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>> Welcome everyone and thank you for standing by.
At this time all participants are in a listen-only mode
until the question and answer period.
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please press star then 1 on your phone.
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And now I'd like to turn your conference
over to Ms. Linda Abbruzzese.
You may begin ma'am.
>> Thank you and good afternoon for those of you joining
on the East Coast and good morning for those
of you joining us on the West Coast.
Good morning to our speakers in the other parts of the world.
Thank you for joining us for webinar on Realities
and Benefits of Colombia
and Panama Free Trade Agreement Webinar.
We are please to announce that we have
over 103 people registered for this webinar.
And my name is Linda Abbruzzese.
I'm an International Trade Specialist
for the Trade Information Center with the U.S. Commercial Service
of the Department of Commerce.
This webinar is being brought in cooperation by the U.S.
and Foreign Commercial Service, Caterpillar Latin America,
Export-Import Bank and the Irwin Brown Company.
This webinar will provide the information
about the market opportunities in Colombia and Panama
and how to do business there.
In a moment, I'll turn this presentation
over to Daniel Crocker who is our Senior Commercial Officer
for Panama of the Foreign Commercial Service.
Next who will be speaking is Cameron Werker
who is our Senior Commercial Officer in Colombia
who also a part of the Foreign Commercial Service.
David Carius Jr. of Caterpillar Latin America will then speak
followed by Kate Bishop who is the Business Development Officer
of Export-Import Bank.
And lastly our last speaker John T. Hyatt whose the
Vice-President of import of the Irwin Brown Company.
All speakers will be available at the end of this presentation
to answer your questions
and contact information will also be provided.
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Now, I'd like to introduce live
on line our Senior Commercial Officer
of the Foreign Commercial Service,
Daniel Crocker, thank you, Daniel.
>> Linda, thanks very much.
I hope everyone can hear me okay.
Just to put my remarks in a context and I'll try to be brief
so that there's time for Q and A. I'd been in Panama for just
over a couple of years and I'm coming
from some other Latin-American post most notably in Mexico
and Brazil which are both much larger markets.
The Panama is remarkable in a couple of ways
so let's go right into it.
So the important things to know about Panama and it really comes
down to this and has been for 500 years
in history is the location.
It's all about just what your real estate agents always told
you it's location, location, location.
So if you look at Panama from the sort
of a straight stats play, you say, okay, there're a population
of three and a half million, that's a really small country.
And but then you start looking into the GDP stats
and you're actually see some numbers
that are pretty revealing, some approaches in power parity point
of view is 40 billion dollars economy
and that's grown 11 percent in the last year,
so it's really high growth.
But when you look at the breakdown,
that's when things get start getting interesting
and it tells you that Panama is not
like another Central American country, not at all.
Because if you look at the services sector,
that's contributing 80 percent of that GDP.
So what that tells you right away is
that Panama is a service oriented economy.
It does not manufacture much of anything
so even though there is small market, a trading
and service oriented economy tends to have low barriers
to entry, tends to be very pragmatic which regards
to U.S. Goods and Services and attempts
to be an attractive market for a variety of reasons.
And if you look at that, that's pouring out in the statistics
for U.S. exports alone.
So we're looking at a 34 percent jump from 2010 to 2011
and over 8 billion dollars of U.S. exports last year
to Panama, that represents over 30 percent market share
of all Panama's imports.
And remember what I said, Panama doesn't make anything.
Maybe they make some beer, maybe they make some milk
but pretty much everything else, it's going to be imported
and the significant percentage of that is imported
from the United States.
What does that mean for U.S. exporter?
It means there's already a high level of acceptance
for U.S. goods and services.
Ideologically, culturally, the environments step
for you for a new entry.
So what are Panama's advantages and all sort of offline,
I'll touch upon a couple of the disadvantages but primarily,
it's all glory for U.S. exporters,
not so much for investors but for exporters.
First of all, right off the top is the exposure
that Panama is getting because of the recently ratified Free
Trade Agreement with the United States and we'll touch upon
that a little more separately
but that's a big play for Panama.
It's a big advantage for you in terms
of competitive advantages, in terms of duties.
But the important thing is if you look
at the Panama's real advantages,
it's the logistic sub for the region.
It's a logistics sub for the Americas.
And it's certainly the Panama canal is a century old
and operating quite well and the expansion plans are well
underway and they're going to happen and it's going
to make it even more important in terms of global
and regional commerce.
But there are also other things,
for instance it's a dollarized economy.
And when I say dollarized, I don't mean they have a peso
or boulevard that's literally pegged at a dollar
and maybe they'll fight to defend it,
under crushing debt maybe they won't.
What I mean is they have no central bank.
They don't plan to save their money so if you're paying people
in transactions or more importantly as a US taxpayer,
if you're getting exporter, you're getting paid.
You're getting paid in cold hard American cash,
and that's means a lot.
If you think about it,
it simplifies all kinds of business planning.
If you have a commission basis for your reparation
down here you don't have to hedge
against foreign exchange risk.
You can offer terms to your US exporters using X
and bank credit insurance against a basket of receivables
and not worry about hedging against foreign exchange risk.
All kinds of nice things happen.
But it also means that that stability, the political
and economic environment is there
which is really unique almost in Latin America.
Latin America, if you had periods
of hyperinflation characterized by the times
of deflation stability.
In Panama because there's no central bank,
they can't inflate their way out of debt.
They can't inflate their way out of debt.
And what that actually means is
that they're inherently more conservative about getting
into debt in the first place.
So we see some of these lowest historical rates of inflation
of anywhere in the hemisphere.
As I mentioned, a very stable economic
and political environment, but that's also a no small part due
to the fact that the US Government presence
and particularly military presence has up 'til a couple
of decades ago, been very strong in the region.
We've seen, we've seen these areas of strategic assets
and we've certainly worked very closely and continue
to work very closely in Panama to make it as safe as it is.
I would assert at this point having lived in Brazil
and Mexico and especially Northeast Mexico, I would assert
that Panama City is perhaps the safest city in Latin America,
the safest capital city that is.
And that means a lot for you doing business here.
It means a lot for you being able to retain reps and agents
and distributors, and more importantly,
the secondary consequences of having people invest in Panama
and create more economic growth which results
in opportunities for you.
Now, sophisticated banking sector goes without saying
because of the services, because of the global logistics.
So let's move on and take a look at what you should look
at when you talk about Panama.
Now for a good number of companies,
remember I said there's over 8 billion dollars
in US exports to Panama.
Panama is a good market and they know of its own right.
Small market, low barriers to entries, so why not?
Easy to get to.
But when it gets really interesting is what David Carius
for Caterpillar is going to talk about a little bit later
and that is thinking of Panama creatively
as a regional play, as a regional play.
Let me give you an example.
For instance, the air hub for Panama,
Copa Airlines just bought almost 2 billion dollars
in Boeing jets last year.
And that is enough to fly 3 and a half million Panamians around,
it's because Panama is becoming a regional air hub.
And so you get all kinds of air cargo, logistics.
You get multinational settling here with regional headquarters
because they are nonstop to a whole bunch
of points throughout Latin America.
