Latin America cannot catch a break. The Summit of the Americas was supposed to be a coming out party for many Latin American nations. Instead, the U.S. coverage on the Summit focused on the Secret Service prostitution scandal. Indeed an irresponsible act that warrants an internal investigation, but it is unfortunate the scandal overshadowed the outcomes of the Summit. It is not far-fetched for the American audience to assume that nothing else occurred during the Summit, no activities conducted, no advancements made, no progress (whether relative or real) were achieved. In short, it is feasible to conclude the Summit for Americans was an utter waste of time, preserving Latin America’s priority as merely an afterthought in the American mind for many politicians and the American citizenry.
Luckily, it was not a waste of time. Trade and commerce were at the forefront of the Summit’s mission. The U.S. and Latin American nations are realizing that integration, the flow of capital, ideas, and trade are right now the best alternatives towards future growth and stability in the Western Hemisphere.
The business voice was rarely or never heard at prior Summits of the Americas. At Cartagena, that was no longer the case. The Inter-American Development Bank spearheaded a CEO Summit of the Americas, creating space for dialogue between businesses and governments towards facilitating political and commercial cooperative measures throughout the region. Fourteen Presidents and heads of state attended, including President Obama, Brazil’s President Rousseff, Chile’s President Pineda, Mexico’s President Calderon, and Colombia’s President Santos. Also, according to Colombian officials, attendance at the CEO Summit was in such high demand that companies were left out of the limited space, a bullish indication that companies are eager to in expanding their operations across borders.
The Americas as a whole (North America, Central America, the Caribbean & South America) boasts one-third of the world’s GDP - collectively three times bigger than China. The Financial Times published a report revealing that Latin American region’s annual economic output is roughly $5,800 billion. Exclude Argentina, Venezuela and Ecuador, the adjusted outcome still amounts to $4,900 billion, a remarkable figure that is almost three times the amount of India. Undeniably, opportunities exist and U.S. companies are well aware of it. Out of 700 businesses that participated in the summit, 500 of them were foreign-based, and from that pool, approximately 200 of them were U.S.-based.
Maybe the media is not hopping on Latin America’s bandwagon as of yet - which may be a good thing for Latin American nations - but business leaders are certainly cognizant of its potential. According to George Mencio, a partner of Holland & Knight (a U.S. based international law firm) from Washington D.C., U.S. clients have expressed a tremendous amount of interest in Colombia and other Latin America countries. He also noted that the ratification of the FTA, between Colombia and the U.S., has propelled Holland & Knight to position their law firm strategically in order to maximize the increased curiosity in Colombia.
Marriot International’s President and Chief Executive Officer, Arne M. Sorenson, also believes that the FTA is likely to help Colombia's economy grow faster, meaning more opportunities for U.S. and international businesses. Marriot International is projected to double the amounts of hotels operated in Colombia by 2017. When asked which other countries are being targeted for future investments, Mr. Sorensen named a few: Mexico, Costa Rica, Panama, and Chile. What about Argentina? “Argentina is a country with much potential. But right now we’re not ready to invest there because of the political uncertainty” - a sentiment more than likely shared by Spain and Brazil. Mr. Sorensen concluded, “The middle class is growing in Latin America, it is definitely emerging.”
Caterpillar, Inc., a manufacturer of construction and mining equipment, has heavily invested in emerging markets, especially in China. According to William C. Lane, Washington Director of Caterpillar, in addition to China Caterpillar has identified Mexico, Brazil, Peru, and Panama as booming markets for future sales and revenues. “Before, Caterpillar targeted their exports to only rich countries, now they’re (Caterpillar's) top 10 markets are developing countries.”
Caterpillar’s global diversification has shielded the company from the past and present global economic woes, reinforcing the portfolio theory of not putting your eggs in one basket, diversifying markets to reduce investment risk. In fact, Caterpillar lobbied aggressively in favor of the U.S. ratifying the FTA with Colombia, Panama, and South Korea, recognizing that opportunities do exist in the U.S., but a great amount exists abroad and it requires an understanding between government and businesses to capture a sizeable international market share.
