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Embracing the South American Ecommerce Marketplace

south american

Embracing the South American Ecommerce Marketplace

Ecommerce is on the rise in South America. Double-digit growth is expected for 2019 with sales of $71.34 billion (USD), tying it with the Middle East and Africa as the world’s second-fastest-growing retail ecommerce market. 

That’s great news for shippers looking to expand their online retail presence in South America.

A diamond in the rough

Online retailers in South America have been struggling for years to overcome several obstacles to success, including extensive customs delays, poor transportation infrastructure, and the lack of end-to-end supply chain visibility. Progress has been made on all three of these “challenges,” but more work is necessary to ensure the region’s continued double-digit growth. 

Within each challenge lies opportunity

While these obstacles may keep a few shippers from expanding into South America, others are viewing the area as a “diamond in the rough” and working diligently to reap the rewards of this truly untapped region. 

Having the right information is the first step to wading through the muck and mire of this complicated ecommerce marketplace:

South America customs vary by country

Red tape and bureaucracy pose the biggest obstacles for importing products into South American countries. In addition to customs taxes, tariffs, and fees, it can take 30+ days for some goods to be cleared through customs, especially in Brazil and Argentina. As a result, inventory builds up, costs rise, and customers wait longer for their products to arrive. In comparison, however, Chilean customs are very similar to the U.S. and allow products to flow through relatively quickly.

As you can tell, customs procedures can differ significantly, making it difficult for shippers to ensure compliance with each region’s unique customs. For a more seamless process, it’s essential shippers work with a customs broker or third party logistics provider (3PL) with local offices in the area. They’ll know the customs standards and understand the paperwork necessary to ensure products are approved for import.

Free trade agreements 

The United States-Chile trade agreement allows all U.S. exports of consumer and industrial products to enter Chile duty free. While still in the works, the United States-Brazil free trade agreement can help facilitate trade and boost investment between the two countries, especially in infrastructure. The United States-Colombia Trade Promotion Agreement eliminates tariffs on 80% of U.S. consumer and industrial imports into Colombia. 

South America infrastructure at port and inland

South America is hobbled by its inadequate infrastructure, and it’s probably not going to change anytime soon. Roads remain the primary means of transportation, but 60% are unpaved, hampering the speed of delivery by truck to inland locations. Improvements are slowly occurring, thanks to increased government funding (but corruption hampers many efforts). It’s worth mentioning that China, the largest trading partner of Brazil, Chile, and Peru, invests heavily in the region, providing more than $140 billion (USD) in loans for infrastructure improvements in the past decade, according to The Business Year.  

While surface transportation remains stagnant, ocean freight shows promise. According to icontainers.com, routes going to and from South America represent 15% of the total number of trade services.

The largest container port in South America is in the city of Santos in Brazil’s Sao Paulo state. Its location provides easy access to the hinterlands via the Serra do Mar mountain range. More than 40% of Brazil’s containers are handled by the Port of Santos as well as nearly 33% of its trade, and 60 % of Brazil’s GDP, according to JOC.com

In 2018, Brazil’s busiest container cargo port handled 4.3 million TEUs, compared with 3.85 million TEUs in 2017. 

For Argentina, Zarate serves as the critical port for roll-on/roll-off (ro-ro) and breakbulk cargo, while Buenos Aires and Rosario serve as the top container ports. Only two countries in South America are landlocked, Paraguay and Bolivia. 

Shippers and ocean carriers using the Port of Santos have been complaining about congestion and labor disputes at the port, and about politicization and time-consuming bureaucracy. That’s why it’s essential that shippers must have the latest information on traffic through these South American ports. Global freight forwarding companies in the area will have the newest information available to help you choose the right port of entry for your freight.

End-to-end supply chain visibility

Most online retailers and carriers understand that the sale is not complete until the product is delivered to the consumer. If merchandise is damaged during transport or arrives much later than promised, it reflects poorly on both parties and undermines consumer trust in ecommerce purchases. 

Lack of adequate infrastructure has forced many online retailers to put logistics on the back burner, focusing on the user experience through purchase. That’s why many products take weeks to arrive at the customer’s door, setting a bad precedent that must change. 

The South America trucking industry is highly fragmented, with providers ranging from owner-operators (about one-third of the industry) to sizable fleet operators and experienced freight forwarders who may not own any trucks at all, according to Tire Business newspaper. 

