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Destination Central America
 

Destination Central America

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    Destination Central America Destination Central America Presentation Transcript

    • Destination Central America: Latin America’s Newest Emerging Market International Trade Association of Greater Chicago March 9, 2005
    • Topics
      • Central America at a Glance
      • Why Export to Central America?
      • Central America --Then and Now
      • Central America -- Trade Data
      • The “CA-5”
      • Challenges / Opportunities
      • On the Horizon / CAFTA-DR
      • Programs / Services in Central America
    • The Region at a Glance
      • 16th Largest Market for U.S. Exports
      • U.S. Exports = $11.4 Billion (2004)
      • Market Larger than India, Russia and Indonesia - combined
    • The Region at a Glance Population (millions) Source: CIA World Factbook
    • The Region at a Glance Gross Domestic Product Source: Secretaria de Integracion Economica Centroamericana (SIECA)
    • Why Export to Central America?
      • Democratic Governments
      • On-going Market Liberalization
      • Growing U.S. Hispanic Population
      • Proximity to U.S.
      • 50% of Region’s Imports are from the U.S.
      • CAFTA-DR and FTAA will Spur Investment, Economic Growth, and Increased Trade
    • Then and Now
      • Banana Republics
      • Civil War
      • Political Unrest
      • Limited Agricultural Economies
      • Economic Instability
    • Then and Now
      • High-Tech Corridors
      • Tourism and Services
      • Development of Non-Traditional Sectors
      • Stable Democracies
      • Sustainable Economies
      • Niche Markets
    • Central America: Trade Data Largest Industry Segments Source: CIA World Factbook
    • Central America: Trade Data
    • Central America: Trade Data Source: Country Commercial Guides from Central America and Economic Office Guatemala
    • Central America: Trade Data 2004 Exports to and Imports from the U.S. Source: U.S. Department of Commerce
    • Central America: A Real Market Source: USDOC/ITA – F.A.S./Customs Basis
    • Illinois’ Exports to CAFTA-DR
      • Exports totaled $211 million 2004
      • 23% increase over 2003
      • Costa Rica largest market for Illinois in region
      • 98% of exports manufactured goods
        • Communications equip
        • Grain & oilseed milling products
        • Motor vehicle parts
        • Electrical equip
        • Plastics
    • The CA-5: Guatemala
      • Largest Economy in Central America
      • Economy Nearly Completely Privatized
      • Tax Collections are about 10% of GDP
      • Tariffs are Relatively Low (1-17%)
      • for Almost All Products;
      • VAT is 12%
    • The CA-5: Honduras
      • Competitive Labor Costs
      • U.S. Accounts for 50% of All Foreign Trade
      • The Maquiladora Industry Accounts for 15% of GDP and 11% of Exports
      • Puerto Cortes is the Largest Port in Central America
      • U.S. has 40% of FDI in Honduras
      • 4 int’l airports
    • The CA-5: El Salvador
      • Smallest Country in Central America. Densely Populated
      • Over 1.5 Million Salvadorans Live in the U.S.
      • Foreign Trade Grew 400% between 1992-2000
      • Aggressive Trade Policy = Rapid Economic Develop.
      • Dollarized economy
    • The CA-5: Nicaragua
      • Safest Country in Central America
      • Price Controls Phased-out
      • Privatization
      • Rich in Natural Resources
      • Lack of Diversity in Sector
      • Development
    • The CA-5: Costa Rica
      • Highly-Educated Workforce
      • Most Politically Stable Country in Region
      • Booming Tourism Industry
      • Privatization Limitations
      • 95% Literacy Rate
      • Small Population but High GDP & FDI
      • Market Openings Expected Under CAFTA-DR
    • Central America is an Open Market
      • Tariffs are Relatively Low (1-17%)
      • VAT Average - 12%
      • Almost No Import Restrictions
      • Standards are Similar to the U.S.
      • Labeling/Testing not a Problem
      • Variety of Qualified Agents and Distributors Available
      • Growing English Use in Business
    • Opportunities: Best Prospect Industries
      • Automotive Parts and Service Equipment
      • Food Processing/Packaging Eq.; Processed Foods
      • Electric Power Generation / Distribution Equipment
      • Hotel and Restaurant Equipment
      • Franchising
      • Security and Safety Equipment and Services