You get all kinds of airport growth opportunities.
And of course, all the logistics of things you would move
by ocean done on freight are continuing to increase
because of the expansion of the canal.
Now just a word on that expansion,
I don't want to get into it.
We can do it in Q and A. But the bottom line is this,
in 2 or 3 years you're going to be able to see boats
that can carry 5,000, 20 foot equivalent units passing
through the canal.
That's going to grow in about 12,000,
20 foot equivalent units.
In other words, over doubling the capacity of the boats
and tankers that can move through the Panama Canal
and that has a ripple effect on ports.
So if your into-- if your into ports and supportive logistics
for ports in the United States,
this is something you are almost certainly already watching.
Now, the other thing that's interesting in terms
of Panama's investment scheme is
that in public investment alone there's over 13 billion dollars
for the projects and a lot of that is, is predicated
on the fact that Panama sees itself
as a very attractive place to do global, regional, logistics,
and attract multinational headquarters for regional play.
So those are the kinds of things
that you'd most want to capitalize on.
Now, what I want to touch upon next is the free trade agreement
and why it matters to you.
And you're going to hear this echoed
by my colleague Cameron in Bogota.
But the bottom line, hands down, hands down advantage
for you is your margin in winning the business.
Look, I worked for a tier one automotive and railroad supplier
for few years in Richmond and I'll tell you something,
this kind of margin to draw from 10 to 15 percent
to 0 has a competitive advantage over South Korean bearing--
type of roller bearing manufacturers.
That meant a lot to us.
So that kind of thing you're going to hear that echoed
by Caterpillar I think in terms of their FTA Growth.
But you, basically this is the big fat advantage
for US exporters.
This is a big win for us that's a competitive advantage
over European, Chinese, South Korean exporters
that you're competing against for the business here in Panama.
It's also, we think it may help
with government of Panama itself.
Now it's usually sunshine and glory for US exporters to Panama
with the one caveat that outside
of the Panama Canal authorities procurement
of let's say 250 million a year on ongoing operations,
selling to the rest of the government
of Panama has been a little bit tricky.
It's not so transparent.
So we're actually hoping, there are parts of the agreement
which touch upon that and we're actually hoping
that will give us more chief,
more of a trade enforcement capacity to go
after these procurements where you don't feel
like you're getting a fair deal.
It's also a political statement and that carries David
into as well in terms of bilateral relations.
It furthers the bilateral relations
that makes people more inclined
to view the United States favorably.
That actually, it really does translate into things.
And we see that, we see a huge growth
in franchise opportunities for instance as a result of that.
People like going to the American franchises,
they feel well disposed, they say,
"We've got a good relationship
with this country," and that matters.
And then finally, it's like that Good Housekeeping Seal
of Approval, if the Good Housekeeping Seal of Approval
that means Brazilian companies might relocate the regional
headquarters here, what is that mean to you.
Well again, there's a secondary consequence that might mean
that they're all kinds of follow an export opportunities
for services and the like, infrastructure opportunities.
So those kinds of things are the kinds of things
that we would expect to see
with more regional headquarters operating care.
So what are your next steps?
Well, it's pretty simple.
First, we've got a lot of content, we put a lot of content
on export.gov/panama, a lot of content.
We strongly suggest that you take 10 or 15 minutes to sort
through some of the stuff we put there particularly
like doing business in Panama guides, that's your first step
because it's easy and it takes you 10 to 15 minutes.
Second, if you like what you see, work with one
of our US Exports Assistance Centers and you can type
in your zip code and find it within two clicks.
And then third, if you want to pick up the phone
or send us an e-mail we'd be glad to talk to you
about specific opportunities.
The devil's inevitably in the details
so in the end what you want to--
going to want to do is talk to a real life person
and we're there to help you out.
Thanks very much.
[ Silence ]
>> It's Cameron Werker from Colombia will follow,
our Senior Commercial Officer.
>> Okay, hello, everybody on the phone.
This is Cameron Werker, Cameron live from sunny Bogota.
It's a beautiful day down here.
Thanks Dan for a great presentation on Panama.
As you know, I'll be talking about Colombia now.
And if you thought Dan spoke fast, hold on tight
if I speak probably a little bit faster than Dan does,
but I got a number of slides,
I'm going to launch right into it.
I think that more than anything, right, today,
Colombia suffers more from perceptions of the past
and it does the realities of the present.
Colombia is not the narco state that people think
when it was back in the days of Pablo Escobar, the problems
from the '80s and '90s externally still have internal
problems, internal conflicts but in the last 10 years,
there's been a revolutionary change within Colombia
and I'm going to talk about that.
But first, just at a glance,
Colombia is actually the third largest market in all
of Latin America after Brazil and Mexico.
And as Dan talked about location, location, location,
Colombia is also [inaudible] prime,
we actually boarder Panama but more importantly, internally,
Colombia had five bona fide business hubs.
If you think about some other markets in Latin America,
again outside of Brazil and Mexico,
through one setting Argentina maybe two, Chile one.
We have five: Bogota, Valencia, Cartagena, Cali, and Medellin,
fall with over a million populations.
In fact, there are over 40 cities in Colombia that have
over a 100,000 people.
So the market opportunities for your products
and services are vast and not concentrated in one single city.
What we've seen recently in Colombia is an explosion
of foreign direct investment
which is third growth domestic product growth.
2011, we've got 5.5 percent GDP growth.
Of course, we talked to an accountant or an economist
or anybody who get 100 different stories but most agree
that Colombia will continue to experience between the 5
and 6 percent growth rate for the yeas
to come, certainly in 2012.
The big driver of that growth is the fact that in the '80s
and '90s and previously, Colombia have a lot of problems.
And so, they all almost a closed-off society,
closed-off economy.
And over the last 10 years with a dedicated focus
to improving the safety and security situation
in the country, they have opened it up to foreign investors,
international business.
In a minute I'll show you slide
with all their free trade agreements.
Of course they have one that we're waiting to be implemented
with the United States, so a tremendous amount of growth.
Again, if you look at what we have in the '90s,
you can see the slide on the left.
I'm not going to read it,
but today the economic liberalization is key,
foreign direct investment reached 13 billion dollars
in 2011, 80 percent of that in the oil and gas industry.
I can assure you unless you're in the oil and gas industry
or the mining industry then you will not be operating
in portions of Colombia that are dangerous.
So if you got 80 percent of 13 billion which is
about 10 billion dollars pumps in to some
of the most dangerous areas in Colombia,
imagine what the opportunities are in the safe havens
of the cities in the populated areas.
We've seen increased kind of fancy,
increased judicial reform,
increased corporate social responsibility by multinational
and Colombian players and again stressing the improved
security situation.
That's not to say that everything is rosy,
still we have a large informal economy in Colombia of course,
it goes about anywhere whether you're in Washington DC or Paris
or Bogota, there's going to be a certain amount
of bureaucratic red tape that you have to deal with,
obviously, no difference here.
But at the end of the day,
you do actually have a very sophisticated market.
And if you take anything away
from these 10 minutes is the fact
that you have a huge competitive advantage in Colombia.
And that competitive advantage is the fact that Colombians
like to do business with American.
