Virtual Trade Mission
Minnesota
CAN- Communidad Andina de Las Naciones (The Andean Community of Nations)
Ecuador, Peru, Colombia, Bolivia, Chile*
As part of the PPPs agenda, the TCA has established the Virtual Trade Mission as a platform to foster an open dialogue that fosters transparency, accountability and compliance with corporate and government responsibility principles.
Public-Private Partnerships (PPPs) established to facilitate dialogue in an open and transparent way, between local and foreign governments, public and private sectors, corporations, grassroots organizations and all trade actors in the region.
Why South America?
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Global expansion can provide supply chain diversification, a richer talent pool, access to countless new markets, and profitable business opportunities.
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A region that shares similar cultural and political values
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The Comunidad Andina de Naciones (The Andean Community of Nations), made up of Bolivia, Chile (Associate), Colombia, Ecuador, and Peru, is one of the safest trade blocs in the world. The United States is their largest trade partner responsible for half of their total trade.
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With a combined population of 140 million, the Andean Region offers fast-growing markets and excellent business opportunities in South America.
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According to Forbes, overall Latin American GDP is expected to grow 2.6 percent in 2021, particularly due to strong economies in Mexico, Brazil, Colombia and Argentina. Latin America's strong growth could lead to outstanding business expansion opportunities.
Participants of the Virtual Trade Mission
With the 3rd highest quality of life in the US, Minnesota is a dynamic center of both commerce and culture. As a hub for innovation and creation, Minnesota fosters 18 of the Fortune 500 companies and their headquarters in Minneapolis. Of those companies, 5 have operations in food production, such as some well-known companies which include Land O'Lakes and Cargill.
Notably, Minnesota ranks 2nd nationally in the overall number of medical patients, which is attributed to the strong bioscience and healthcare sector. Specifically, the Mayo Clinic located in Rochester, Minnesota, is known as one of the leading medical institutions in the country.
Furthermore, mining in the north of the state produces 75% of the iron ore used across the country. Known as the Land of Ten Thousand Lakes, Minnesota has abundant natural resources and equally vast manufacturing and service sectors.
Sitting at the strategic center-point of North America, and as a Midwestern state with unique access to an ocean-connected port (Duluth), Minnesota shipped $22.2 billion worth of goods around the globe in 2019. Canada and Mexico rank as Minnesota’s No.1 and 2 trade partners respectively, with the USMCA trade deal (formerly NAFTA) being a major contributor to this phenomenon.
Other countries in Latin America are growing in importance to the economy of Minnesota as well. Notably, Costa Rica ranks 11th in the number of goods exported to Minnesota: between 2016 to 2019, trade astronomically increased from $229 to $438 million worth of goods, an increase of 52%.
The state’s diverse economy is essentially parallel to that of the USA overall, only on a smaller scale, thus making Minnesota an ideal location for startups. Meaning that if an industry or product does well in Minnesota, it is likely to succeed in the rest of the US.
Since the early 2000s, Bolivia has historically been averse to forming business partnerships with the USA and other Western nations. However, their recent political shift towards government policies that are receptive to both international and US business, make Bolivia a nearly untapped market for US businesses.
Bolivia has immense natural resources, that until only recently have become available to the international market. Notably, the nation has one of the world’s largest lithium reserves, a key component in batteries. As battery technology improves and as electric cars inevitably become more widespread, Bolivia has the potential to become one of the worlds’ premier mineral exporter.
Bolivia’s increasingly friendly relations with the West means American business, for the first time, have an opportunity to establish an operation in this newly-open market.
As foreign enterprise had previously been extremely limited, American businesses have an unparalleled chance to trailblazers in a market with almost no competition.
Business sectors including fast food, manufacturing, mining, retail, healthcare, and agriculture, just to name a few, can all partake in the new era of prosperity that a newly available market like Bolivia has to offer. Bolivia is open for business!
Despite its relatively small population, Chile is one of the wealthiest countries in the Spanish speaking world. Mining makes up a significant portion of the Chilean economy in addition to agriculture, wine production, and fishing as well.
Because Chile is located in the Southern hemisphere, its growing season is the opposite of that in North America. Furthermore, Chile’s Mediterranean climate and fertile volcanic soil means that the country can reliably export agricultural products to North America during our winter and fall months.
