free quota for US cheeses and grants legal protection to 39 common cheese names like "parmesan," facilitating market entry for American suppliers. (Food & Drink International)Peru: sustainable agriculture targets 30% emission reduction by 2030
Led by initiatives from firms like BASF, Peru is transforming its agricultural sector into a carbon sink through digital tools and practices like minimal tillage. New programs aim to reduce emissions in strategic crops like rice and corn by 30% by 2030, leveraging the fact that agriculture currently represents 66% of national emissions. (Agroperú)Argentina: livestock sector shifts toward heavier slaughter weights
The Argentine beef industry is evolving toward a more efficient model, increasing average slaughter weights to 231kg per head - a 5kg increase since 2023. This shift, supported by a 33% increase in feedlot participation and lower grain prices, aims to boost total production beyond the historical 3 million tonne stagnation point. (Infobae)
❍ MINING & CRITICAL MINERALS
US and Mexico unveil coordinated trade plan for critical minerals
The US and Mexico unveiled a 60-day plan to develop coordinated trade policies for critical mineral supply chains to mitigate vulnerabilities. The initiative explores establishing price floors for certain mineral imports and focuses on identifying specific mining and processing projects to ensure North American economic security. (Reuters)
❍ ENERGY & SUSTAINABILITY
Paraguay: new decrees target $15 billion in electro-intensive investments
The Paraguayan government has introduced 10-year tariff predictability to attract data centers for AI and green hydrogen producers. By reserving 500 MW for these industries, officials estimate a potential long-term investment of $15 billion, using the country's hydroelectric surplus at a projected cost of $29 per MWh. (Última Hora)Argentina: Vaca Muerta expected to drive $10 billion energy surplus in 2026
Improvements in the Vaca Muerta shale formation are projected to lift Argentina's energy trade surplus to between $8.5 billion and $10 billion in 2026. State-controlled YPF and partners are investing $2 billion in the "Oil Sur" pipeline, aiming for $15 billion in annual exports once fully operational. (Reuters)
❍ MANUFACTURE & INDUSTRY
Brazil: footwear industry loses 10,900 jobs due to US tariffs
The Brazilian footwear sector ended 2025 with a negative balance of 3,000 jobs following a sharp downturn in the second half of the year. Industry body Abicalçados attributes the 15,700 layoffs between August and December directly to the new additional tariffs imposed by the US on Brazilian exports. (Fashion Network)Brazil, Colombia leverage regional “nearshoring” as strategic textile alliance
Brazil and Colombia are deepening a 25-year textile partnership, combining Brazil’s massive production scale (valued at $42 billion) with Colombia’s design and fashion expertise. The alliance aims to reduce dependence on Asian imports by utilizing Brazil's integrated supply chain and Colombia's role as a regional design hub. (Americas Retail)Argentina: local textile industry struggles with high taxes and import surge
Argentine clothing prices remain high due to a tax burden that accounts for 54% of the final retail price. With manufacturing capacity utilization dropping to 37% and imports surging by 71%, local producers are calling for more regulated competition as informal sales continue to dominate 65% of the labor market. (La Gaceta)
❍ INFRASTRUCTURE, TRANSPORT & LOGISTICS
Colombia: CMA CGM inaugurates deep-water operations at Antioquia
French shipping giant CMA CGM docked the 5,900 TEU Fiordland at the newly opened Puerto de Antioquia, the terminal's first major container vessel. The $300 million facility is 33% closer to major production centers like Medellín than existing Caribbean ports, significantly reducing logistics costs for agricultural exports. (Portal Portuario)Venezuela: major airlines resume Caracas flights
Following diplomatic contacts between Donald Trump and Delcy Rodríguez, airlines including Air Europa, TAP, Latam, and Avianca have announced the gradual resumption of flights to Caracas starting February 2026. This reopening aims to restore connectivity that was largely severed in late 2024. (BioBioChile)Mexico’s regulators probe Viva Aerobus and Volaris holding company