They prefer and in some cases demand American product.
Again, this is a direct result of all
like U.S. military intervention and assistance during the 80s
and 90s, 10 billion dollars--
sorry, 7 billion dollars over 10 years in foreign
and U.S. government military assistance in Colombia.
Certainly the government appreciates U.S.
military hardware.
But what happen is that the consuming public
of Colombia saw the benefits that U.S. military brought
to its country and they extrapolated
that to equate the quality consumer products and services.
So it's not as threat to say that Colombian country
where is public and private do prefer to buy American.
You can't have a greater competitive advantage,
in fact the only country in the world I can think for that is,
all through occurs is Albania
and Colombia is a much better market in Albania.
I mentioned that I was going
to demonstrate how liberal the market here
in Colombia has become.
This is the list of some of the free trading they missed
that Colombia has already implemented and ratified
or has pending ratification.
They have free trade agreement with almost everybody
in Latin America, including Canada,
implemented as a largest of last year.
May have free trade agreements that are negotiating
with the European union
and of course we're waiting an implementation
in the free trade agreement with United States,
which right now is a very technical phase,
but most people are optimistic that this going to get done
by the end of the summer of this year.
So again we have to wait and see, it's very technical,
it's not political anymore.
We have to see how Colombia is veteran in some
of the things U.S. government required
of its bilateral trade partners.
But again, just an indication of how open Colombia has become
to the outside world and as a trading partner
to the world being-- the FDA which I know is on mind
with a lot of people, it's not accrual
but it will certainly open up huge opportunities
for U.S. exporters of products and services.
The service industry here is a staggering 166 billion
dollar market.
Again, largely driven by oil and gas,
but it's probably the spectrum of industry.
U.S. goods that are coming
in upon implementation immediately 80 percent
of U.S. products will enter into the Colombia Duty Free.
So I'm not going to reiterate what Dan said
about what an incredible advantage that is
to your costumers especially if you're selling input material
that Colombian costumer then further manufactures
into a finished good.
As Dan statistics show that immediately makes you between 10
and 14 percent whatever tariff might be,
makes them more competitive against their competitors.
So if you are a U.S. textile manufacture
and you are exporting your products
to Colombian garment manufactures
and they are competing it Indian or Chinese garment manufactures,
you've just made them that much more competitive for the huge,
huge advantage for U.S. exporters.
It will liberalize the services industry.
I mean well, just continue the national treatment
that Colombian firms get over U.S. firms,
this will basically put U.S. firm on equal footing
as if they were a Colombian firm, so again,
huge advantages in that sector.
Again a couple specific examples, the auto industry
which is huge market, auto parts
of industry are a huge market here in Colombia
for U.S. exporters have an average tariff of 17.4 percent.
Depending on the specific the HTF code of the part,
we think can go down to zero if it's in the category A
or would be phase in over a number of years, but regardless,
immediately making those product more competitive.
Again, my time is getting short so I'm now going to through this
in detail but you can see the slide.
Again, these are some of the best process
that we've seen in Colombia.
In addition to the services industry, construction is huge.
I mentioned 13 billion in foreign direct investment
in Colombia in 2011, a lot of constructions
because there are a lot of infrastructure project
to be bid on in Colombia.
In fact the Colombian government has allocated 26 billion dollars
over the next 4 year of infrastructure project.
That doesn't even account for private investment
or public private partnerships.
That's 26 billion right off the to for roads, rail, airports,
and ports, in addition to infrastructure leading sectors
to U.S. exporters as you can see on the slide.
Again, anything regarding construction, equipment,
[noise], aircraft, parts, fertilizers, et cetera.
We have 13 best prospects in Colombia for US exporters
that you can read about in our country commercial guide
on the www.export.gov website.
Lastly, just a couple general tips.
I'm not here to net sale and sale you on a Colombia,
it may sound like I am.
Really, what I'm trying to do is open everybody's eyes
to what the reality is in Colombia are,
what the opportunities are.
You all need to make a decision on your own,
if it fits your business strategy to investigate Colombia
as a potential export destination.
But just like in any market, Colombia is no difference.
Prepare yourself.
I mentioned the country commercial guide.
It's readily available for free to US companies on www.us
or export.gov website.
The one thing that it might be a little bit different
in Colombia is that we do have the Office
of Foreign Assets Control here and that is something
that is affectionally known as the [inaudible] list.
These are companies or individuals
who have been determined to have involved
in the laundering of drug money.
You definitely want to make sure you checked this list.
There's a link through it
on our commercial service Bogota website, you know.
You can search names and people names of organizations
because they have been completely black listed
from US financial institutions
as well Colombian banking institutions,
pretty much persona non grata in terms
of doing legitimate business.
Always want to do, due diligence
on your partner or large customers.
I would also recommend using arbitration and mediation
as a first line of defense for dispute resolution.
You know, Colombia is not different anywhere else.
The last thing you want to do is find yourself in a court,
this law in Colombia, so I will highly recommend using those two
mechanisms first and foremost before going to court
and I will give legal advice.
Spanish is the language here and I'm not going to go
through this 'cause I know I'm very short on time.
And lastly, this website here is hit or miss
but what it will do is that you put in your HTS number
for an export to Colombia, they will tell you
if your product goes to zero immediately
or if there is a saving period.
This is very useful for planning and also very useful
for your customers as they're the ones most likely paying the
import duty.
I'm going to stop there and I want to thank everybody
for their time and attention and I will pass it
on to the next speaker, thank you.
[ Silence ]
>> Okay, we'll go to our next speaker who is David Carius
of the Caterpillar, Latin America, David?
>> Yes, good afternoon everybody.
Special thanks to Dan Crocker and his commercial team
for inviting me to come speak with each of you today
about what we as Caterpillar really see
as a great opportunity to improve lives of individuals
around the world, but also to improve obviously
from our perspective business by focusing
on free trade agreements.
Without both of these commercial teams, our counterparts
down there in Colombia as well as the guide here
and Dan's group, the American and U.S. Chamber of Commerce
and other organizations like Latin American Trade Coalition
and Business Rountable, these FTAs which are so highly,
highly critical to Caterpillar will never have happened.
So for each of you on the phone who's been involved in the past
to these free trade agreements, thank you very much.
From our perspective, there are number of realities that we have
to deal with when it comes to free trade agreements.
So what I'm really going to try and do for you right now
over the next couple of minutes is to give you an idea
to how we view FTAs in a 30,000 foot level.
From there, what we'll do then is we'll discuss I guess more
details about Panama and Colombian territories.
The U.S. currently as many of you are aware had FTAs that run
down the west coast of Latin America,
obviously with the exception of Ecuador.
They're extremely important from our perspective for Caterpillar
as exports have increased substantially
in the recent history.
Just to give you an example, in 2010,
Caterpillar exports increased by 58 percent.
Now that's more than any other region of the world.
It's also important to keep in mind that 6
of 10 largest export markets for our organization
for Caterpillar are Latin America
and Colombia being one of those.
Getting a bit more specific, we saw drastic increases in exports
to these countries following their approval
of the free trade agreements.
