Latin America has seen a drastic departure from business as usual. Many countries are dealing with monumental policy shifts that alter how their economies function, which of course have ripple effects on surrounding countries. Larger societal issues, such as immigration, can also have significant effects on the fundamentals of national economies.
With more than 325 World Trade Centers (WTCs) in 90+ countries around the world — and more than 40 in Latin America alone — understanding commercial trends in this region will help investors and business professionals stay ahead of the curve globally. Here are four prevailing trends to keep in mind.
1. Fewer U.S. partnerships but intensification of oil and green energy development
Relations between Latin American countries and the U.S. have been upended as of late. Several factors such as U.S. tax reform, and changes in trade policy — including the dissolution of the North American Free Trade Agreement and the emergence of the United States-Mexico-Canada trade agreement — have led to fewer U.S. mergers and acquisitions in the region. As a result, new players such as China have supplanted America as a go-to partner for land, energy and development ventures.
One exception: large oil companies are exploring drilling in the less-constricted oilfields of Argentina, Brazil, and Mexico. Additionally, at the same time, much of Latin America is turning toward clean energy sources as oil prices surge, and severe air pollution plagues many urban areas. One harbinger of things to come includes the work being done in major economies like Brazil and Chile to develop wind, solar, and geothermal energy sources and applications. Other investments like those being made in hydroelectric power in Paraguay also point to the growing importance of sustainability in the region, and the seriousness of countries to develop this capacity.
2. More investment in education and startup culture
Latin American countries are working diligently to increase enrollment in K-12 schools and higher education. Although they face many obstacles, such as students living in rural areas and the technology gap, the statistics are ripe for change. To help address these challenges, local and international companies are busy developing education software for the Latin American market.
In Brazil, for example, private-university enrollment has more than doubled since 2005. In January 2018, 4.76 million students were enrolled in private universities in Brazil, which amounted to 72.7 percent throughout the country. Better educational offerings like these will provide Latin American workers much-needed skills to catapult into higher-wage jobs, and to help the region realize its upward potential.
Finally, high-tech jobs are so desirable that many countries have been actively sponsoring startup ventures and environments. In fact, Chile is home to “Chilecon Valley,” with entrepreneurs from 79 countries. Panama City, Panama, now considered the most expensive city in Latin America, has also welcomed investors and innovators from around the world.
3. An increase in manufacturing partnerships
Companies in countries throughout Latin America are also getting serious about working together to produce goods. Historically, this has not always been the case. New intergovernmental agreements, however, are helping to lower transaction costs and increase manufacturing opportunities, which helps encourage cross-border cooperation.
Specifically, in 2018 the Pacific Trade Alliance — which is made up of Chile, Colombia, Mexico, and Peru — started planning for a free trade agreement with Mercosur, the South American trade block of Argentina, Brazil, Paraguay, and Uruguay. Together these regional blocks have a combined population of nearly half a billion people, and represent 90 percent of Latin American GDP.
In other indications of global engagement, Colombia joined Chile and Mexico in the Paris-based Organization for Economic Cooperation and Development (OECD). The OECD promotes policies that allow intergovernmental cooperation. It is estimated that blending the 33 existing trade agreements in Latin America and the Caribbean could add $11 billion in annual trade flows.
4. Marketing to a new middle class
Businesses throughout the region are changing their marketing strategies to sell goods and services to a growing middle class. As they do so, they are working hand-in-hand with national governments to moderate inflation and prevent negative implications of trade negotiations.
Due to some recent developments and stumbling blocks, it is unclear how quickly this trend will take hold across the region. However, even given the challenges, it is clear that the growing power of consumers in the region will force both local and international companies to refocus how they market and sell, which is itself an indication of changes on the horizon.
Many of these business trends for Latin America are interlinked and dependent upon each individual country. As the region manages through various civil conflicts and economic crises, these countries will become better equipped to grow collectively and support one another. Opportunity is knocking in the region not only for businesses, but for the collective gain of the individual countries involved.
Exports sent from Arkansas to Mexico have grown over 700 percent since the North American Free Trade Agreement (NAFTA) was enacted in 1994. Of those, agricultural exports have grown over 911 percent during the same period. To accomplish milestones such as these, trade delegations are necessary as they search for unique opportunities for companies to discuss trade and do business in key countries. The World Trade Centers Association (WTCA) provides these types of opportunities by hosting an ideal environment for businesses to participate in a trade mission. The recent WTCA General Assembly (GA) was the perfect opportunity for our delegates to do business in Mexico as there are close ties between Arkansas and Querétaro, such as the Arkansas State University Querétaro Campus.
