Business Development Mission to Brazil, Uruguay, Argentina and Chile

DEPARTMENT OF COMMERCE

International Trade Administration

Business Development Mission to Brazil, Uruguay, Argentina and

Chile

Agency: International Trade Administration, Department of Commerce.

Action: Notice of business development mission to Brazil, Uruguay,

Argentina and Chile.

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Summary: This notice serves to inform the public of a Secretarial

Business Development Mission to Brazil, Uruguay, Argentina and Chile,

February 13-21, 2000, and of the opportunity to apply for participation

in the mission; sets forth objectives, procedures and participation

criteria for the mission; and requests applications.

Dates: Applications should be submitted to Lucie Naphin by December 27,

1999, in order to ensure sufficient time to obtain in-country

appointments for applicants selected to participate in the mission.

Applications received after that date will be considered only if space

and scheduling constraints permit. Recruitment and selection of private

sector participants will be conducted according to the Statement of

Policy Governing Department of Commerce Overseas Trade Missions

announced by Secretary Daley on March 3, 1997.

Addresses: Request for and submission of applications--Applications are

available from Lucie Naphin, Director, Office of Business Liaison, at

(202) 482-1360 or via facsimile at (202) 482-4054. Numbers listed in

this notice are not toll-free. An original and two copies of the

required application materials should be sent to Ms. Naphin.

Applications sent by facsimile must be immediately followed by

submission of the original application to Ms. Naphin at the following

address: Office of Business Liaison, Room 5062, U.S. Department of

Commerce, 14th Street and Constitution Ave., NW, Washington, DC 20230.

For Further Information Contact: Lucie Naphin, Director of the Office

of Business Liaison, or Jennifer Andberg at (202) 482-1360. Information

is also available via the International Trade Administration's (ITA)

website at: http://www.ita.doc.gov/doctm.

Supplementary Information:

Description of the Mission

Secretary of Commerce William M. Daley will travel to Brazil,

Uruguay, Argentina and Chile as head of a senior-level business

development mission focused on three key growth sectors--information

and communications technology, environment and energy. Brazil, Uruguay

and Argentina, together with Paraguay, form Mercosur, the acronym in

Spanish for the Southern Common Market, the world's fourth largest

economic area, a customs union with a population in excess of 200

million people and a combined GDP of approximately $1 trillion. Chile,

along with Bolivia, is an associate member of Mercosur.

The mission will visit Brasilia, Sao Paulo, Montevideo, Buenos

Aires and Santiago. The overall focus of the trip will be commercial

opportunities for U.S. companies, including joint ventures, presented

by the continuing market liberalization and privatizations within

Mercosur. In each country, briefings and matchmaking business

appointments will be arranged for members of the business delegation in

order that they may take full advantage of the commercial opportunities

available to firms in these key South American markets. Individual

country briefings will include local public and private sector

officials to discuss developments in the country that affect the

commercial environment.

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Commercial Setting for the Mission

Participants in the mission will be drawn from, but not limited to,

the following sectors:

Information and Communications Technology: Brazil is Latin

America's most important telecommunications market for U.S. companies.

U.S. companies' telecommunications exports to Argentina totaled $461.4

million in 1997--nearly doubling the 1996 total of $238 million. Chile

is the most advanced telecommunications market in Latin America. A 20-

25 percent annual growth rate is predicted within Chile for the next

five years, with investments projected at $700 million annually.

Environment: Brazil is the largest environmental

technologies market in South America, totaling an estimated $3.65

billion for 1997, with growth projections for equipment sales ranging

from 8-10 percent per year over the next five years. Argentina is the

second largest environmental technologies market in South America,

totaling an estimated $885 million for 1998. Over the last five years,

investment in the environmental sector has doubled. The Chilean

environmental market totaled approximately $460 million in 1997 and is

expected to grow by between 8 and 10 percent through 2000.

Energy: Brazil is expected to make annual investments of

$8 billion over the next five years to meet its rapidly increasing

energy demand. Argentine electricity planners expect consumption to

continue to grow 5 percent annually for the next decade with investment

opportunities in natural gas combined cycle power generation plants,

transmission and distribution networks. Chile's electricity demand--

over 29,000 GWh in 1998--is averaging 7 percent annual growth. Natural

gas, coal-fired and hydro power plants totaling 3,500 MW of generating

capacity are currently under construction or planned and offer

potential investment and trade opportunities.