Final mile, LTL services paramount in South America

Once your product reaches port in South America and makes it through customs, how it gets delivered to the customer’s door can add extensive costs to your supply chain. Less than truckload (LTL) and final mile services are paramount to successfully operating in the region. Especially those carriers that can provide GPS freight tracking capabilities, such as C.H. Robinson’s Navisphere® technology

Final thoughts

Yes, there are obstacles to operating a supply chain in South American countries. Knowing the ins and outs of each country’s unique customs procedure, understanding which South American ports are best for your freight, and being able to track your shipments end-to-end will ensure your success in the region. Shippers who realize the potential of this “diamond in the rough” marketplace should work with a freight forwarder who will be extra focused and diligent in ensuring their freight moves quickly from customs fiscal warehouses to the final destinations. 

Enlist the aid of a global freight forwarding provider, like C.H. Robinson, who offers a global suite of services and has offices in the region that can help navigate any disruption in your supply chain.

Start the discussion with an expert in South America to accelerate your ecommerce trade. 

trade

Peeling Away Trade Protections for Bananas

Simple in appearance, pleasantly sweet, nutritious, and nearly universal in appeal, that Cavendish bunch of bananas on your counter comes off as pretty unassuming. In reality, it has been through jungle wars and trade wars and now sits on the precipice of extinction. More than half of the bananas traded globally are the Cavendish variety. But with two diseases threatening the world’s largest Cavendish plantations, growing to love more varieties could help save trade in bananas.

Still an Important Cash Crop

Grown in more than 150 countries, bananas are the eighth most important food crop in the world – fourth most important in developing countries. Bananas are among the most traded fruit in the world, generating revenues of more than $8 billion a year for the top banana exporters including Ecuador, the Philippines, Costa Rica, Colombia and Guatemala. However, most are produced for local or national consumption.

For example, the Food and Agriculture Organization estimates that between 70 and 80 percent of bananas in Africa are produced by smallholder farmers. Around 114 million tons are produced globally beyond what isn’t too small to be counted, yet only 19 million tons were shipped globally. That said, for the top five exporters, bananas are a major contributor to the total value of their agricultural exports. India and China are among the biggest producers but their output mainly serves the large domestic markets.

global bananas trade

Peeling Away Trade Protections

The Banana Wars, centered on the European Union’s (EU) banana trade regime, spanned 20 years as the longest running series of disputes in the multilateral trading system to date (although the Boeing-Airbus dispute may be on track to take that title). As one of the most significant episodes in trade law, the Banana Wars are deserving of more attention, but here are some abridged highlights.

Europe’s banana regime began as an umbrella for complex arrangements at the individual EU Member State level that were designed to offer exclusive or preferential access to former colonies in Africa, Caribbean and the Pacific (ACP), and at the same time shield EU producers from competition.

Under the EU’s original regime, ACP countries received a zero-tariff rate while imports from other countries were taxed at 20 percent. However, each Member State was allowed to “derogate” and maintain special protective provisions for imports from their overseas departments. For example, France set aside two-thirds of its market for Guadeloupe and Martinique and the remaining third for the ACP Franc Zone states of Cameroon and Cote d’Ivoire. The Spanish market was reserved for shipments from the Canary Islands. Greece banned imports to protect its own production in Crete. Only Germany opened to free trade.

The Single European Act of 1986 mandated an integrated EU market by January 1993, which required that Member States consolidate their programs into a common regime for bananas. As devised, this version still enabled members to discriminate among imports by source, offering better terms to their overseas departments and to imports from ACP countries. Colombia, Costa Rica, Guatemala, Nicaragua and Venezuela (supported by the United States) challenged the regime as inconsistent with the EU’s obligations under the GATT.

The EU’s ability to offer tariff preferences was upheld because it had a waiver in the GATT for its general tariff preference program; but the GATT Panel found the EU’s discrimination through tariff quotas to be inconsistent with its obligations. However, prior to the WTO, a GATT member could simply veto the outcome of a panel decision, enabling the EU effectively to ignore the GATT Panel ruling.
EU banana imports

Second Banana

The EU revised its banana regime in 1993 to include new special distribution licenses under a general quota. Licenses were divvied up among primary importers and importers performing secondary activities such as customs clearance, warehousing and storage; licenses were dependent on historical performance, subject to country allocations, market share and other criteria. After yet another challenge by the five Latin American countries, a GATT Panel found in 1994 that the EU’s licensing system was excessively restrictive and not covered by its waiver.