When our first delegate arrived in Querétaro on Sunday, April 7th, I was filled with excitement, which lasted all throughout the week at this year’s GA. It was a gratifying feeling, resulting from months of logistics, communication strategies, and hard work that started back in December 2018.
Our initiative to bring a large delegation to this year’s GA started with our team emailing over 68,000 Arkansas-based companies, organizations, and media, inviting them to in-person meetings to explain the trade mission opportunities available at the event. Our goal was to connect these companies with international organizations that would develop into business agreements and connections. In December, alongside Carlos Uribe, the Chief Operating Officer at World Trade Center Querétaro, we went on a two-day roadshow through three different cities to meet with various companies who responded to our request, covering most of Arkansas. Accompanying us in this journey were the Consul General of Mexico, Rodolfo Quilantan Arenas; two student interns from the University of Arkansas; our Trade Support Assistant, Matthew Guzak; and our Director of Grants and Finance, Trish Watkins. As a result of our efforts, we brought the largest delegation to the GA with a total of 29 attendees and staff, and two speakers, and hosted a booth with multiple spaces for Arkansas companies to showcase their products and services at the Centro de Congresos of Querétaro.
On the first day of the GA, our Arkansas companies met with the Querétaro Secretary of Sustainable Development, the Secretary of Agricultural Development, the International Relations Coordinator, and the Director of Agriculture and Sustainable Development over breakfast. We then visited Safran Landing Systems and the Arkansas State University Querétaro Campus (ASU Querétaro) where we had a networking session with government officials from the municipality of Colon and various business-to-business (B2B) meetings with local companies. While the meetings were taking place, Dr. Nonis from ASU Jonesboro, who was part of our delegation, gave a lecture to students at the ASU Querétaro Campus. An additional intern from a university in Querétaro, Gerardo Coronado quickly became an integral member of our delegation by helping to coordinate and facilitate before and during our visit.
The next day, our companies attended the Trade Show and networked with other businesses and World Trade Centers from around the world during the event. We also had a couple of speakers participate in panel discussions including Co-Founder of Farmers for Free Trade, Angela Marshall Hofmann (who also happens to be a World Trade Center Arkansas Board Member); and Executive Director of the Arkansas Aerospace and Defense Alliance, Chad Causey. Coinciding with the panel discussions, we had different groups of delegates that held business meetings at Agra Park in Querétaro, and still others who held meetings at local businesses throughout Querétaro.
On the final day of the GA, we met with the Secretary of Agriculture and the President of Coparmex Querétaro — an organization that brings local businesses together and represents them at a governmental level — inviting them to bring along a delegation of farmers and businesses from Querétaro to visit Arkansas. By the end of the GA, our companies had met with dozens of local and international organizations, businesses, and government officials. Some of our companies were able to secure agreements with Mexican companies while others built strong connections with potential customers and distributors. We were able to achieve and even exceed our initial goal by learning about the local culture, interacting with people from around the world, and making new friends and connections. Additionally, the mix of delegates including Arkansas-based companies from different industries, professors, student interns, expert speakers, and even non-profit organizations, provided for a well-balanced and highly diverse group, making this the second largest trade delegation in the history of the World Trade Center Arkansas.
The GA now offers these terrific opportunities for Member World Trade Centers to invite trade delegations to this diverse networking event. But it takes a great deal of work and detailed planning to make them a success. Here are a few things to keep in mind as Members look to organize their own trade missions for next year’s meeting in Taipei, or for other opportunities outside of WTCA events:
About World Trade Center Arkansas
The mission of the World Trade Center Arkansas is to grow trade and increase Arkansas exports by connecting Arkansas businesses to the world through international trade services. The Center is part of the University of Arkansas and serves as the official trade promotion arm for the Arkansas Economic Development Commission (AEDC).
For more information about our organization, please follow the World Trade Center Arkansas on Facebook and Twitter, or subscribe to the World Trade Center Arkansas newsletter.
It is a well-known adage in business that an organization’s touchpoints must all reinforce the core values of that brand. That is especially true for the World Trade Centers Association (WTCA).
When we talk about all of the important work of the WTCA, I do not have to tell our Members that it is not what Headquarters is doing that makes us great, it is what our Members are doing on the ground. The work that WTCs undertake to encourage and attract investment to their home towns, or to help local SMEs find new markets, or to put on small-to-global trade conferences make us an indispensable resource to the local economic ecosystems of WTCA cities around the world. What may be a bit less well-known is that as it turns out, our Members are also our greatest salespersons.