      • Telecommunications
      • Construction Equipment
    • Challenges
      • Financial Reform
      • Respect for Contracts
      • Investment Protection
      • Judicial Reform
      • Export Promotion
      • Corruption
      • Education
      • IPR Protection
      • Security
      • Start-ups; SMEs; Entrepreneurship; Leadership
    • Central America: On the Horizon
      • Maquila Sector will take a hit in 2005. China.
      • Central America 100% Dependent on Imported Oil
      • Increased Overseas Remittances
      • El Salvador - $2.5 bil, Guatemala - $2.5 bil, Honduras - $1.2 bil, Nicaragua - $519 mil
      • CAFTA-DR
    • CAFTA-DR: U.S. Benefits
      • Comprehensive reciprocal Trade Agreement; not unilateral like CBI/CBTPA
      • More than 80% of U.S. manufactured exports duty free immediately; remaining over 10 years
      • Market access to services market such as telecom & insurance
      • Better business and investment climate—transparency, procurement, investment protection
    • CAFTA-DR: Regional Benefits
      • Better Access to Central American Market
        • Improved Movement of Goods within CA-5; Customs
      • Larger Availability and Quality
      • of Products for Consumers
      • Enforcement of Labor Rights
      • Protection of Environment
      • Better Investment Climate
    • CAFTA-DR: What’s Happening?
      • U.S. firms have regionalized operations
        • Proctor & Gamble, Abbott
      • CA firms are regionalizing
        • La Fragua, Roble, Banco Cuscatlan
      • Regionalization: Power grid; Customs; Highway integration
      • Negotiating as a group
    • CAFTA-DR: What’s Happening?
      • Ratified by El Salvador and Honduras; other CAFTA countries next few months
      • Implementing legislation to Congress within a month
      • Vote in Congress likely before summer
      • Lightening rod for opponents of free trade
    • CAFTA-DR: Factoids
      • CAFTA will open Central America to the U.S.
        • The U.S. is already open to CAFTA
      • Textiles: 2 nd largest market for U.S. textile fabrics and yarns.
        • T-shirt made in CA 60-70% US. Content. China <10%
      • Sugar: Increased quotas
        • Equal slightly more than one day’s U.S. production
      • Labor and Environment
        • CAFTA keeps up the pressure for reform
      • CAFTA supports freedom, democracy and economic reform in our neighborhood
    • A Sampling of our Services in Central America
      • In-Depth Counseling of U.S. Firms
      • Gold Key Service
      • International Buyer Programs
      • Platinum Key Service
      • Customized Market Research
      • International Sector Analyses / Market Insights
      • Contact Lists
      • Advocacy
      • International Company Profiles
      • International Partner Searches
      • Country Commercial Guide
    • CS San Jose CS Guatemala CS Honduras Commerce Nicaragua Commerce El Salvador
    • CS Central America Regional Industry Sectors
      • Apparel, Textiles & Equip
      • Automotive Parts and Service Equip
      • Computers & Software
      • Construction Equip & Services
      • Food Processing & Packaging
      • Franchising
      • Hotel & Restaurant Equip
      • Medical Equip & Pharmaceuticals
      • Telecom Equip & Services
    • CS Central America: On the Horizon
      • International Franchise Expo, Washington DC Apr 2005
      • Waste Expo, Las Vegas May 2005
      • Nat’l Restaurant Hotel Motel Show, Chicago May 2005
      • SUPERCOM, Chicago Jun 2005
      • Clinical Laboratory Exposition, Orlando Jul 2005
      • MAGIC, Las Vegas Aug 2005
      • Pack Expo, Las Vegas Sep 2005
      EVENTS
    •  
    • Other Useful Contact Information
      • Office of the United States Trade Representative
      • Website: www.ustr. gov
      • • Business Coalition for U.S.-Central America Trade
      • Website: www.uscafta.org
      • • U.S. Commercial Service in Central America
      • Website: www.buyusa.gov/centralamerica/en
      • • Trade Compliance Center, U.S. Dept. of Commerce
      • Website: www.tcc.mac.doc. gov
      • • USDOC CAFTA Website
      • Website: www.ita.doc.gov/ cafta
    • IMPRESSIONS/ CONCLUSIONS
      • 50% of Region’s Imports Come from the U.S.
      • Region in General is Peaceful, Democratic
      • Trying to Find a Foothold in the Global Economy
      • Markets are Close to the U.S.
      • Regional Integration and CAFTA-DR will spur more Investment, Economic Growth, and Trade
      • Markets are Growing