After 1995, with the WTO’s enforceable dispute settlement system in place and additional obligations to avoid discrimination in trade in services, the EU recognized it would face more challenges to its regime. The large multinational producers involved in shipping, warehousing, ripening, marketing and distribution had an even stronger case to make. The EU negotiated with all of the disgruntled Latin American producers but Guatemala to head off the legal challenge. Having offered additional or expanded quotas, they temporarily pleased some countries but further worsened the discriminatory effect for those countries not a part of the negotiation.

A third complaint against the EU’s banana regime was reviewed in the WTO in 1996, this time with the United States as the lead plaintiff in response to complaints from Chiquita and the Hawaiian Banana Association. A WTO decision in 1997 again concluded that, although the EU’s discriminatory tariffs were covered under its historical waiver, its tariff quota allocations and convoluted import licensing administration violated its WTO obligations. The EU’s next version of its banana regime did little to remedy the discriminatory elements, which led to the imposition of tariffs by the United States and Ecuador in response to the EU’s failure to comply with the WTO ruling. By 2001, the EU made another attempt to transition its system, but not until 2006 would the EU decide to phase in a tariff-only system, dispensing with quotas.

Banana Splits

At the end of 2009, after negotiations with non-ACP producers, the EU agreed to reduce the tariff rate it applies to all WTO members. Tariffs would come down from 176 euros per ton to 114 euros per ton by January 2017 (stipulating it could revert to higher rates if exporting countries exceed a “trigger” amount of imports). It wouldn’t be until 2012, that the EU and 10 Latin American countries finalized signed an agreement in the WTO to codify the revised EU banana tariff schedule (“The Geneva Banana Agreement”), officially closing the longstanding legal disputes.

As a prologue, the EU signed trade agreements with Andean and Central American countries in 2013 and Ecuador in 2017. Ecuador has seen a large bump in global export volume as its agreement with the EU is implemented. By next year, the tariff on bananas from Ecuador to the EU will go down to 75 euros per ton with no quota on the amount eligible for this rate. As the EU continues to edge toward “freer” trade in bananas, the ACP producers will face considerable adjustment.

2009 Geneva Banana Agreement

Going Bananas

Having survived the banana trade wars, the popular Cavendish banana faces a new challenge, one that could actually wipe them out.

“Panama disease TR4” has ravaged thousands of acres of Cavendish plantations throughout Southeast Asia and Australia and is spreading to Africa and the Middle East. It can lie dormant in soil for decades and has proven resistant to fungicides and fumigants. It is only a matter of time before TR4 takes hold in Latin America, which supplies nearly the entire U.S. market. Banana plantations in the Caribbean are threatened by another disease called Black Sigatoka, which has been reducing banana yields by 40 percent every year in affected areas.

Before Cavendish was top banana, a banana called the Gros Michel (Big Mike) dominated the banana trade in the early 1900s until the fungus TR1 took it to the brink of extinction in the mid-1950s. At that time, the Cavendish variety from China was discovered to be resistant to TR1 so it replaced Mike. But bananas don’t have seeds. They breed asexually so they cannot recombine their genes to ward off threats. In other words, the Cavendish is ripe for attack because it cannot evolve – every generation is a clone of the previous.

Try Hanging with a New Bunch

If scientists don’t make a breakthrough, TR4 and TR1 could spell the end for the beloved Cavendish. With over 1,000 different varieties of bananas growing around the world, why not get to know some others that might grow more popular through trade – here are a few to get you started.

For your next dessert, try using Niño, Manzano (“apple bananas”) that have a hint of apple and strawberry flavor, or Goldfinger, a newer variety from Honduras. Intriguingly, there’s also Blue Java, named for its blue skin, which has a creamy, ice cream-like texture and purportedly offers a subtle vanilla flavor.

Cooking bananas include the Macho plantain and other fun-sounding varieties like the Burro which has squared sides and a lemon flavor when ripe, and the Rhino Horn from Africa, which can grow up to two feet long. If consumers demand it, perhaps global trade in bananas will finally branch out.

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Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.