Mercosur

Mercosur encompasses 50 percent of Latin America's Gross Domestic

Product, 43 percent of its population, 59 percent of its total

landmass, 50 percent of its industrial production and intra-regional

trade and 33 percent of total Latin American foreign trade. Its

nations' per capita income is 30 percent higher than that of Latin

America as a whole.

Reforms implemented by the individual countries have produced

impressive growth rates. The strong GDP growth recorded by the region

in the 1990s has been underpinned by a surge in foreign trade and

direct investment. Since 1990, U.S. export sales to the rest of Latin

America and the Caribbean have increased 150 percent, and by almost 250

percent to the countries of Mercosur, reaching $22.4 billion in 1998.

U.S. investments within the Mercosur region have increased

dramatically during the 1990s, reaching a total of $40 billion by 1998.

U.S. companies have invested in a broad range of sectors from

transportation infrastructure and national utilities, to mining and

industry, to services and agriculture. In Brazil, U.S. investment now

exceeds $38 billion, to the point where the United States is Brazil's

largest investor, accounting for one-third of total foreign investment.

In fact, Brazil is home to more U.S. direct investment than Mexico.

However, even before the global financial crisis hit Brazil and led

to its January 1999 devaluation, a general slowdown in Brazil and the

other Mercosur economics was causing U.S. exports to slump. U.S.

exports to Mercosur declined by 3.4 percent, falling by almost $800

million in 1998, compared to 1997. Even so, our trade is still

substantial. U.S. exports to Mercosur last year exceeded $22.4 billion,

ranking the region as our 6th largest export market.

The slowdown is clearly visible in U.S. trade performance.

Excluding Mexico, 1998 marked the first time since 1986 that our total

trade with Latin America declined, with our exports to the region flat

and imports falling. For the year, U.S. exports to Brazil declined 5

percent; to Chile by 9 percent; and virtually all other countries

within the region showed a reversal from recent double-digit export

growth. Our balance-of-trade has decreased dramatically during the

first 9 months of 1999 when compared with the same period last year.

Fortunately, recent reports indicate that the Latin downturn may be

short lived, with growth returning to many of the countries in the year

2000.

Already Brazil has evidenced signs of a more rapid than expected

recovery following its January devaluation. The government of Brazil is

forecasting an overall trade surplus in 1999. Interest rates remain

high, but they are far lower than the levels seen last fall and winter.

Brazil has been lowering rates steadily since March. Most observers

predict that positive growth will resume by the end of the year.

Several important sectors, such as transportation, telecommunications

and agriculture, have continued to grow even during the recession.

Positive Brazilian growth should have a salutary effect, both on

overall regional economic prospects and for a rebound in U.S. exports

and investment. Brazil, after all, is the largest economy in Latin

America, the 9th largest in the world and our largest South American

trading partner. Its gross national product is nearly equal to that of

the rest of South America combined. It is also a key market for Latin

nations, particularly within the southern cone. Indeed, Argentina, the

second largest economy in South America, sends roughly 30 percent of

its exports to Brazil and has been severely affected by the Brazilian

recession.

The continuing recovery in Asia should provide an impetus for

growth in other Latin countries. Chile is but one example. Mired in a

recession for much of the past year caused by declining world prices

for its primary export commodity--copper--and the contraction of Asian

markets which account for almost 30 percent of Chilean exports, Chile

has nonetheless appeared to weather the worst of its economic storm.

Business confidence is returning and the longer term outlook for

Chile's economy is positive. Export commodity prices are recovering,

and after a year of very low or zero growth in 1999, the government of

Chile expects a rebound to 5.5 percent growth in 2000.