The proposed creation of "Grupo Más Vuelos," which would group low-cost carriers Viva and Volaris under one parent, is under review by Mexico's National Antimonopoly Commission. Regulators are assessing whether the combined entity, which holds 40% of the total market, could lead to higher average ticket prices despite maintaining separate brands. (Mexico Business News)
❍ DEFENSE & SECURITY
Colombia: construction begins on first national frigate for 2030 delivery
Colombia has officially started building its first locally designed and manufactured frigate, the Plataforma Estratégica de Superficie (PES). Led by Cotecmar, the project positions Colombia as the third country in Latin America with frigate-building capacity and is expected to generate 1,500 direct jobs. (Radionacional)
❍ TELECOMS, TECHNOLOGY & INNOVATION
Chile: Telefónica exits market in $1.1 billion sale to NJJ and Millicom
Telefónica has sold its Chilean subsidiary to Xavier Niel’s NJJ (51%) and Millicom (49%) for a total value of approximately $1.1 billion. The move is part of the Spanish firm's strategy to divest from Hispanic American markets and focus on its core operations in Spain, Brazil, Germany, and the UK. (Cinco Días)
❍ TOURISM, LEISURE & SPORT
Caribbean: $1.5 billion Punta Cana resort leads 2026 expansion
The tourism sector is seeing a wave of high-end investments in the Caribbean and Central America, including the $1.5 billion "Moon Palace The Grand Punta Cana" in the Dominican Republic. Other key projects for 2026 include the Four Seasons Caye Chapel in Belize and JW Marriott Costa Elena in Costa Rica, both emphasizing environmental conservation and luxury. (El Salvador)
❐ POLICY & MACRO WATCH
Brazil: Lula’s "Golden Moment" sees record investment and 4% inflation
The Brazilian economy is experiencing an exceptional period, creating 1.7 million jobs and reaching record foreign direct investment of $15 billion in 2025. Despite high interest rates, the Bovespa index has risen 15% in early 2026, with January alone seeing a net foreign capital inflow of nearly $5 billion. (La Política Online)Colombia: Trump and Petro meet to reshape bilateral relationship
In a two-hour White House meeting, Presidents Donald Trump and Gustavo Petro moved to repair ties previously strained by public clashes. The dialogue focused on regional stability and drug trafficking, with Colombia agreeing to resume measures like glyphosate fumigation in exchange for continued US cooperation. (El País)Argentina: Senate passes Milei’s controversial labour reform amid protests
A major overhaul of Argentina’s labour laws passed the Senate, signaling a win for President Milei’s pro-market reforms. The legislation focuses on extending trial periods and facilitating dismissals to stimulate formal employment. Despite triggering significant protests, the bill moves to the House of Representatives, where it is expected to face its final vote. (France 24)Mexico: Sheinbaum vows to maintain support for Cuba despite US sanctions
President Claudia Sheinbaum has committed to continued food and diplomatic support for Cuba, criticizing the US embargo as "unjust." While Mexico is currently navigating US threats of reciprocal tariffs on countries selling oil to Havana, the administration is seeking diplomatic pathways to resume energy shipments. (El País)Mexico: financial appeal masks structural economic stagnation
Despite attracting record portfolio investment and maintaining a strong "super peso" due to 11% interest rates, Mexico's real economy faces an "uncertainty trap". Analysts warn of another "lost six-year term" as fixed investment fell 7% in late 2025 and productivity continues a steady decline. (Funds Society)Guatemala: US trade agreement grants zero tariffs to 70% of exports
President Bernardo Arévalo signed a reciprocal trade deal with the US, ensuring that 70% of Guatemalan exports will face zero tariffs. The agreement is expected to provide a significant boost to the textile, manufacturing, and agro-industrial sectors, which sent $4.3 billion in goods to the US in 2025. (Diario Estrategia)
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