 

LATAM

Delta-LATAM Airlines Partnership Increases Connectivity and Options for Customers

Delta and LATAM Airlines confirmed a strategic partnership this week, ultimately combining strengths and bringing an increase in overall connectivity between in North America and Latin America. This partnership represents added opportunities within the existing partnerships such as extending networks and each company’s global presence. By adding value and optionality to their Americas customer base, both Delta and LATAM are enabled to increase customer destinations while combining strategies for top-notch passenger service.

“This transformative partnership with LATAM will bring together our leading global brands, enabling us to provide the very best service and reliability for travelers to, from and throughout the Americas,” said Ed Bastian, Delta’s chief executive officer. “Our people, customers, owners and communities will all benefit from this exciting platform for future growth.”

Beyond the customer impact the partnership creates, opportunities for investment and savings will also play a key role in offering support, free cash flow, forecasted debt reduction, aircraft acquisitions and more. Delta confirmed a $350 million establishment investment in addition to a $1.9 billion investment for a 20 percent stake in LATAM through a public tender offer at $16 per share.

“This alliance with Delta strengthens our company and enhances our leadership in Latin America by providing the best connectivity through our highly complementary route networks,” said Enrique Cueto Plaza, chief executive officer of LATAM. “We look forward to working alongside one of the world’s best airlines to enhance the travel experience for our passengers.”

To learn more about this strategic partnership, please visit ir.delta.com OR www.latamairlinesgroup.net/investor-overview for webcasts recapping partnership details. 

Source: Delta Airlines

rose

WHEN A ROSE ISN’T JUST A ROSE: HOW TRADE POLICY WAS USED TO FIGHT DRUGS FROM COLOMBIA

A Grand Gesture

As evidence that Valentine’s Day is here, roses are everywhere – grocery and drug stores, gas stations, and sidewalk vendors offering a bunch for the last-minute Romeo. Until the late 1980s, most roses sold in the United States came from California. A dozen roses would have set you back around $150, which is why the tradition was a grand gesture and a symbol of the seriousness of your relationship. Not really so much today – a dozen roses can be purchased for less than $20.

Why are roses so affordable? The explanation is years of U.S. Government trade, development, and drug eradication policies designed to move South American growers away from cultivating the coca plant used to make cocaine, by substituting commercially profitable production of cut flowers.

Flower Power

Americans will give each other 200 million roses over the Valentine season. The majority were grown in Colombia. Over the course of a year, Colombia exports around 4 billion roses to the United States and supplies 60 percent of U.S. imports of fresh cut flowers overall. Production and shipping are so efficient and cost-effective that roses from Colombia can reach the U.S. East Coast ahead of a similar shipment from California.

The competition from South American suppliers, particularly Colombia, has caused California production to plummet by 95 percent since 1991. The year 1991 is significant. It was the year Congress passed the Andean Trade Preference Act (ATPA, later expanded and renamed the Andean Trade Promotion and Drug Eradication Act).

ATPA represented a tool in the U.S. policy toolkit to disrupt the drug trade and cartels in Bolivia, Colombia, Ecuador and Peru, and slow the flow of drugs into the United States. Reducing or eliminating tariffs on imports from the region was intended to incentivize farmers to replace illicit coca production with legitimate (and safer) alternatives.

Thorny Issues

The reduction in tariffs gave Colombian growers a boost, but the seeds to grow the Latin American rose industry were really planted back in the 1960s under President Kennedy through economic development programs implemented by the U.S. Agency for International Development (USAID) to combat the spread of Communism in Latin America. Over decades, U.S. funding supported the infrastructure critical to developing an industry that could offer employment, education and empowerment to hundreds of thousands – predominantly female – workers.

The program’s successes came at the expense of U.S. growers. The U.S. florist industry petitioned for a series of anti-dumping investigations that resulted in negligible penalties on importers, and little tangible relief for U.S. industry. As imports grew, the number of U.S. rose farms dwindled from several hundred to fewer than 20 large-scale rose producers today.

Not Everything is Coming Up Roses

The savanna near Bogotá, Colombia’s capital city, is ideal for flower cultivation. It sits 8,700 feet above sea level about 320 miles north of the equator and possess clay-rich soil. Since the 2016 peace accords between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC) rebels, many of the coca farms in this area have been replaced with flower production.

But Colombia’s blessings are also a curse. FARC offshoots and other guerrilla groups have been able to move coca production from central highlands to the country’s coastal deltas and frontier areas where it is thriving.

