Posted at 11:56 AM
Created on February 24, 2014
Are you a minority business enterprise? Look south for your next customer! Secretary of Commerce Penny Pritzker announced the Look South initiative in January. The initiative is a U.S. Commerce Department-led, federal effort to encourage entrepreneurs like you to do business with our Free Trade Agreement (FTA) partners in Latin America. The 11 FTA economies are Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, and Peru.
Minority business enterprises have great opportunities in looking south for their next customer, since MBEs are more likely than non-minority-owned firms to export, five times more likely to conduct business in languages other than English, and typically possess cultural knowledge and business acumen that enables breaking into the global market more efficiently and effectively.
That is why the Minority Business Development Agency (MBDA), in collaboration with the International Trade Administration (ITA) and other federal agencies, are working to encourage greater export activity among the nation’s 5.8 million minority-owned and managed firms. Through nationwide MBDA Business Centers and ITA’s U.S. Export Assistance Centers, minority-owned firms have access to financing, market analysis, technical assistance and other services to help expand their reach.
Currently, 58 percent of U.S. firms export to only one country, usually Canada or Mexico. However, companies with two to four export markets have average export sales of $1 million compared to just $375,000 for exports to one country. South America markets are ripe for upside growth. More than half of all America’s FTA partners are in Latin America and these countries are enjoying a rapid growing middle class and economy.
Additionally, these FTA partners have shown increased demands for U.S. products, as well as stable and growing business environments. Doing business in these rapidly growing Latin American markets is now easier than ever. Under the FTAs, U.S. firms enjoy benefits such as low or zero tariff rates for exported products, improved business environment for services and government procurement, reduced market access barriers, and forecasted economic growth. Reports show that 40 percent of all American exports are to Latin America, hence why the region is among the best U.S. trading partner. For example, Mexico is our second-largest trading partner, with U.S. exports to the country reaching in excess of $2 billion in 2012.