Latin America’s Digital Trade Boom Holds Vast Untapped Potential

Digitally delivered services include activities that can be supplied across borders through online networks, allowing businesses to reach customers abroad without establishing a physical presence in every market.

Digital trade is opening new routes to global customers for businesses across Latin America and the Caribbean, giving software developers, designers, consultants, financial specialists and other service providers the ability to export their expertise without shipping a physical product. A new report from the World Trade Organization Secretariat, the Inter-American Development Bank and the World Bank finds that this shift could become a powerful source of economic growth, job creation and wider participation in international markets.

Titled Digital Trade in Latin America and the Caribbean: Connecting Markets, Powering Growth, the report shows that exports of digitally delivered services from the region have increased fivefold over the past two decades, growing faster than exports of goods and other services. Despite this expansion, Latin America and the Caribbean account for only 2% of global exports in this category, revealing a wide gap between the region's existing performance and its potential.

Digital Services Could Become a Bigger Export Engine

Digitally delivered services include activities that can be supplied across borders through online networks, allowing businesses to reach customers abroad without establishing a physical presence in every market. This model creates valuable opportunities for smaller companies, independent professionals and entrepreneurs who may struggle with the costs and complexity of traditional exporting.

The report estimates that greater digitalization, wider use of emerging technologies and stronger policy improvements in economies currently performing below their potential could increase the region's exports of digitally deliverable services by an average of 4.5% each year. Such growth could support new employment, diversify economies that depend heavily on commodities and help local firms enter markets that were previously difficult to reach.

Capturing these gains will require more than giving companies access to digital tools. Reliable broadband, affordable connectivity and open markets for essential technology inputs shape whether firms can offer competitive services, while access to finance determines whether they can invest in equipment, staff, cybersecurity and international expansion.

Regional Digital Links Remain Underdeveloped

Latin American and Caribbean economies also have room to trade more digital services with one another. Intra-regional digital trade remains limited when compared with Europe, Asia and North America, and its share is considerably lower than the level of goods exchanged within the region.

Stronger regional connections could help businesses gain international experience closer to home, reach customers with similar languages and commercial cultures, and build partnerships across neighbouring economies. Better coordination of regulations, smoother cross-border payments and compatible digital systems could reduce the practical barriers that often discourage smaller firms from serving customers in nearby countries.

Customs and logistics still matter because much of digital trade supports or accompanies physical products sold through online platforms. Slow border procedures, expensive deliveries and uncertain rules can weaken the benefits of e-commerce even when companies have strong websites, digital payment options and access to international buyers.

Practical Reforms Can Turn Potential Into Growth

The report identifies several areas that influence an economy's ability to take part in digital trade, including infrastructure, connectivity, regulatory policies, payment systems, logistics, customs procedures, export promotion, business capabilities, digital skills and access to finance. Progress across these areas can give companies a more dependable environment in which to develop services, find customers and receive payments securely.

Each country faces a different mix of obstacles, meaning governments can choose policy actions that reflect their own economic conditions, institutional capacity and development priorities. A customized plan can help officials decide which reforms deserve immediate attention, identify the resources required and bring businesses, workers, financial institutions and public agencies into the process.

The WTO, IDB and World Bank can support these efforts through technical assistance, policy guidance and financing within their respective mandates. With focused investment and practical reforms, Latin America and the Caribbean could claim a larger share of global digital trade while ensuring that its benefits reach more businesses, workers and communities.