Aerial fumigation to wipe out coca plots was discontinued due to concerns about the effects on human health and damage to local soil and water systems. As well, crop substitution programs have lapsed, leaving a lack of economic alternatives for poor communities where cocaine traffickers have moved in ( though the government has announced plans to replace around 50,000 hectares of illegal crops with the growing of cacao and fruit trees).

As a result, coca production is on the rise. With somewhere between 150,000 and 180,000 hectares of coca under cultivation, according to United Nations and U.S. estimates, Colombia produced its largest crop of coca in 2016 in nearly two decades.

A Rose by Any Other Name

Trade preference programs played some role in helping to provide a safer livelihood for hundreds of thousands of South Americans while making roses accessible to most everyone and for all occasions. Walmart buys so many roses that its purchases are actively monitored by the industry as an economic indicator.

Back in California, the remaining growers still produce around 30 million roses each year. Rather than cultivate mass-produced roses (the red, long stemmed, no scent, durable variety), these growers are working with universities and research centers to create new and specialty cut rose varieties to serve niche segments of the markets such as weddings and other high-end celebrations.

More reading: Archived reports by the Office of the U.S. Trade Representative on the operation and impact of the Andean Trade Preferences Act can be accessed here.

Sarah Smiley

Sarah Smiley is a strategic communications and policy expert with over 20 years in international trade and government affairs, working in the U.S. Government, private sector and international organizations.

This article originally appeared on TradeVistas.org. Republished with permission.

Animal Fats and Oils Market in Latin America and the Caribbean – Key Insights

IndexBox has just published a new report: ‘Latin America and the Caribbean – Animal Fats And Oils – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the animal fats market in Latin America and the Caribbean amounted to $770M in 2018, lowering by -7.8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Over the period under review, animal fats consumption continues to indicate a deep reduction. The most prominent rate of growth was recorded in 2016, with an increase of 4.2% against the previous year. The level of animal fats consumption peaked at $1.2B in 2014; however, from 2015 to 2018, consumption remained at a lower figure.

Production in Latin America and the Caribbean

In 2018, approx. 206K tonnes of animal fats and oils were produced in Latin America and the Caribbean; falling by -2.6% against the previous year.

Exports in Latin America and the Caribbean

The exports amounted to 8.9K tonnes in 2018, rising by 49% against the previous year. The total exports indicated a remarkable increase from 2014 to 2018: its volume increased at an average annual rate of +13.9% over the last four years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the animal fats exports increased by +85.0% against 2016 indices.

In value terms, animal fats exports totaled $45M (IndexBox estimates) in 2018.

Exports by Country

The exports of the three major exporters of animal fats and oils, namely Chile, Peru and El Salvador, represented more than half of total export. Colombia (1K tonnes) ranks next in terms of the total exports with a 12% share, followed by Argentina (11%), Brazil (6.8%) and Honduras (6.2%).

From 2014 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Peru (+343.2% per year), while the other leaders experienced more modest paces of growth.

In value terms, Chile ($28M) remains the largest animal fats supplier in Latin America and the Caribbean, comprising 63% of total animal fats exports. The second position in the ranking was occupied by Colombia ($9.1M), with a 20% share of total exports. It was followed by Peru, with a 8.9% share.

Export Prices by Country

The animal fats export price in Latin America and the Caribbean stood at $5,093 per tonne in 2018, approximately mirroring the previous year. Over the period under review, the animal fats export price, however, continues to indicate a deep downturn.

Export prices varied noticeably by the country of origin; the country with the highest export price was Chile ($13,793 per tonne), while Honduras ($433 per tonne) was amongst the lowest.

From 2014 to 2018, the most notable rate of growth in terms of export prices was attained by Chile, while the other leaders experienced mixed trends in the export price figures.

Imports in Latin America and the Caribbean

In 2018, approx. 4K tonnes of animal fats and oils were imported in Latin America and the Caribbean; surging by 14% against the previous year. The total imports indicated a strong increase from 2014 to 2018: its volume increased at an average annual rate of +11.0% over the last four year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the animal fats imports increased by +51.8% against 2014 indices.

In value terms, animal fats imports amounted to $6.2M (IndexBox estimates) in 2018.

Imports by Country

Guatemala (1.5K tonnes) and Chile (1.4K tonnes) dominates animal fats imports structure, together generating 72% of total imports. El Salvador (342 tonnes) ranks next in terms of the total imports with a 8.5% share, followed by Mexico (6.3%). Belize (153 tonnes), Colombia (87 tonnes) and Guyana (65 tonnes) occupied a little share of total imports.

