With 58 percent of U.S. companies exporting to only one market, usually Canada or Mexico, Look South will help companies understand why expanding to more markets will improve their bottom line. While the typical business that sells to just one market generates roughly $375,000 in export sales, companies with two to four export markets have average export sales of $1 million; and those who export to five to nine markets average $3 million in export sales.
Why Look South? More than half of all America’s FTA partners are in Latin America. These 11 economies – Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, and Peru – have a rapidly growing base of middle-class consumers and diversifying industries. The United States’ FTA partners in Latin America offer a unique combination of similar language and business cultures. In addition to low or zero tariff rates on merchandise, FTAs increase transparency, improve the business environment for services and government procurement, and reduce market access barriers in areas such as intellectual property rights, standards, and customs procedures. These countries also have made clear commitments to opening their markets and integrating supply chains with the United States through the Trans- Pacific Partnership, Pacific Alliance, and the U.S.-Mexico High Level Economic Dialogue.
The International Monetary Fund forecasts that for 2014, Mexico should return to 3 percent economic growth. Among our six CAFTA-DR partner country markets, average economic growth per country of more than 3 percent is forecasted. For the remaining target markets, economic growth projections range from 4 (Colombia) to 7 (Panama) percent. Longer term projections are even more attractive for the Look South markets. In addition, more than 40 percent of U.S. exports go to the Americas, and those exports are growing faster than our trade with the rest of the world. Mexico is our third-largest trading partner and the second most important export destination for American small business exporters. In 2012, United States goods exports to Mexico reached a record $215.9 billion, and 2013 data show that the United States is on track to surpass this record. Looking south, we have already seen double-digit percentage growth in exports to Colombia and Panama since our new trade agreements went into effect.
Partnerships Drive Look South Look South will ensure that U.S. companies are aware of emerging trade opportunities in Latin America and understand the federal resources available to help them penetrate these markets. Federal agencies will work to encourage U.S. companies – with a focus on small and mediumsized businesses – to export to the region by:
Source: U.S. Department of Commerce