Since the FTAs have gone into effect,
just to give you some examples, Caterpillar exports are
up about 5 fold in Mexico, about 3 fold in Chile and not more
than 60 percent in Peru.
So again, from our perspective,
free trade is absolutely imperative to doing business
and to creating a competitive environment
where we can all fairly compete with all of our competitors.
Just to get an example,
South Korea passed an FTA prior to our FTA.
From our perspective, without our own free trade agreement,
the Korean manufacturer, just to give you two examples, Hyundai
and Dusan, they would have a significant competitive
advantage over Caterpillar and other American made products.
So this fact alone makes the passage of the FTA
with Colombia all the more important.
Ultimately, the FTA that we're seeing were both allow us
to compete fairly, but it will obviously also support improve
living standards for all involved as well
as support our clients.
Let's just take for example, if you look in the top right corner
of my slide, that's when I had the triple seven.
That's a 110 truck that we manufactured
in Decatur, Illinois.
Now, our clients because of the terrorist, they're paying
about 10 percent on that product.
That means, if they're paying around a 130 to 140,000 dollars
and duties for each truck they purchase, now we have a number
of this products running around the Panama Canal.
Those clients of ours who have put their trust in Caterpillar
to purchase our products are paying 130
to 140,000 dollars in duties.
With this free trade agreement, that goes away.
So from our perspective, our clients can take that money
in that capital and they can invest it in other things.
At the end of the day, as we all know,
free trade agreement is great for us but they're also great
for other manufacturers in the U.S. So we do expect in many
and the product support side of the business as well
as the machinery side of the business, we do expect
to see competition increase.
But again, I said it before and I'll say it again,
that it's a-that's a good thing.
Competition is good for us
and it's good for, again, our clients.
Both Panama and Colombia are very friendly markets
for Caterpillar and many other companies.
They both had, as you guys saw from Cameron and from Dan,
they both has solid GDP growth, stable interest rates,
and have overall friendly business
and political environments in which to operate.
So increasing trade with both Colombia
and Panama is extremely important for our organization.
Now, again, in a couple more details or little more details
about Panama specifically, it's on to our dealer YASA
which is just recently taken over.
They've been here little less in a year now.
But they were our dealer in Ecuador for 90 years.
So they are still currently are dealer in Ecuador
and now they're able to sell Caterpillar products in Panama.
They have been and continued to prepare themselves
because whenever the FTA comes changes
so they're preparing themselves as we speak.
When we talk about the free trade agreement though
in the context of Panama, I just want to make it very clear
and Dan alluded to this earlier.
We're not just talking about Panama market and the importance
of that market specifically.
What I'm doing is I'm talking about a market
that many consider the crossroads of the world.
With that being the case, what we're doing
in Panama affects our business
in many other parts of the world as well.
So beyond the dealer that we have here in Panama,
the employee about 400 individuals,
beyond that dealer YASA, Caterpillar, we are investing
in significant amounts of capital in the country.
We've established a new and used equipment facility here
in Panama and that equipment facility serves
as the staging ground if you want to call it that
and supplies many regions to the world with equipment.
Many of you are aware that we're constructing a costumer
demonstration and learning center here in Panama as well
that will support our clients
and various training requirements throughout the
entire region unless we forget
that we Caterpillar love America.
We have about 300 Caterpillar employees operating here
in Panama as well.
Now those 300 employees are representing 10 different
Caterpillar business units, both commercial business units
as well as back office personnel.
So it's, hopefully it's obvious that the FTA
with Panama is highly critical and as we attempt
to ensure our investments here, benefit our clients,
the local market, our dealers
and the overall Caterpillar organization.
As we're all aware and I believe Cameron,
you alluded to this before with the construction,
investments in Colombia.
One of the more owner straight barriers
and again we're probably all aware
in the lack of infrastructure.
This is something else
that really makes Panama attractive as a country.
They have an infrastructure that includes the Panama Canal,
Panama Canal Railway, port facilities both to the Pacific
and the Atlantic sides.
Beyond this, they have continued investment and infrastructure
that is absolutely critical to any FTA,
is continued investment and infrastructure.
Panama is currently investing in the expansion
of the canal, the Panama Canal.
They have new metro systems under construction,
various highway construction projects, et cetera.
So they continue to invest in their infrastructure
which again, will help the make any FTA effective.
Now, it's not widely known but in 2010,
Caterpillar exporting more products to Panama
than we did in South Korea.
So again, this makes Panama that much more critical.
So we talked a little bit about Colombia and--
or I'm sorry, we talked a little bit about Panama
and now we'll talk a little bit about Colombia.
That is home to our largest dealer
in the Caribbean Central America
and the Northern part of South America.
They currently have about 4-1/2 thousand employees working
for them and have been existence since 1927.
Now, as I mentioned a couple of times,
without solid transportation infrastructures in place,
FTAs won't have much in an immediate effect.
Because if you can't get your products to the market,
the magnitude of terrorist that doesn't even matter.
So this is very much appositive again when examining Colombia
if they have been investing billions of dollars
in infrastructure as Cameron spoke to earlier,
development over the past couple of years and they continue to do
so in 2012 and we expect it to continue next year as well.
Commodity prices at the current level are benefitting Colombia.
They had extensive mining operation.
Just to give you an example, in the top right of my slide,
again, you see a picture there.
That's a D11.
A D11 is the largest tractor we make and in front
of it is a little skid steer loader.
We have 100 D11s operating in the same mine site in Colombia.
Now that's the highest population on any one site
in the world for Caterpillar.
So beyond the extent of investments taking place
by the government of Colombia, we as Caterpillar
like Panama are also investing in the future of Colombia.
We've just established the Cat financial operation there.
Within the country that will help us support
and better serve our clients there.
And like I did to Panama,
if you want to compare Caterpillar exports to those
of other countries around the world, in 2010,
Caterpillar exported more products to Colombia
than we did to India or Germany.
Now again, this is very,
very significant 'cause we all understand the size
of the markets in India as well as in Germany.
So we take everything that I've talked about here
over the past couple of minutes.
I'll just try and summarize it and package it up for you.
From our perspective again, FTAs are absolutely critical
to local markets we serve and to the success
for our clients and organization.
From our perspective, if you look what they do,
they foster competitive work environments for all involve
and they ensure fair play, strength and protection
and enforcement of trademarks, thing like patterns,
intellectual property, dispute settlements, et cetera.
But beyond that, they foster increase transparency
and ultimately accountability, all good for business.
So these FTAs, however, in order to be effective,
we need number 1, class A infrastructure.
We need to continue investment in infrastructures
and we need rapid implementation of the complete
and critical free trade agreements.
Let's say, they take-- generally take 12 to 18 months.
From our perspective, we need to move very, very quickly
to implement these free trade agreements
so that we can compete with our competitors in places
like South Korea or China or wherever they may come from.
But again, thank you to everybody who was involved
in the free trade agreements.
We greatly appreciate it and thank you very much.
>> All right, thank you David.
And now, we will go to our next speaker Kate Bishop,
the Business Development Officer of the Export-Import Bank.
[ Pause ]
>> Good afternoon.
Am I on?
>> Yeah.