From 2014 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Belize (+91.2% per year), while the other leaders experienced more modest paces of growth.

In value terms, Chile ($2M), Guatemala ($1.3M) and Mexico ($580K) were the countries with the highest levels of imports in 2018, together accounting for 63% of total imports. El Salvador, Colombia, Belize and Guyana lagged somewhat behind, together comprising a further 13%.

Import Prices by Country

The animal fats import price in Latin America and the Caribbean stood at $1,539 per tonne in 2018, lowering by -2.1% against the previous year. In general, the animal fats import price continues to indicate a relatively flat trend pattern.

Import prices varied noticeably by the country of destination; the country with the highest import price was Colombia ($3,221 per tonne), while El Salvador ($872 per tonne) was amongst the lowest.

From 2014 to 2018, the most notable rate of growth in terms of import prices was attained by Mexico, while the other leaders experienced mixed trends in the import price figures.

Source: IndexBox AI Platform

Asian Investment in Latin America: What you Should Know

As China and Latin America continue making news headlines with high-profile summits and ever-growing investment relations, critical factors driving investment movements take shape, paving the way for successful initiatives between the two countries and ultimately creating an increase in overall diversification of investment in sectors from transportation infrastructure to natural resources, and technology. Relations between Latin America and China continue to strengthen, and we see the relative involvement of the United States slowly tapering off as its commitment to free trade and traditional investment promotion vehicles such as the Export-Import Bank of the United States are in question. So, what exactly does this mean for Latin America and how is the U.S. affected? Gaston Fernandez, partner at Hogan Lovells, weighs in on the subject.

“The numbers in terms of Chinese investment in the U.S. show that such investment has fallen off significantly. The enactment of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) has placed more scrutiny on foreign investment, and I think there is a perception that national security review has been expanded to something on a broader scope, perhaps more than it was in the past. One example from the headlines would be the U.S. imposing steel and aluminum tariffs on the E.U., Canada and Mexico for national security reasons. I think it’s hard to pin down the motivations for the decline in Chinese investment in the U.S. but there has certainly been a decline, and as a result we’re seeing the same amount of overall Chinese outbound investment going to other regions in the world such as Europe, Latin America, and other developing countries.”

This poses the question of how Mexico will be involved. NAFTA may soon be a thing of the past upon ratification of its replacement, the USMCA, but uncertainty remains in the minds of global trade leaders and investors alike. In this new environment, diversification of investment sources might very well be the key to success if the government wants to see its vision of development projects come to fruition, such as railways extending from the Pacific to the Caribbean and expansion of electricity transmission infrastructure. It’s not a question of opportunity as much as it is a question of lessons learned from recent history in the region, claims Fernandez.

“For many years in Mexico there was a natural tendency to focus on development through NAFTA because it was in many ways taken for granted as the simplest and most effective option for promotion of foreign direct investment. Considering the recent rise of foreign investment from other sources throughout Latin America, there may be some value in diversifying and trying to attract more investment from other countries.”

Diversification presents opportunities when the right investors are involved. Smart selection of projects and partners will determine success in Mexico as plans move from policy goals to implementation.

“In the last 20-30 years, China has built an incredible amount of infrastructure in terms of rail, electricity transmission, and highways, so they have the recent experience and in general China tends to subsidize project costs through loans that are below market rates to promote exports. That combination of attributes has made China an attractive partner for countries throughout Latin America, and I think that could appeal to Mexico as well,” added Fernandez.

The most critical element of global diversification will ultimately lead to a greater economic impact. As more countries are involved with each other to collaborate on economic development, the sources of investment become more diverse. Not all countries are open for investment in the current political environment, and that provides more opportunities for developing countries to tap into the open market to capture the overflow of investment which may have originally ended up elsewhere. Many countries in Latin America are currently looking promising.

“I think now we’re seeing a wider range of Chinese commercial banks and project owners willing to invest their equity, as well as Chinese insurance companies looking to invest insurance assets and Chinese tech startups that are now expanding their offerings of products into Latin America. There’s going to be increased diversification of where the money is coming from, which is good. Going forward, investment will be reaching more sectors of the economy than just the traditional perception of Chinese investments being principally related to natural resources and transportation infrastructure. We’re starting to see investments across a more diverse range of industries, and I think that’s going to be a good thing for Latin America,” Fernandez concluded.