Goals for the Mission

The mission will further both U.S. commercial policy objectives and

advance specific business interests. It is aimed at:

Introducing American companies to Mercosur and promoting

expanded commercial opportunities in Mercosur;

Advocating on behalf of U.S. firms already active in

Mercosur;

Resolving market access issues for U.S. companies in

Mercosur, particularly in light of Mercosur's integration efforts, both

internally and with other markets; and

Advancing U.S. economic/commercial policy objectives in

the FTAA negotiations, particularly as it will allow the Secretary to

engage Argentine officials in a timely discussion of their FTAA goals,

as they will have the Chairmanship of the FTAA process. The Secretary

and participating U.S. companies will be among the first high-level

U.S. officials to interact with the newly elected governments in

Argentina, Uruguay and Chile.

Scenario for the Mission

Briefings and matchmaking business appointments will be made for

members of the business delegation in Brazil,

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Uruguay, Argentina and Chile. In Mercosur, the business of the mission

will consist of:

Embassy briefings on the economic/commercial climates;

Meetings with Ministers and other senior level government

officials with responsibilities for the mission's focus sectors;

Meetings with potential buyers, agents/distributors and

partners.

Meetings with the U.S. business community.

The Commerce Department's U.S. and Foreign Commercial Service will

provide logistical support for these activities at each stop.

The trip itinerary will be as follows:

February 13 (Sun): Brasilia

February 14 (Mon): Brasilia--Depart Brasilia for Sao Paulo; Arrive Sao

Paulo

February 15 (Tue): Sao Paulo

February 16 (Wed): Depart Sao Paulo for Montevideo; Arrive Montevideo

February 17 (Thu): Depart Montevideo for Buenos Aires; Arrive Buenos

Aires

February 18 (Fri): Buenos Aires

February 19 (Sat): Buenos Aires

February 20 (Sun): Depart Buenos Aires for Santiago--Arrive Santiago

February 21 (Mon): Santiago--Depart Santiago for Washington, D.C.

February 22 (Tues): Arrive Washington, D.C.

Criteria for Participation of Companies

The recruitment and selection of private sector participants in the

mission will be conducted according to the Statement of Policy

governing Department of Commerce-led trade missions announced by

Secretary Daley on March 3, 1997. Companies will be selected according

to the criteria set out below. Approximately 12-15 companies will be

selected.

Eligibility

Participating companies must be incorporated in the United States.

A company is eligible to participate only if the products and/or

services that it will promote on the mission (a) are manufactured or

produced in the United States; or (b) if manufactured or produced

outside the United States, are marketed under the name of a U.S. firm

and have U.S. content representing at least 51 percent of the value of

the finished good or service. (At the discretion of the Department,

which will generally be exercised on a sector-by-sector basis, the 51

percent U.S. content requirement may be modified or waived.)

Selection Criteria

Company participation will be determined on the basis of:

Level of seniority of designated company representatives

and its appropriateness to the mission objectives;

Consistency of company's goals with the scope and desired

outcome of the mission as described herein;

Relevance of a company's business line to the plan for the

mission;

Past, present and prospective business activity in Latin

America, and particularly Brazil, Uruguay, Argentina and Chile, as

applicable; and

Diversity of company size, type, location, demographics

and traditional under-representation in business.

In addition, the Department may consider whether the companies'

overall business objectives, including those of any U.S. or overseas

affiliates, are fully consistent with the missions' foreign and

commercial policy objectives.

An applicant's partisan political activities (including political

contributions) are irrelevant to the selection process.

Time Frame for Applications

Applications for the trade mission to Brazil, Uruguay, Argentina

and Chile will be made available beginning on or about Monday, November

22. The fees to participate in the mission have not yet been

determined. The fees will not cover travel or lodging expenses. For

additional information on the trade missions or to obtain an

application, business persons should be referred to Lucie Naphin,

Director of the Office of Business Liaison, or Jennifer Andberg at 202-

482-1360. Applications should be submitted to Lucie Naphin by December

27, 1999, in order to ensure sufficient time to obtain in-country

appointments for applicants selected to participate in the mission.

Applications received after that date will be considered only if space

and scheduling constraints permit.

Authority: 15 U.S.C. 1512.

Dated: November 17, 1999.

Walter M. Bastian,

Director, Office of Latin America and the Caribbean, International

Trade Administration, Department of Commerce.

[FR Doc. 99-30380 Filed 11-19-99; 8:45 am]

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