Although many manufacturers and retailers in the US are taking advantage of the growing Latin American market, a large percentage are still hesitant to make the jump. What many of them might not understand is that it’s not something they need to do on their own. In an effort to encourage United States-based companies to conduct business in Mexico and other Latin American countries, the U.S. Secretary of Commerce created the Look South Initiative in 2014.
The goal of the program is to encourage American companies to explore business opportunities with the U.S.’s FTA (Free Trade Agreement) partners, as well as lend federal aid to assist companies doing business in the region. The program is based on the idea that having access to information and support will lead to better business decisions and opportunities for growth.
Increased trade with these FTA partners can be beneficial on all sides. Already with more than 40 percent of U.S. exports going to the Americas, exports to these regions are still expanding rapidly. Free trade partnerships help U.S. companies grow, as well as the economy of countries being exported to.
Advantages of Free Trade Agreements (FTA)
The United States has FTA’s with 11 countries in Latin America, including Mexico. These 11 partners share similar economies in several key ways, but perhaps most importantly by having an emerging middle class of consumers.
The FTA partners offer low or zero tariff rates on goods coming from the United States, giving American companies incentive to ship to these countries. In addition, these countries have taken steps to increase transaction transparency by reducing barriers to the market and simplifying customs procedures.
Small and Mid-Sized Companies
While large companies have access to more resources to export internationally, small and mid-sized companies (SME’s) most often do not. The Look South program is geared to focus on these types of companies and allow them to seek out opportunities with FTA’s as well.
As part of the initiative, the U.S. government is working to make financing for trade and investment opportunities available for SME’s. Similarly, the Export-Import Bank, Small Business Administration, Overseas Private Investment Corporation, and the U.S Department of Agriculture have all joined efforts as part of this initiative to enable SME’s to expand to these areas.
The U.S. has created many tools for interested SME’s to utilize, such as an online business portal specifically dedicated to allowing SME’s to understand and research the federal resources available to them. The Small Business Network of the Americas also assists in linking small businesses to potential business partners in the Latin American markets.
For a link to more information, click here.
If your business has not already expanded into the Latin America market, now may be the time.
Sky Postal can also be a key partner when it comes to exporting from the U.S. into Latin America. Experts at shipping, customs, and import requirements – we understand the unique regulations for shipping to each country. Please visit our website at www.skypostal.com for more information.