Gaston P. Fernandez is a partner at Hogan Lovells.  He often represents Latin American national governments and companies and has worked on matters involving Asian investment throughout Latin America in the petrochemical, power generation, transportation, and mining industries. He has been involved with the negotiation and successful closing of credit facilities for Latin American national governments and companies from U.S., European, and Asian banks, including China Development Bank, The Export-Import Bank of China, Bank of China, Industrial and Commercial Bank of China (ICBC), The Japan Bank for International Cooperation (JBIC), and The Export-Import Bank of Korea.

Apparel Textile Sourcing Miami Unveils Top Speaker Line-Up

Amidst Changing Global Trade Landscape, Apparel Textile Sourcing Miami Show Unveils Top Speaker Line-Up to Boost International Trade Success for Fashion Industry Players in Florida, Southern U.S. and Latin America.

The show gets underway May 28-30 at the Mana Wynwood Conference Center, coinciding with Miami Fashion Week to bring to the Magic City more than 10,000 fashion industry representatives for a first-hand discovery of new developments and insights in the apparel and textile market — from concept to consumer.

“With the U.S. in the midst of a shifting trade environment, ATSM has put together the most comprehensive sourcing seminars, expert panels and Q&A segments to arm representatives across all segments of the industry — brands, retailers, e-commerce sellers, designers, importers and buying offices — with the knowledge, tools and practical solutions they need to address current industry issues and navigate through the rapidly-transforming sourcing ecosystem,” said Jason Prescott, CEO of JP Communications, producer of the show and publisher of North America’s leading of B2B trade platforms TopTenWholesale.com and Manufacturer.com.

Highlights of the ATSM educational sessions — which take place on the show floor alongside 300 exhibits of the latest in apparel and textile products and services from more than 15 countries — include:

U.S. Trade Policy Update

U.S. trade policy is changing quickly and Julie Hughes, President of the DC-based United States Fashion Industry Association (USFIA) — which works to facilitate global trade for U.S.-based brands, retailers, importers and wholesalers doing business internationally — will provide an update on the latest developments in global trade, tariff and non-tariff barriers, and new sourcing opportunities.

Imports, Exports and Customs: All You Need to Know for 2019 and Beyond

Navigating through the complex supply chain and other complicated issues associated with trade present a challenge for businesses, small and large. Learn from international trade and legal expert Laura Siegel Rabinowitz, Special Counsel of national law firm Kelley Drye & Warren LLP, about all you need to know to ensure compliance with current trade laws and policies surrounding imports, exports and customs, and reduce duty exposure.

New Investment Opportunities

Tap into an unprecedented number of investment opportunities available to Florida apparel brands, retailers and businesses — from local to international sources. Speakers include Manuel A. Mencia, Sr. Vice President – International Trade and Development of Enterprise Florida, as well as representatives from The Investment Association of China (IAC), who will provide details as part of the first Asia-US-Latin America Investment Summit on the group’s vision to invest in local opportunities in Miami and Fort Lauderdale in the areas of logistics, ports, commercial/residential real estate, infrastructure and technology. IAC, the authority of the Chinese investment industry, regulated by the National Development and Reform Commission of the Peoples’ Republic of China, has injected billions of dollars into different economies worldwide across numerous industries since the inception of China’s One Belt, One Road global trade initiative.

What’s Next in Fashion Color Trends

Laurie Pressman, Vice President of the Pantone Color Institute, will unveil global color authority Pantone Color Institute’s fashion color trend forecast for Autumn/Winter 2020-2021. Be among the first to see how next year’s colors and beyond will be reflective of color as an oasis and how they will be incorporated into fashion.

Stream for Designers on Growing a Successful Business

Launching and growing a successful business today is a challenge for both expert and novice designers alike, especially with limited budgets. What’s the best way to launch or scale a brand — online, direct to consumer, crowd sourcing sites or wholesale? Mercedes R. Gonzalez, Founder and Director of Manhattan-based Global Purchasing Companies, specialists in fashion strategy and brand development, will reveal valuable tips on everything designers needs to know about breaking through the clutter and launching a successful collection. Design industry expert Anna Livermore, Founder of Chicago-based V. Mora, who has helped launch hundreds of designers’ careers over the last decade, will share top mistakes designers make and how to avoid them.