For decades, Chile has been a market open to US businesses and foreign investment and has minimal import/export tariffs. Because of this, Chile is often seen as the ideal gateway country through which US companies begin operations in Latin America.
Chile imports a variety of goods from around the world, with electronics and medical devices being of particular interest. Notably, because of Chile’s prosperity, luxury products are also in high demand. American brands tend to carry a certain level of prestige in the nation, meaning that specialty goods that appeal to upper-middle-class markets tend to sell well in Chile.
Furthermore, finding reliable business partners in the nation is not difficult given the prevalence of multinationals, a strong business culture, and a generally well-educated population. Because of their close relations with the US, educated population, and relatively wealthy population, Chile provides a multitude of opportunities for US firms seeking to expand their operations into South America.
Having recently emerged from a tumultuous past, Colombia is a growing economic powerhouse in South America. In fact, it’s GDP grew an astounding 37% from 2008-2018.
As the second-largest Spanish speaking country, with a population of nearly 50 million, Colombia represents a significant portion of the market share of all consumers in South America. In short, a sizable population, combined with peace and stability, is a formula for success that Colombia embodies.
Colombia exports about $43 Billion and imports almost $50 billion worth of goods annually. The United States purchases nearly 30% of all Colombia’s exports, making the USA the nation’s largest trade partner.
The USA historically has strong business ties with Colombia, meaning a comprehensive and reliable trade infrastructure exists to help move goods between the two counties.
Coffee is one of the largest exports in Colombia. However, various other agricultural products, like bananas and sugar, in addition to luxury materials, like emeralds and gold, represent similarly large portions of Colombia’s export value. Although agricultural and raw materials production is critical to the Colombian economy, the recent peace and stability have served as a catalyst for a rapidly growing manufacturing sector as well.
The size of the economy, in conjunction with its newfound prosperity, makes Colombia an attractive location for US firms seeking to expand or do business in a premier, up-and-coming market.
Ecuador presents myriad lucrative opportunities for US business. The USA is Ecuador’s largest trade partner, with the USA purchasing over a third of all Ecuadorian exports. The agricultural and fishing sectors are of particular importance to Ecuador.
The nation is one of the largest flower exporters in the world, 25% of all exports are seafood, and bananas alone comprise over 20% total exports. Because of its’ robust agricultural sector, reliable farming equipment is in high demand.
Because of Ecuador’s growing middle class, more people have access to healthcare than ever before. However, Ecuador does not produce medical equipment is sufficient quantities to serve its own demand. Therefore, US-based firms in the medical industry have a unique opportunity to capitalize on this supply vacuums and sell their highly sought after products in Ecuador.
Ecuador levees no export taxes, has a well-established trade partnership, and shares the same currency as the USA, meaning sourcing supply chains from the county is efficient and easy. Similarly, foreigners can legally establish, own, and run business in Ecuador thus making it an attractive destination for your business to expand internationally. Despite its’ relatively small size, Ecuador offers huge opportunities for US businesses of all industries.
Peru has one of the fastest-growing economies in South America that will only become more prominent on the global stage in the decades to come. Importantly, Peru’s main exports are the base raw materials necessary to manufacture electronics. For example, copper and gold, respectively, comprise nearly 27% and 15% of Peru’s total exports.
Additionally, trade between Peru and the United States grew 18.5% from 2017-2018, making the USA Peru’s fastest-growing import market. Peru, however, is not reliant on exports; rather, its’ strong tourist industry, agricultural, and domestic manufacturing sectors provided a stable backbone to its diverse economy.
Business in Peru is a relatively safe, and potentially lucrative, investment because of its exponentially growing export capabilities built on a strong, stable, and diverse economic foundation.
While the nation produces raw materials for electronics, much of the manufacturing is done elsewhere. Because of this, electronics of all varieties comprise Peru’s largest and most desired import sectors.
Additionally, Peru relies on other nations to import cars and heavy machinery as well. Peru’s growing trade relationship with the USA and its similarly growing economy has resulted in an emerging middle class with more purchasing power than ever before.
This presents an opportunity to American businesses, especially in the electronics and manufacturing sectors, to sell their products in this market and purchase raw materials from a stable source. If there is one word to describe the economy of Peru, it’s “growth”.
