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Emerging Business and Trade Opportunities in Latin America

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Public Policy
Saturday, 09 March 2013 10:25

Arthur Freyre

The International Law Section of the Florida Bar this past week hosted a seminar on Emerging Business and Trade Opportunities in Latin America in Coral Gables, Florida.  The speakers discussed the various opportunities and obstacles in the emerging Latin American market.

The first speaker, Violeta Longino spoke about the business climate in Argentina and Mexico.  Concerning Argentina, she mentioned that Argentina is moving towards Venezuela in the sense of over-regulation. To put this in perspective, it is easier to open a corporation in China or in Afghanistan than it is in Argentina.  In contrast to Argentina, Mexico is moving towards open markets.  There have been reforms in the energy sector, and labor laws.  Mexico has even passed an Anti-Corruption law, which stemmed out of a litigation involving Walmart.

Afterwards, Federico Goudie, discussed the opportunities of doing business in Brazil and Chile.  Both countries are very popular to invest in, and will remain so for some time.  Chile’s business climate is very favorable and investments are encouraged.  Although Brazil is making great strides in growing its economy, Brazil still faces obstacles in terms of attracting foreign investment.  The source of that difficulty is found in transparency issues and with the tax code.  It was also highly suggested that when doing business in Brazil or with a Brazilian company, include an arbitration clause as part of your agreement.

Roberto Pupo discussed Columbia’s and Venezuela’s business climate. It was an interesting case study of two neighboring countries going in opposite directions in terms of economic growth.  Currently, Columbia is the third largest economy in Latin America.  The respect for rule of law and the recently signed free trade agreement with the U.S. are major causes for this economic boom.  Mr. Pupo continued by explaining new trends in Columbia with private/public partnership and with a new form of corporate structures.

Venezuela is the fourth largest economy in Latin America.  Despite this fact, foreign investment has been lagging due to three factors.  The first factor is increasing government regulations.  The second factor is the use of nationalization by the Venezuelan government.  Although there is a compensation mechanism in the Venezuelan law, compensation is a lengthy process and very limited.  The third and final factor is that Venezuelan law has a strict repatriation of profits for foreign companies.  One can infer that Venezuela’s economic ranking will be dropping if there are no changes to these obstacles.

The final speaker was Pedro Freyre, who spoke regarding Cuba.  Mr. Freyre described Cuba as a country that will be perpetually known as the country of the future.  One whose potential will be realized in the future but with no timetable as to when will the future come.  Currently, Cuba is in the process of shifting from a charismatic leadership to a collective institution as seen in China or in Vietnam.  Recently, Raul Castro named Miguel Diaz Canel as his successor.  In terms of an economy, Cuba aspires to become like Venezuela.  Mr. Freyre did point out to some market reforms in the small markets or “timberiche” as it is called.  In terms of sectorial opportunities, look at the biotechnology, agriculture, healthcare, housing, and energy.  However, Cuba faces three challenges in demographics, budget, and with Helms-Burton, which calls for a democratic Cuba.

The presentation concluded with a Q & A session. The panelists were asked only question, “Which other emerging market should one keep an eye on?”  The answer was Peru.

The session was good and could have continued for another day. There is a lot to talk about in this arena and there are many U.S. companies looking to expand the sale of products and services throughout the Western Hemisphere. While there are many business opportunities, there are also legal and political matters that need to be addressed when working in the Americas. If your company has never done so, be sure to consult with people that are familiar with the business, regulatory, and political climate in the region.

Please do not hesitate to contact the Law and Public Policy Office of Poblete Tamargo to assist you researching the market and investment opportunity in both Latin America and the Caribbean.



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