The CEO and President of the U.S. Chamber of Commerce, Tom Donohue recently gave a huge endorsement for U.S. companies tapping into Latin American markets. “We want to double down on trade across the Americas. There’s no better or faster way to create jobs, grow economies, or lift people out of poverty across the region.” Moreover, Mr. Donohue challenged the U.S. government to raise the stakes of the proposed Trans-Pacific Partnership (TPP), asking to include the nations of the Americas, “While we have a strong network of bilateral trade agreements crisscrossing the hemisphere, we need to think bigger... One way to integrate them would be through the Trans-Pacific Partnership... The TPP is mostly dancing to an Asian tune. I think the TPP could use a little salsa, cumbia, or even samba.”
Currently, the members of the proposed TPP includes Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the U.S. The TPP would be the largest free trade area in the world as is, giving the U.S. a great opportunity to align their economic interests with the Asian markets and Latin America. Yet there are glaring omissions that could give the TPP more muscle, such as Mexico, Colombia, Costa Rica, and Panama. If the TPP does decide to get technical with their entry requirements, all the countries mentioned do border the Pacific Ocean as well.
The status quo has been altered radically. Just look at Spain: unemployment is at a staggering 24 percent; the EU fares better, but with unemployment at a worrisome 10 percent. Chile’s economy, on the other hand, is expanding at an average of 6 percent, with a current unemployment rate of 6.6 percent. If we look at migration trends, history suggests that developing countries would generally export their labor; now the opposite is the case, where laborers are eying emerging markets for work opportunities. In 2010, Chile issued 32,400 work visas, and in 2011 it issued 41,000 work visas, an increase of 26 percent. Even Mexico and the U.S. are being affected by this new phenomenon. According to a recent report from The Pew Hispanic Center, the net migration flow from Mexico to the U.S. has stopped and maybe reversed. In 2011, there were more Mexicans deported from than the U.S. than received, meaning the U.S.-Mexico migration pattern in 2011 was basically zero. Time will tell if these migration patterns will hold firm in the next few years.
The Summit highlighted these issues, and many more. Businesses and political leaders convened to discuss past, present, and future economic measures by networking, searching, securing partnerships, and most importantly, opening doors to new business endeavors. International businesses from Canada, Brazil, and Chile attended the Summit with this mission in hand. U.S. companies went to Cartagena with the same objective but instead of encouraging them, it seems more and more are being vilified or politicized by a surging backlash directed towards Wall Street and the principles of free markets.
At the CEO Summit of the Americas, President Obama, sitting next to Rousseff and Santos, emphatically declared "the United States is ready to do business!” He stressed that old arguments of the left and right no longer apply in the current hemispheric environment, arguing: “gun boat diplomacy, the Cold War, that’s not the world we live in today. Controversies that existed before I was born. It seems the news was caught in a time warp.” The same can be said for Americans. If we continue to think our neighbors down south as the engine that couldn’t, the U.S. will fall further behind in economic competitiveness.
Today, China is the largest commercial partner to Brazil, Peru, and Chile. China also ranks second to Colombia and Argentina. In the spirit of healthy competition, the U.S. must do what it can to recover its lost market share. Perhaps the Summit of the Americas did not end with a home-run announcement by the U.S. or its counterparts. That was never the intention. President Obama claimed that since he’s been in office, trade between the U.S. and South America, Central America, and the Caribbean has expanded by 46 percent. Not a bad start if that number holds true. He later stressed that the U.S. cannot be complacent in dealing with the Americas, affirming how vital it is for the U.S. and Latin America to act as partners. “If we are going to compete with Asia and Europe, we've got to up our game.” Thankfully, many U.S. businesses are heeding the president’s advice.