>> Okay. Now that you've heard from our Department
of Commerce colleagues and the two relevant countries
and seen a real world or heard a real world example
from Caterpillar, I'd like to talk to you a little bit
about that financial piece and what the government offers
in the way of financial support.
Just to give you a little bit of background,
Export-Import Bank is the official export credit agency
or ECA of the U.S. government.
Basically, any country that engages in trade
to a significant degree or even
to an insignificant degree has an export credit agency.
We've been around since 1934.
We were established in amidst of the Great Depression,
where our headquartered here in Washington DC
and we have 8 regional offices and they are in the 5 states
with the largest amount of export activity, so Florida,
Texas, California, Illinois and New York.
Our mission is to both create and sustain jobs here
in the United States
by substantially increasing the number of companies we serve
and expanding our access to global market.
We offer the range of financing products
from pre-export financing which is
where our working capital guarantee fits
in to post-export financing where we categorize insurance,
guarantees, and direct loans that we offer.
And I'd like to give you a brief introduction
to each of our core products.
The first one, pre-export financing,
this is a working capital guarantee
and it's basically directed to SMEs.
It's a 90 percent conditional guarantee to lenders
for export-related working capital loans.
Typically, banks have a country limit and with our support,
they can lend against 4 and receivables as well
as domestic receivables
and thereby expand the borrowing days of the exporter.
These loans can be transaction-specific
or revolving and we have no minimum or maximum.
Next, our most popular product is export credit insurance
or short-term accounts receivable insurance.
This is an insurance policy as you might understand,
typically goes out 6 months, in exceptional cases, a year.
It covers both commercial and political risk.
It is not, however, covered disputes
between buyers and sellers.
So if there is a misunderstanding over red
versus white wine for example, this would not be covered.
We have both lender and exporter policies under this product.
For the lender policies, we cover bank LCs
and we also offer something called the Financial Institution
Buyer Credit.
This is typically directed towards bulk
agricultural export.
On the exporter side, we have multi-buyer or single-buyer,
also a portion of the buyers that can be covered.
If you have issues or questions with the single-buyer,
you can buy a policy just for that buyer or you can cover all
of your buyers and get a much better rate from us.
Next, we have medium-term financing.
This is where a lot of the Caterpillar equipment fits in.
This is typically used to finance capital equipment.
It requires 15 percent down and can be financed up to 85 percent
of the U.S. portion which I'll get into in a moment.
Typical repayment term is 5 years, exceptionally 7,
here we're talking about 10 million dollars or less.
And we have both insurance
and loan guarantees in this category.
This is also where we finance foreign buyers who wish
to purchase U.S. equipment.
Our long-term financing is where the big Boeing jets
that were mentioned or covered and also
where we do project finance in various sectors.
This is the longer repayment term over 5 years
and 10 million dollars or more in dollar value.
Again, it requires a 15 percent down and we can finance
up to 85 percent of the U.S. content.
We do not offer a long-term insurance policy unlike some
of our other ECA counterparts.
We do, however, offer mostly loan guarantees
and then a few cases, direct loans.
We do have special initiatives that are green initiative
where you can have longer terms
and also finance the interest portion of the equipment
if it's environmentally beneficial.
We have a medical equipment initiative
and we have something called the TCEP, which we established
after September 11, 2001, that gives favorable terms to baggage
and cargo screening equipment at airports for example.
Because we kind of cover both ends of the spectrum,
we cover the big Boeing 747 and the like.
But we also have a special outreach for small business
and as a matter of fact,
you have a 20 percent congressional mandate
for small business coverage.
And by small business for manufacture, we're talking
about 500 or fewer employees in accordance
with SBA's definition.
We do have a few restrictions
because we are a government agency.
But I'd like to point out at this moment
that we are completely self sufficient,
and have returned money to the treasury for the past 5 years.
We cannot finance military exports or military end-users,
except in rare instances.
As I mentioned we have foreign content restrictions
for a small business as long
as there is only 15 percent foreign contact,
we can cover the entire transaction.
But for larger businesses we can only cover the U.S. content
portion, once you go pass that 15 percent.
We have a few restricted countries although we're open
in every continent, you can check our CLS
or Country Limitation Schedule for the updates.
The countries you might imagine
that are off cover include Syria, Iran, Cuba,
Venezuela, and the like.
For the larger transactions, we also do economic impact analysis
to make sure we do no harm to domestic industry.
We have to shift on US flight schedules for our direct loans
and for transaction exceeding a certain size limit
and we must provide additionality.
What I mean by this is that if the private sector can do the
transaction, we want them to do it.
We're not here to compete with private sector,
we want to enhance what they do.
I want to just touch on the 2 markets very briefly in terms
of our activity there.
As indicated, Colombia is not the old Colombia
that you remember it so rebounding
from years of violence.
There's much improved domestic security
and they are implementing very pro-market economic policies.
The internal development plan cost, cost for billions
of dollars in infrastructure.
And we have 5 highlighted sectors from the government, ag,
extractive industries, infrastructure,
housing and innovation.
As mentioned also, the FTA is expected to increase U.S. trade
and create more US jobs of over 80 percent become Duty Free
immediately and the other terrorist or states
out over the next decade.
In terms of Ex-Im Bank exposure,
we started from a relatively low based in 2009,
and now they are this slide is a little bit out of date.
There are second largest markets in Latin American after Mexico.
The projected exposure total is 3.7 billion,
which makes Ecopetrol, the national oil and gas company
in Colombia, one of our single largest exposures.
To get thrill down on this a little bit,
we offer the 1 billion dollar preliminary commitment
to Ecopetrol.
This was then converted into a final commitment,
split between medium term and long term loan guarantees.
We also recently approved the 2.84 billion dollar direct loan,
loan guarantee combination to Reficar which is a subsidiary
of Ecopetrol so we are very bullish on Colombia.
In terms of Panama,
you've already heard how fast the economy is growing,
the GDP growth rate was over 9 percent and is projected
to grow over 6 percent.
I think we've already exceeded
that in the next couple of years.
The demand for high end US products
and services is very high.
And as mentioned, it is a dollar-based economy
which makes it very easy to do business.
Again, the FTA will support US jobs
and enhance our competitiveness.
There are the-- our foreign country competitors,
the current average tariff is around 7 percent,
some go up is high, however, as 81 percent.
And in terms of ag some in very sensitive areas are 260 percent.
But again, these are all due to be phased
out over 80 percent immediately with the remaining
over the following decade.
Here is our contact information,
I have other business development off at Serge,
together with my colleague [inaudible].
I handled the Americas, Europe, and the Caribbean.
We also have global business development officers
for the other regions and a dedicated officer
for medical technology.
Here is our telephone contact information.
I wanted to last put in a plug for our annual conference,
it's being held here in Washington, April 12th and 13th.
We heard on Friday, that Bill Clinton we'll be our keynote
speaker so I encourage you all to come.
If you want information, you can log on to our website, exim.gov
or contact the conference organizer Nikki Shepard
[ phonetic] and the syntax
of the global business development division
is firstname.lastname@exim.gov.
Thank you very much.
>> Thank you Kate.
And now we'll go to our last presenter, John Hyatt,
Vice President Import of Irwin Brown Company.