The strength of our network depends heavily on the quality of the Members we admit. As every license holder knows, there is a robust process in place to ensure that we are admitting new Members in diverse cities that will add something to our global family. Without the appropriate and well-conceived project plans, local government and community support, and demonstration of the financial strength to see out the ambitious plans applicants submit to our Executive Committee, it is difficult to become a Member. That is why the best people to recognize strong, potential new members are those who are already a part of the WTCA. And the promise of a stronger network is not the only motivation we offer to help contribute to our growth.
For many years we have had a system of referral incentives in place to recognize the hard work and efforts of those Members who actively work to expand and grow our Association. For the first two successful referrals and Member makes—meaning those who work their way through the application process and are approved for Membership—we offer a 5-percent incentive payout. For the third, ten percent. This means that in the course of a year, at current license pricing, there is an opportunity to earn $50,000.
You understand deeply what it takes to be a Member of the WTCA, and you have every reason to want only the best to become a Member of this global family. We want to acknowledge the work it takes as our greatest spokespersons, and we hope you take advantage of this opportunity.
The Annual General Assembly (GA) is the premiere event for the World Trade Centers Association (WTCA). Held in a different global region each year, it provides the host with an opportunity to showcase all that its home city has to offer. The 2019 GA was held in Querétaro, Mexico, a robust and growing economy in the region, and a demonstration of the increasing opportunities offered in Mexico and across Latin America. And while the General assembly is a WTCA event, with the exception of some programming the majority of the agenda is planned and executed by the host-WTC team. In 2019 WTCA Members were treated to an in-depth view of what Querétaro has to offer for businesses, and a demonstration of the rich and diverse cultural heritage of the city and region.
After a brief welcome from the host, day one of the event focused on WTCA business, including the Board Plenary when the Board and the Chairs of its committees report to all of Membership on their activities and priorities since the previous GA. The program also included a discussion of Headquarters activities, led by Chief Executive Officer (CEO) Scott Ferguson, who detailed major accomplishments and the fact that 2018 was the first in five years when the organization had an operating profit.
Member Advisory Council (MAC) Chairs Ed Allison-Wright (WTC Gibraltar), Virginie Blida (WTC Lille), Linda Conlin (WTC Greater Philadelphia), Pamela Pascual (WTC Manila), and Cheryl Smith (WTC Las Vegas) presented on the joint Member projects their respective MACs are currently undertaking. At only one-year-old, the MACs are fast becoming critical conduits for networking and collaboration, as well as network innovation.
The year-long 50th Anniversary campaign took center stage as it was officially kicked off in Querétaro, and Board elections were also held. The organization welcomed an incoming class of Directors that included some new faces, as well as existing Board Members returning for another term (see Spotlight on page 14 for full details).
A major highlight of the program on Monday also included a presentation by Moyo Nua—a student-led company from Ireland—which invented a seed planter for use in developing nations in Africa. The group was unanimously selected as the World Trade Centers Association Foundation (WTCAF) inaugural “Peace Through Trade” Competition winners, and was presented as such at the GA. Their invention accomplishes two critical objectives. First, it reduces physical injury and strain on workers, which helps productivity and health, and second, sales of the product provide the re-investment of funds into educations programs that help young people move beyond agrarian jobs and opportunities (for more information, see the official WTCAF press release here).
The next two days were entitled the “Innovation, Technology and Sustainability” (ITS) Summit, opened by Querétaro’s Governor Francisco Domínguez Servién, which offered workshops and presentations that both illustrated the opportunities in Querétaro, and covered key topics. From Member-run sessions on key programs or sectors, to those on USMCA, global health issues, innovative sustainable-energy solutions and visits to companies such as Bombardier and General Electric, the event promised something for everyone, including Business-to-Business (B2B) opportunities for visiting delegations. And to that end, multiple WTCs traveled with delegations who had interests in the region and area industries, and sought to explore new opportunities via the WTCA network (see Member Perspective page 16 for one detailed account).
Finally, as with all WTCA events, the agenda provided ample opportunities for active networking and collaboration—including meetings for each of the WTCA’s Member Advisory Councils—and plenty of social interaction. From a Welcome Reception, to a cocktail party at the Modern Art Museum and of course, the Gala Dinner on the closing evening, there was no shortage of time to connect with fellow WTCA Members.
As with all GAs, the event closed with the official “Passing of the Goble,” when the host city closes the event with a hand-off to the next WTCA Member to host the event. After a brief gift ceremony to hosting WTC Querétaro, WTC Taipei’s President and CEO, Walter Yeh accepted the responsibility with a promise to provide WTCA delegates with another stellar event to remember. Stay tuned for further updates and keep an eye out for communications on that event next year, slated for March 1-4, 2020—it is a must-attend event as we conclude the celebration of WTCA’s 50th Anniversary!