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IMF + J.P. Morgan on Latin America: A Combined Outlook—and a Miami-Dade Legal Playbook for 2025

One Macro Story, Two Lenses

• Growth: The IMF’s Western Hemisphere outlook pegs LAC’s 2025 growth near ~2.0%, down from ~2.4% in 2024, reflecting weak investment and lingering productivity frictions. Translation: growth yes, but not a boom. ( IMF)
• Inflation and policy: Inflation continues easing toward targets, allowing gradual monetary loosening. The IMF urges policy rebalancing—advance fiscal consolidation to rebuild buffers while protecting priority public investment and social programs. ( IMF)
• Currencies: J.P. Morgan’s mid-year reads point to softer LATAM FX into late-2025/2026 as U.S.–LAC rate gaps compress; house research also flags a weaker dollar backdrop that could make EM FX out-perform in bursts—i.e., volatility both ways. ( J.P. Morgan Private Bank)

Country and Sector Nuance You Can’t Ignore

• Argentina: From a deep trough, rebound dynamics can lift the regional average. Watch FX path and index re-weights that may alter flows. J.P. Morgan’s LATAM desk explicitly tracks year-end currency levels and direction. ( J.P. Morgan Private Bank)
• Brazil: Consumer resilience meets fiscal anchors and still-elevated real rates—supportive of disinflation, less so for heavy capex. Expect gradual rate relief, not a flood. ( IMF)
• Mexico: Trade-linked, sensitive to U.S. cycle and tariffs; remittances stabilize from highs. Contract for policy uncertainty via MAC and tariff pass-throughs. ( JPMorgan Chase)
• Andean trio (Chile/Peru/Colombia): Mining capex and metals pricing drive sentiment. Tenders and concessions hinge on regulatory clarity and community consultation. Use pre-closing conditions that de-risk permitting. ( J.P. Morgan)

The Miami-Dade Legal & Contracting Playbook

1) Pricing & FX: Make Currency Risk Explicit

• Dual-currency clauses: Price in USD; permit settlement in local currency at a named fixing (e.g., WM/Refinitiv) within a tight window to prevent “rate-shopping.”
• FX collars: For recurring shipments, build automatic bands that adjust unit prices if FX breaches ±X%. This avoids constant renegotiation when policy paths diverge.
• Netting & setoff: If you buy and sell with the same counterparty, net cash flows; pair with payment-waterfall language to limit disputes.

2) Terms, Credit & Collections: Tighten Without Killing the Deal

• Dynamic early-pay discounts linked to local policy rates; as inflation falls, counterparties have more room to accept.
• SBLCs/export credit insurance for slower-growth or fiscally-tight jurisdictions.
• Security packages: UCC-1 on U.S. assets; trust receipts/warehouse receipts where enforceable; reservation of title for fungibles.
• Information covenants: Quarterly financials; notify on material adverse change (MAC) events (tariffs, capital controls, tax shocks).

3) Delivery, Force Majeure & Climate

• Incoterms buffers for weather and port congestion; define documented triggers for climate events that adjust delivery windows/volumes.
• Supply-chain reopener: If freight or insurance spikes past a threshold, allow price talks or volume shifts.
• Arbitration-ready: Agree ICC arbitration seated in Miami (neutral, enforceable under the New York Convention), with law and language specified.

4) Data, Privacy, and AI

• DPAs that address cross-border transfers, subprocessors, SLAs, and government access requests. Local uptime/support realities should be baked into credits and cure periods.
• For fintech/payments, ensure KYC/AML reps and audit rights across distributors and sub-agents.

5) Anti-corruption & Sanctions

• Annual re-certifications for FCPA, anti-bribery, and sanctions compliance; third-party diligence documented; reps tied to termination for cause plus indemnities.
• In government tenders, mirror multilateral flow-downs (reporting, ESG, procurement integrity) into subcontracts to avoid vicarious breaches.

For Founders & Investors: Valuations, Rounds, and Portfolios

• SAFEs vs. priced rounds: Where country risk and FX are material, a priced round with clear governance and information rights can reduce perceived risk compared with stacked SAFEs.
• Working capital: Build revolvers, AR factoring, or supply-chain finance to bridge longer tenors as counterparties adapt to consolidation. ( IMF)
• Trademarks & IP: File at USPTO first; extend to priority LAC markets via Madrid Protocol. Secure IP assignments from contributors; audit OSS use.
• Portfolio construction: J.P. Morgan’s LATAM “Guide to the Markets” helps set a mix between hard-currency debt (EMBI/CEMBI) and local markets (GBI-EM) depending on your FX and sovereign-risk tolerance. ( J.P. Morgan)

Sector Focus: Where the Macro Meets the Contract

• Energy & Infrastructure: Policy supports capex but with scrutiny. Bake in input-cost adjusters and milestone-based payment hardening; include force-majeure and change-in-law clauses. IMF’s caution on buffers means public sponsors will care more about documentation quality. ( IMF)
• Metals (copper/lithium): Long-cycle projects hinge on permits, easements, and community agreements. Close consultations and environmental studies before big checks; add representations on title and surface/mineral rights. ( J.P. Morgan)
• Digital services (fintech/AI/SaaS): Opportunity improves as inflation fades and rates fall, but regulators are active. Lock data-localization terms (where applicable), service credits, and security incident notification standards.

Cross-Border Governance That Reduces Friction

• Governing law & forum: Choose ICC arbitration—Miami seat or other neutral venue; specify law and language; include forum non conveniens waiver.
• Macro-aware MAC: Name the events— tariff hikes, FX devaluation thresholds, capital controls—that reopen pricing or permit termination without penalty.
• Financial reps & audits: Require audited statements, no default/sanctions reps, and quarterly information covenants.
• Compliance training: Annual training for agents/distributors; map third-party risks with a lightweight register.

Practical Checklist for Q4-2025 to 2026

• Update LATAM templates: Add dual-currency terms, FX collars, reinforced force majeure, price-adjusters, and Miami-seated arbitration.
• Re-underwrite counterparties: Annual KYC/credit tied to audited financials; add notice covenants for material adverse changes.
• Tighten collections: Shift higher-risk markets to SBLCs or documentary collections; where open account remains, use trade credit insurance.
• Sequence market entry: Prioritize jurisdictions with easing inflation, credible policy, and enforceability—consistent with the IMF’s rebalancing message. ( IMF)
• Model sensitivities: Run FX/rate scenarios on revenue and COGS; set renegotiation triggers in long-tenor supply deals.
• Protect the brand: Register trademarks early; require local-language brand protections in distributor agreements.

Key Takeaways (Lawyer’s Cut)

• The IMF and J.P. Morgan agree: moderate growth, gradual disinflation, and FX that can swing as policy paths evolve. Plan for steady—not sizzling—demand. ( IMF)
• Alpha lives in clauses: the right FX, MAC, pricing, and arbitration language can convert macro uncertainty into manageable risk.
• Miami-Dade advantage: bilingual talent, international banking, and arbitration infrastructure—use them as built-in de-riskers for U.S.–LAC deals.