[ Pause ]
>> Good afternoon everyone.
I'm John Hyatt from New Orleans, stuffed at Mardi Gras
so we're all trying to recover.
Some of the slides, I'm going to pass through very quickly,
because they haven't carried by Dan and Cameron, and also Kate
to some extent but I want to get to the mid of some
of these items which are important.
These agreements well, as you know were signed.
It looks like Korea for instance,
it will be coming on board, March 15.
We're still looking for some input as far as the negotiations
with Colombia and Panama but we feel by the first quarter
of this year, they will all be in placed.
Very quickly, some of the background you can see here,
this is some information that was previously shared
with the other presenters.
Again, what I want to point
out was Panama has significant minerals reserves,
they're developing a large copper mine right now
with the one of the largest deposits in the world,
it provide excellent opportunities,
the U.S. export is at mining equipment and machinery.
Traditionally, and the subway project
that was mentioned earlier which began last year
and it could result in substantial possibilities
for exports of anything involved, and again,
subway production machinery, that sort of thing.
Ongoing enlargement of the Panama Canal locks, again,
it's going to result in reduced to duties and importation
of all sorts of machinery.
These Free Trade Zones, the Colon Zone
and the New Zone being completed on the other side
of the former Howard Air Force Base,
we're going to position Panama significantly to be a platform
for moving major consumer goods for the big box retailers
where it will be an intermediate stop in cooperating U.S. inputs
to basically go from one hemisphere to the other
as quickly as possible,
depending upon what markets are emerging.
Trade and consumer goods has recovered significantly
since the-- our economic meltdown
and the judicial circumstance from 2010.
The U.S. top U.S. imports or consumer goods,
and moved over 2.8 million TEU as seen
from this listings starting
with Walmart going down the Whirlpool.
So, yeah it's a significant factor of the economy.
US exports to Colombia again.
Our large-- Colombia's largest importer of grains,
they also handle a lot of cotton, yarn,
and fabric for the apparel industry.
And I'd like to say apparel Frederick Ross Johnson,
Barbarians of the Gate, you know, any penny sent
down comes back, dressed up as a nickel.
It's always important to remember.
These are some of the key export sectors
that were mentioned previously by both Daniel and Cameron
as significant opportunities in Panama and Colombia.
Again, half of current US farm exports
of Colombia will become Duty Free as with these listings
of the various commodities.
But again, the protracted delay in the approving
for the Gradient of Agreements has meant there was some sliding
back if we've lost 60 percent of the soybean market,
50 percent of the wheat market because of other grievance
that have been signed.
Canada and Colombia's went into a free-trade agreement recently
in August where flour dealers in Colombia will switch
to Canadian grain because of the more favorable price
and of course less competition
between Bombardier of Canada and Boeing.
So, with the trade agreement in place,
it would make us more competitive.
Although 85 percent of the inputs,
the US from both countries sent to Duty Free,
there are protected categories
but with the FTA allowing textiles, waring pro footwear
and flat goods to have incorporated
in term U.S. inputs, and come in Duty Free that allows
for a lot more exports going down.
Agricultural products or Duty Free coming
into the United States anyway but there are a number
of different tropicals that can be marketed at just
as successfully as mango and papaya,
by a number of different methods, you know,
joint marketing, point-of-sales demonstrations,
supermarket promotions, and because of the fact
that the US consumer likes very nice looking fruit,
consistent size, symmetry, color, the opportunity
for the US producers to send in fertilize and agrochemicals
that give both Panama and Colombia the wherewithal
for successful sales in the U.S. is very important.
These are trade agreements
and carriage production sharing which is important.
These countries are in foreign exchange
and in exchange they can go ahead buy U.S. exports.
That's always important to remember.
And many evolving countries don't have the infrastructure
capacity to participate in trade
but these trade agreements do build that capacity,
that's important to remember.
The textile and apparel sector as an engine
of growth is usually the first step toward industrialization
with many of these countries.
And in the old agreements that we had with the Caribbean Base
and et cetera, most of what was handled down in the region
where what they call commodity items, a little fashion applied
to them, that sort of thing.
And, but this is a significant part of the industry,
nearly 400,000 people from the entire workforce are
in these jobs, they're high paying jobs
which give them basically income
to buy US produced consumer goods which is also important.
The US consumer industry going in the lean retailing,
makes the Caribbean and Central America, particularly Panama
and Colombia a lot more attractive
to get a very quick response and put product on the shells
as quickly as possible, and again, using inputs
from the United States to essentially come
in on a Duty Free reduced basis.
Most, you know, retails are looking for a full package
in the apparel industries so the supplies have
to provide all the input, and again, because of trends
in the Far East, and in Asia, it makes the Caribbean,
Central America, Panama,
and Colombia more attractive particularly
with Chinese producers that are more interested in focusing
on internal demands, shipping rates are higher,
India and Pakistan are forcing manufacturers
to meet local demand that export or link production is lessening
for U.S. You know, equally Asian manufacturers are starting
to come in to Central America and set
up full package operation for colon benefit.
U.S. produces of the inputs in the long run
because we're the quickest ones to respond for the market place.
Equally so with Europe, there was a--
with free trade agreement in place that was signed in May
of 2011 which should bring in some of the European producers
of high fashioned goods
which will only benefit again the industry.
The other things when you look at and as far
as the technical considerations of TPAs, FTAs, I want to dwell
in this for a second is
that transparent costumers treatment is part
of the agreement but as far as the determining the eligibility
of good, it's usually backed up by a certificate of origin.
When there's no certificate document form that's been
mandated then the form out of the GSP, Generalized System
of Preferences form A seems the most acceptable
because it has been used by member nations
of both the GATT and the WTO.
They decide [inaudible] and board protection here
in the U.S. no longer mandates presentation
of an original GSP form A. So they have dictated what kind
of a certificate award you should provide.
We're assuming that basically EU model is going to be followed
for US good seeking Duty Free entry in the Panama or Colombia.
And in the way this document usually looks,
it's got a background of a shade
of green not specifically specified, superimposed
on that background is what's called a guilloche.
It's an ornamentation imitating braided or interlaced ribbons.
I've got a sample of this variant of a document
from the old CBCP certificate.
If you notice it's yellowish and tint
but it gives the same indication of what we're talking
about as far
as the documentation that maybe required.
But it may not be just a certificate origin
that will essentially make your good eligible
for a Duty Free entry into Panama or Colombia
because of what may happen in that certificate of origin
of goods coming out of the United States may have component
parts from downstream suppliers and exporters whom they have
to verify the origin view, affidavits by U.S. producers
and many component parts that are incorporated
into the final good just as Customs
of the United States requires those sorts of verifications
for goods coming into the country.
And that basically is my presentation
and I'll turn it back over to the moderator.
>> Thank you very much John.
And now we'll open the queue for voice questions,
if you a voice question, please press star 1
and thank you very much for your written questions.
But if you have a voice question, please press star 1.
[ Silence ]
>> As we're waiting for voice questions, we'll go to some
of the written questions that are in our queue.
Let me start with the question here from Sarah
like Sarah Barnier [phonetic].