Latest Developments in Manufacturing Technology

With technology evolving at a rapid pace, discover the many advances in technology use and how it can speed up product development and the manufacturing process, including pattern design, creating technical packs, 3D scanning, grading, marking and cutting. Learn from experts such as Ram Sareen Head Coach and Founder of California-based fashion tech firm Tukatech on how technology can help your company save time and money in meeting manufacturing demands, and Shahrooz Kohan, CEO of California-based fashion ERP software provider AIMS360 on the benefits of integrating apparel value chain technologies into your business.

Sustainable Fashion: How to Adapt Your Business to Conform 

In the wake of the United Nations’ launch of the “UN Alliance on Sustainable Fashion,” a panel of top industry experts will discuss the implications for apparel businesses, and provide guidance on how companies can launch, convert and grow their sustainable operations.

Responsible Sourcing and Your Bottom Line

Avedis Seferian, President and CEO of Worldwide Responsible Accredited Production (WRAP), will examine why responsible sourcing is more important than ever in today’s world of instant communication, what companies need to do in order to ensure business continuity and stay competitive, and how responsible sourcing impacts the bottom line.

Presented free of charge, the interactive educational sessions are expected to draw more than 4,000 local, national and international visitors who will attend ATSM to learn, source new innovations, and make connections with sourcing partners globally.

In addition to the show’s exhibits and conference sessions, ATSM will deliver a world-class fashion show, representing local and international designers, up-and-coming student talent and global fashions presented by show exhibitors.

For more show details and a complete conference schedule, please visit www.appareltextilesourcing.com.

BRICs Meet in Brazil, Create Bloc Development Bank

Los Angeles, CA – Leaders of the BRICS group of emerging powers – Brazil, Russia, India, China and South Africa – have decided to create their own development bank as a counterweight to what they perceive are “western-dominated” financial organizations like the US-based World Bank and International Monetary Fund.

The move came during the BRICS Summit earlier this week in Fortaleza, Brazil. The summit comes as the five countries, whose economies together represent 18 percent of the world total, are experiencing sharp slowdowns in their once fast-paced rates of growth.

The new development bank will reportedly be based in Shanghai and is expected to be functional within two years. It will be capitalized at $50 billion, a figure that could grow to $100 billion to fund infrastructure projects. The fund would also have $100 billion at its disposal to weather economic hard times.

The new development bank’s first director will reportedly be from India.

“We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness,” the group said in a joint press release.

The BRICs leaders are now in the Brazilian capital of Brasilia, meeting with their counterparts from Argentina, Chile, Colombia, Ecuador, Venezuela and several other Latin American nations to discuss future economic and trade cooperation.

BRIC giant China is particularly interested in Latin America. After this week’s discussions, Chinese President Xi Jinping will stay in Brazil to launch a China-Latin America forum with the leaders of several regional countries including Cuba, Argentina, Ecuador, and Venezuela.

China is growing in influence in the region. Last year, the country, two-way trade with the region amounted to more than $261 billion.

07/17/2014

US-Sourced LPG Shipments to Latin America Surge

 

Washington, DC – US shipments of liquefied petroleum gas (LPG) to Latin America have increased five-fold since 2007, edging out more expensive exports from countries such as Saudi Arabia and Algeria.

According to data released by the Energy Information Administration (EIA), Latin America imported about 206,000 barrels per day (bpd) of US-sourced LPG in 2013, up from 38,000 bpd in 2007.

The agency said that the lack of industrial capacity and stagnant natural gas production in Latin America – particularly Venezuela – means there is too little LPG to satisfy voracious demand, while the shale boom in the US has created a growing surplus of LPG, namely propane, butane and isobutane.

US producers are reportedly offering lower prices than other major exporters with buyers in Brazil and Chile signing supply contracts with a number of US providers.

LPG is produced from the natural gas liquids that are processed at fractioning plants to separate methane from other more-valued gases, such as butane and propane.

Total US LPG exports rose 482 percent since 2007 to 332,000 bpd last year. Analysts forecast some 450,000 bpd in exports this year and 800,000 bpd by 2018.

Venezuela, which once exported LPG to neighbors but has suffered production declines, has been importing since 2012 while Ecuador imported 88 percent of its LPG last year, spending $700 million in subsidies, the EIA said.

06/10/2014