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Opportunity Lost? Looking Back at the Summit of the Americas
May 3, 2012
Latin America cannot catch a break. The Summit of the Americas was supposed to be a coming out party for many Latin American nations. Instead, the U.S. coverage on the Summit focused on the Secret Service prostitution scandal. Indeed an irresponsible act that warrants an internal investigation, but it is unfortunate the scandal overshadowed the outcomes of the Summit. It is not far-fetched for the American audience to assume that nothing else occurred during the Summit, no activities conducted, no advancements made, no progress (whether relative or real) were achieved. In short, it is feasible to conclude the Summit for Americans was an utter waste of time, preserving Latin America’s priority as merely an afterthought in the American mind for many politicians and the American citizenry.
Luckily, it was not a waste of time. Trade and commerce were at the forefront of the Summit’s mission. The U.S. and Latin American nations are realizing that integration, the flow of capital, ideas, and trade are right now the best alternatives towards future growth and stability in the Western Hemisphere.
The business voice was rarely or never heard at prior Summits of the Americas. At Cartagena, that was no longer the case. The Inter-American Development Bank spearheaded a CEO Summit of the Americas, creating space for dialogue between businesses and governments towards facilitating political and commercial cooperative measures throughout the region. Fourteen Presidents and heads of state attended, including President Obama, Brazil’s President Rousseff, Chile’s President Pineda, Mexico’s President Calderon, and Colombia’s President Santos. Also, according to Colombian officials, attendance at the CEO Summit was in such high demand that companies were left out of the limited space, a bullish indication that companies are eager to in expanding their operations across borders.
The Americas as a whole (North America, Central America, the Caribbean & South America) boasts one-third of the world’s GDP - collectively three times bigger than China. The Financial Times published a report revealing that Latin American region’s annual economic output is roughly $5,800 billion. Exclude Argentina, Venezuela and Ecuador, the adjusted outcome still amounts to $4,900 billion, a remarkable figure that is almost three times the amount of India. Undeniably, opportunities exist and U.S. companies are well aware of it. Out of 700 businesses that participated in the summit, 500 of them were foreign-based, and from that pool, approximately 200 of them were U.S.-based.
Maybe the media is not hopping on Latin America’s bandwagon as of yet - which may be a good thing for Latin American nations - but business leaders are certainly cognizant of its potential. According to George Mencio, a partner of Holland & Knight (a U.S. based international law firm) from Washington D.C., U.S. clients have expressed a tremendous amount of interest in Colombia and other Latin America countries. He also noted that the ratification of the FTA, between Colombia and the U.S., has propelled Holland & Knight to position their law firm strategically in order to maximize the increased curiosity in Colombia.
Marriot International’s President and Chief Executive Officer, Arne M. Sorenson, also believes that the FTA is likely to help Colombia's economy grow faster, meaning more opportunities for U.S. and international businesses. Marriot International is projected to double the amounts of hotels operated in Colombia by 2017. When asked which other countries are being targeted for future investments, Mr. Sorensen named a few: Mexico, Costa Rica, Panama, and Chile. What about Argentina? “Argentina is a country with much potential. But right now we’re not ready to invest there because of the political uncertainty” - a sentiment more than likely shared by Spain and Brazil. Mr. Sorensen concluded, “The middle class is growing in Latin America, it is definitely emerging.”
Caterpillar, Inc., a manufacturer of construction and mining equipment, has heavily invested in emerging markets, especially in China. According to William C. Lane, Washington Director of Caterpillar, in addition to China Caterpillar has identified Mexico, Brazil, Peru, and Panama as booming markets for future sales and revenues. “Before, Caterpillar targeted their exports to only rich countries, now they’re (Caterpillar's) top 10 markets are developing countries.”