Does water sanitation projects get categorized
in a 26 billion infrastructure funding in Colombia?
>> No but it's an excellent question
because that actually is a big market in Colombia.
The infrastructure is pretty much--
it's pretty much broad but it also goes via
to airport modernization as well as the port modernization
and development and bridges.
However, water treatment
in general is a big concern here in Colombia.
They have 2 coasts, and the Caribbean coast is all
about tourism.
In fact the US trade development agency funded money to--
can go into a feasibility study
for a water treatment plant in Cartagena.
So if there-- well there's company
in particular is interested I'm happy to talk to you more
about opportunities in waste water treatment
and in fact we have a market research report
that we just updated on this market.
>> Okay, great.
Anyone else have anything to ask?
Okay. Next question here from-- kind of Esteban Millan.
Their company Millan & Associates is working
with the high-tech green ecofriendly agricultural
products geared towards increasing crop field,
cut flowers, fruits and vegetables preservation.
We are finding that entry of our products
into Colombia are severely restricted by the requirements
of ICA in terms of cost and bureaucracy.
Can someone for example,
our U.S. Ambassador voice this concern?
We could benefit-- how we can benefit from this product?
>> No, honestly big markets marked in here,
agricultural exports although complimentary in U.S. flowers,
coffee, fruits, which is exactly the opposite
of what the US exports do Colombia's good
and obviously the machinery and these green technologies.
We do have an agricultural attache Joe Lopez
at the USEmbassy here at Bogota.
He would be-- I would say the first stop before the ambassador
because he can provide some more insights in the exact programs
that Colombia has implemented whether these will be
liberalized in the free trade agreement.
So [inaudible] It might take me a second
to find his email address, better yet if you can provide
through the host to this Webinar your contact information I will
put in touch with Joe Lopez and you can talk
to him directly about this issue.
>> Okay, great.
Thank you.
I know everyone has a lot of questions
about the PowerPoint presentation slides,
once again you select the down load down and operate inside
of your computer are history of the PowerPoint presentations
like the Ex-Im Bank presentation so it looks like we can get
to you so we will get to that later.
But all the rest of the PowerPoint presentation slides,
you can find by going to the right on the right hand side,
putting your mouse cursor over the 3 pieces of paper
and she's downloading them either to a folder
or to your desktop, but I hope that answer
to everyone's question.
Next question here looks like it's
from Herardo Preia [phonetic], we want to know
which country is better to develop,
a third party warehouse, Colombia or Panama
and this person is in Mexico, Herardo Preia.
>> So this is Dan speaking from Panama, I think when it comes
to 3rd party logistics and staging
and consolidating regionalized inventory, the Atlantic mouth
of the Panama Canal City known as Colon
and it got the world second largest free trade zone.
And if you go to export.gov/panama we've got a--
we've got some content on how advantageous that is for anybody
in the consumer retail space.
Last year they moved about 29 billion dollars and in out of
that Colon free trade zone so there all kinds
of 3rd party logistics providers already there ranging
from the low end kind of stuff that she'd see,
let's say in the Kmart all the way up to stuff you'd see
in the Saks Fifth Avenue and even Marcus as well as the thing
like pharmaceuticals which imply a high degree of security,
high PR intellectual property concerns
in coal chain expiration concerns, all those are met.
Pfizer alone for instance moved 3 billion dollars that billion
with the B through Colon Free zone last year and if you think
about it in terms of staging inventory,
it's inherently an efficient model because it's at the mouth
as I mentioned of the Panama Canal in the Atlantic side
and so looking north you have all the Central American,
those are small economies
and then looking east you have the entire Caribbean
which of course is a collection of violence.
So you don't want to replicate inventory and all those places,
you want to consolidate it for regional distribution
and increasingly what we're seeing they're taking that model
which already reach critical mass and they're extending it
as far as Brazil which would have really surprised me
because Brazil I would have thought would have justified
zone [phonetic] inventory model.
So it's an-- it's an area that's growing rapidly
and I've certainly welcome you coming down and taking a look.
>> Thank you Dan.
And from Herardo again another question is
that he distributes hazmat products, you know,
if there are benefits and terrorist for this kind
of products in both Colombia and Panama.
>> I don't have the VHS code encyclopedia
and in my head I'm afraid so that's--
Cameron mentioned the FTA terrorist tool
and that's got a nice look
up where you'd say it was you'd really tighten the details
of the material key word search VHS codes will pop up,
you confirm that VHS code and then you run
in through the [inaudible]
to see what the duties are now potentially
and what they would be under FTA.
[ Pause ]
>> Great, well, that's all the written questions I have
right now.
Let's go to the operator to handle the any voice questions
>> And there are no question on the phone line
>> Okay, we'll see okay we'll go back the written queue
and see are the queue to see
if we have any more written questions,
it looks like a couple came in.
Okay, question here from Dizzy Jordanov [phonetic].
Although there is no direct link between a free trade agreement
and foreign direst investment in the UST, any benefits
to the dynamic and increase and FTI from Colombia in Panama
in the U.S. and then what industry?
>> Yeah, I'll start with Colombia
and we're seeing more Colombian companies investing
in United States.
In fact Colombia has-- I forget the exact number but it's
like the fourth largest cement manufacture
in United Sates doing investment,
one of its largest dairy, the Alpina has invested heavily
in the Northeast of the United States and we're seeing more
and more of this, so obviously the benefit is the creation
of U.S. job since we-- the United States is in very active
to select USA program ongoing
to retract foreign direct investment to the United States
and commercial service, they're active in terms
of promoting foreign direct investment in the United States.
We work with all the states to do this
and of course the goal is really do increase in planning
so it's got huge advantages,
and I think that the FTA will just increase the visibility
of United States in the eye of Colombian investors.
Dan, is there anything you need to add?
>> This is Dan from Panama, one thing I would say is
that an FTA, I mentioned this earlier
but it's worth I think saying again,
it's kind of like a good house keeping seal of approval.
When company in all country want
to attract more foreign direct investment and they go out
and they do the road shows and they try to get companies
to invest and that, that is good for US exporters, why?
Because we see exports follow foreign direct investment,
I mean that, that's a given it's a clear causal effect.
But if just one on the quiver of tools for instance in Casa,
Guatemala and Honduras, they had some other problems
for instance security and as a result they may not have seen
as much foreign direct investment in the past years.
So it's just one of a number of tools like a stable, political
and economic environment,
relatively safe environment their companies look
at when they're deciding in which country to invest.
Panama certainly a very aggressively marketed FTA has a
good housekeeping seal of approval.
But really they've been able to tracked a lot
of foreign direct investment
because of those other attributes that I mentioned.
>> Okay, great.
Thanks, Cameron and thanks Dan.
I believe that's all the questions we have one last time.
>> I do have questions on the phone right now.
>> Okay, great
>> Thank you.
First one is from Esteban, your line is open.
>> Yes, good afternoon.
This is Esteban Millan with Milan & Associates.
We've basically created, you know,
a small Colombo-American Company
to basically pursue these new opportunities.
We did that in 2009 when the FTA with Colombia was still,
you know, being considered and so forth.
Anyway, and we've very excited, you know a lot
of our customers are getting or will begin to give
in 2013 a 15 percent break in the imports of some of the,
you know, high tech materials.
You know, [inaudible] FTA, there is something that is a concern
to us which is-- for example,
as one of your presenters mentioned,
Colombia has increased their level
of standards significantly.
So, meaning that if they have, you know, electrical components
and so forth of the manufacture, they are to import,
the they are-- they subjected to the UL,
Underwriters Laboratories standards
which is something fantastic.
And then they have the sectors of industries.
However, they went a little bit too far because they created--
let's say for the high temperature wire and cables
that we export to Colombia, we have sold to Reficar
which is a portion, is one of the Ecopetrol arms
which is the refinery in Cartagena.
But then they created an agency that is called "REPI"
which is R-E-P-I, which is basically some sort
of certification agency for products, electrical products.
But here's the problem is that, you know,
the United States has one of the highest standards,
highly recognizable wide.
And we have in UL standard for wire and cable and then
when we send them to Colombia,
they have to be subjected to this REPI test.
Problem is that, these cables that we're sending
down there are cables that are not manufactured
in Colombia nor anywhere else in South America than we know off.
Because you are there, you know they're very
specialized products.
However, they want to test them
and approve them even though they don't even know what kind
of products they are.
So, you know, to go straight to a point will--
we'll be very interested
in having Colombia grandfather the U.S. standards
for certain products that are, you know,
above and beyond what the standards are let's say
in Colombia or Panama, I mean, we're not trying to be,
you know, obnoxious or pretend that we are the best but,
you know, therefor, these products created this sort
of certification and they can pass any test.
However, because of that, they discourage, you know,
the approval or slowdown--
slowdown the approval in the dispatch
in increases significance with a cost,
it feels like an additional tax, is a hidden tax
that we have been faced with.
The same thing happens with the agrochemical compounds.
We have to deal with the ICA,
it's the Instituto Colombiano de Agricultura and where they are,
you know, here our products are approved by the EPA and the FTA,
down there, they want to have some sort
of approval certification that is many times, like three times
that we paid for a certificate here in the United States.
So that's our concern, is something that, you know,
I don't know how to go about it.
It seems like, you know, it's a larger issue, but nevertheless,
is a hidden tax that we've been faced with that, you know,
our Colombian competitors are no faced with.
And, I just want to put that out there.
>> John Hyatt over Brown Company.
What you've mentioned this basically should be covered
in the dispute resolution sections of the agreement
which allow basically equal treatment of products,
and I think on the dispute resolution, this kind of issues
as far as additional testing or, you know,
going through some other agency and paying additional fees
for something that's accepted as, you know,
good in the united States, under UL or, you know, under our EPA,
I think that's where the issue should be
in the dispute resolution process, but again,
until the agreement is actually enforce,
I'm not sure whether we can go through this, you know?
Basically, we feel it by the first,
end of the first quarter this year,
this both of the agreements would be in place
and then those kind of divisions can be addressed.
>> I appreciated your answer.
Thank you very much.
>> Now this is Kevin Orca [phonetic], I would add that,
you know big difference bring a national standard
and some [inaudible] so I'm unclear to whether
in the first instance you talked about was Reficar specifics
or was a Colombian national standards so that would be
if it's Reficar specific there's nothing
that free trade agreement can do about that
because that would be an individual company.
> No, no, actually Reficar waived that because they're part
of the government or at the time they were,
is a Colombian National Certificate and we didn't have
to deal with that in-- with Reficar.
We don't have problems with these agencies
because they can wave their own rules.
However, when we go to distributors and we want
to reach out to let's say, you know, the--
and I'm thinking about the iron and steel mills--
>> Well, let me have-- let me just--
let me just stop you there.
I know that this is getting, maybe it's a little too specific
for everybody else in the call, and I would advice
that from your concern they reach
out in the United States trade representative.
And if there are national standards and you think are none
that are becoming barriers to trade and you can raise
that with them and they can address it
in a technical implementation phase
and maybe avoid the problem in them before it's implemented.
They are the government--
U.S. government agency that is responsible
for negotiating the implementation.
And even ties this issues that they are interested in hearing
about so they can address them before it's too late.
>> Okay, thank you very much, I appreciate your time.
>> No.
>> And we have questions from Carlos, your line is open.
>> Yes, hello!
My name is Carlos Schwarz [phonetic] and I'm
with Global Bas [phonetic] Enterprises, and my question is
under the FTA, are we going to be able to export used vehicles
into Colombia and Panama?
>> It depends, this is Cameron in Colombia.
It will depend on the type of vehicle.
If you're talking about consumer passenger vehicle, heavy trucks,
buses, what kind of vehicle?
>> Yeah, it's a regular four door vehicle,
the commercial vehicles that's used as well as motorcycles?
>> This is Dan from Panama, the devil is always on the details,
this is the kind of stuff and the content
of origin was discussed earlier and that's still applies.
For instance, you can't, you know, bring in a car from Korea
and have it, the 2 month's old and then re-export
and expect to have FTA apply.
So if there's a bit of a trick there,
but in general the used cars market at least
for Panama is already pretty robust, there's that,
there's that, there's decent number of imports
of used vehicles as well as new vehicles so,
no reason to suspect that, that would continue under FTA.
>> Now, we've seen that ourselves, John Hyatt here,
we've handled a number of exports of used vehicles
to Panama on a weekly basis
so it is a thriving market that I agree.
>> Okay, well, I thank you so much.
>> There are no other calls, questions on the line.
>> Okay, we do have a really, another good question here
from Aaron Bard [phonetic].
This will be our last question 'cause I know we're going a
little bit over time.
Seeing the manufacturer of the medical product,
are there specific regulatory requirements or restriction
to your respective countries different or above
and beyond U.S. requirement.
And are there any other specific medical product requirements
that you feel are important to mention?
>> This is Dan in Panama and I, I hate to keep on saying this
that the devil is in the details,
there are regulations here in Panama
that even apply not just the public purchases
of medical equipment but also apply
to private hospitals any disposable
of medial waste for instance.
And those are regulation that we don't even necessarily agree
with, and we're actually working actively to see
that they don't prohibit entrance of U.S. competitors
and the medical equipment space.
So the bottom line is that you probably should reach
out to Cameron and to me separately
so that we can get some more detail on the product
that you're-- that you'd like to sell here
and we can find out more for you.
>> One other point I should, John Hyatt here,
if this is an FTA medical device, the procedure
for getting a medical device approved by FTA is very onerous
so it is approved by FTA and it should be a simple matter
to go to that country.
>> Okay, great, great, thank you very much.
Everyone, I'm afraid that it is all the time we have.
Remember the question we didn't answer, you know,
you can please email us, you can e-mail me Linda.
Abbruzzese@ trade.gov.
I can distribute it to our speakers.
Also please check out the commercial services website
at www.export.gov, for more upcoming event and webinars.
Thank you to Dan, Cameron, David, Kate,
and John for your excellent presentation.
And thanks again to all of our participants
for joining in this webinar.
Thank you every body and good bye.
>> This concludes today's conference, you may disconnected
at this time, thank you.
>> are we left?