Caterpillar’s global diversification has shielded the company from the past and present global economic woes, reinforcing the portfolio theory of not putting your eggs in one basket, diversifying markets to reduce investment risk. In fact, Caterpillar lobbied aggressively in favor of the U.S. ratifying the FTA with Colombia, Panama, and South Korea, recognizing that opportunities do exist in the U.S., but a great amount exists abroad and it requires an understanding between government and businesses to capture a sizeable international market share.
The CEO and President of the U.S. Chamber of Commerce, Tom Donohue recently gave a huge endorsement for U.S. companies tapping into Latin American markets. “We want to double down on trade across the Americas. There’s no better or faster way to create jobs, grow economies, or lift people out of poverty across the region.” Moreover, Mr. Donohue challenged the U.S. government to raise the stakes of the proposed Trans-Pacific Partnership (TPP), asking to include the nations of the Americas, “While we have a strong network of bilateral trade agreements crisscrossing the hemisphere, we need to think bigger... One way to integrate them would be through the Trans-Pacific Partnership... The TPP is mostly dancing to an Asian tune. I think the TPP could use a little salsa, cumbia, or even samba.”
Currently, the members of the proposed TPP includes Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the U.S. The TPP would be the largest free trade area in the world as is, giving the U.S. a great opportunity to align their economic interests with the Asian markets and Latin America. Yet there are glaring omissions that could give the TPP more muscle, such as Mexico, Colombia, Costa Rica, and Panama. If the TPP does decide to get technical with their entry requirements, all the countries mentioned do border the Pacific Ocean as well.
The status quo has been altered radically. Just look at Spain: unemployment is at a staggering 24 percent; the EU fares better, but with unemployment at a worrisome 10 percent. Chile’s economy, on the other hand, is expanding at an average of 6 percent, with a current unemployment rate of 6.6 percent. If we look at migration trends, history suggests that developing countries would generally export their labor; now the opposite is the case, where laborers are eying emerging markets for work opportunities. In 2010, Chile issued 32,400 work visas, and in 2011 it issued 41,000 work visas, an increase of 26 percent. Even Mexico and the U.S. are being affected by this new phenomenon. According to a recent report from The Pew Hispanic Center, the net migration flow from Mexico to the U.S. has stopped and maybe reversed. In 2011, there were more Mexicans deported from than the U.S. than received, meaning the U.S.-Mexico migration pattern in 2011 was basically zero. Time will tell if these migration patterns will hold firm in the next few years.
The Summit highlighted these issues, and many more. Businesses and political leaders convened to discuss past, present, and future economic measures by networking, searching, securing partnerships, and most importantly, opening doors to new business endeavors. International businesses from Canada, Brazil, and Chile attended the Summit with this mission in hand. U.S. companies went to Cartagena with the same objective but instead of encouraging them, it seems more and more are being vilified or politicized by a surging backlash directed towards Wall Street and the principles of free markets.
At the CEO Summit of the Americas, President Obama, sitting next to Rousseff and Santos, emphatically declared "the United States is ready to do business!” He stressed that old arguments of the left and right no longer apply in the current hemispheric environment, arguing: “gun boat diplomacy, the Cold War, that’s not the world we live in today. Controversies that existed before I was born. It seems the news was caught in a time warp.” The same can be said for Americans. If we continue to think our neighbors down south as the engine that couldn’t, the U.S. will fall further behind in economic competitiveness.
Today, China is the largest commercial partner to Brazil, Peru, and Chile. China also ranks second to Colombia and Argentina. In the spirit of healthy competition, the U.S. must do what it can to recover its lost market share. Perhaps the Summit of the Americas did not end with a home-run announcement by the U.S. or its counterparts. That was never the intention. President Obama claimed that since he’s been in office, trade between the U.S. and South America, Central America, and the Caribbean has expanded by 46 percent. Not a bad start if that number holds true. He later stressed that the U.S. cannot be complacent in dealing with the Americas, affirming how vital it is for the U.S. and Latin America to act as partners. “If we are going to compete with Asia and Europe, we've got to up our game.” Thankfully, many U.S. businesses are heeding the president’s advice.
