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	The ABCs of Trade Do you know your ABC's? Virginia businesses should know that Argentina, Brazil, and Chile offer a wealth of export opportunities! The past several years have seen impressive economic growth in South America's "ABC" countries, led primarily by high world commodity prices and governments that are focused on foreign investment and macroeconomic stability. If your company is not doing business in any of these three countries, it may be time to review your ABC's. ARGENTINA Argentina's weak currency is boosting exports and helping its economy emerge from recession. With the recent debt crisis resolved, investment and relative stability are returning. Argentina's economy grew an estimated 9% in 2004, led by agricultural exports. Like Brazil and Chile, Argentina has benefited from growing trade and investment with China. The United States has also increased trade with Argentina, with exports in 2004 valued at US$ 3.38 billion, a 39% increase over 2003. Exports via Virginia to Argentina in 2004 were also robust at US$ 38.91 million, a 31% increase over 2003. Argentina is a major importer of machinery and equipment, motor vehicles, chemicals, metals, and plastics. In 2004, plastics were the top export to Argentina via Virginia and were valued at $8.19 million. Exports of fertilizers followed at $7.12 million. Pharmaceuticals came in third at $4.72 million and were led by medicines and vaccines. The tech sector is strong in Argentina and has attracted leading companies like Motorola, IBM, and NEC. The combination of an educated workforce and competitive wages has made cities like Buenos Aires and Córdoba attractive locations for software development centers and technology campuses. Wages for computer programmers in Argentina have become competitive with India but, unlike India, Argentina is in the same time zone as the eastern United States. Deregulation of the telecom industry in Argentina has resulted in thousands of miles of fiber-optic cable across the country, further facilitating business operations. With the current administration of President Néstor Kirchner actively courting foreign investment and trade, Virginia businesses will find ample opportunities to increase their sales in Argentina. BRAZIL Brazil's economy grew an estimated 5.2% in 2004, the strongest growth rate the country has seen in more than a decade. The Brazilian currency, the real, which was devalued in 1999, has been a boon for Brazilian exporters and has driven the economic recovery. In fact, due to the large volume of exports, 2004 was a record year for Brazil's trade surplus, which finished the year at US$ 33.7 billion. Further bolstering the economic recovery has been a tight fiscal policy exercised by President Lula's administration. Fiscal discipline has allowed the government to run a budget surplus to service its debt, which in turn has bolstered investor confidence. Brazil is a land of abundant natural resources and is striving to become the world's breadbasket through agriculture exports. Resources include 8.3 billion barrels of proven oil reserves, the world's largest iron ore deposits, and a strong ethanol industry that takes advantage of the country's vast supply of sugarcane. U.S. exports to Brazil in 2004 were valued at $13.86 billion, an increase of almost 25% over 2003. Exports via Virginia to Brazil in 2004 held steady at $208.16 million, with mineral fuel/oil (mainly bituminous coal), valued at $70.28 million, being the top export commodity for the third consecutive year. Fertilizers were valued at $34.18 million, and were used to support Brazil's strong agricultural sector. Industrial machinery was the third largest category in 2004, valued at $17.20 million, and included products such as compressors used in refrigeration, parts for metal-working, hydraulic presses, and machinery for forging, bending, and stamping. Plastics were valued at $14 million and included products such as plastic plates, sheets, and film at $6.06 million. Brazil, the largest and most dynamic IT market in Latin America, also showed the strongest signs of improved IT spending in 2004. It is estimated that sales of American software products in Brazil will top US$ 5 billion in 2005. Brazilian imports of IT products in 2004 reached US$12.5 billion, with the U.S. supplying 57% of Brazil's imported computer hardware components. Imports of electronic subcomponents increased 63% in 2004, and the growing production of cell phones in the free trade zone of Manaus will keep demand strong in this sector. CHILE Chile's economy is arguably the most market-driven in Latin America. The country's GDP growth rate in 2003 measured a strong 3.4% and an estimated 6.1% in 2004. High prices for copper -Chile's top export- over the last several years have helped to maintain Chile's overall trade surplus. Trade between Chile and the United States is certain to grow with the signing of a free trade agreement between the two nations. Effective January 1, 2004, more than 85% of two way trade in consumer and industrial goods became duty free. Duties on other products will gradually be phased out over a 12 year period. U.S. exports to Chile were up almost 35% in 2004. Exports to Chile via Virginia in the same year were valued at $31.61 million, and were led by industrial machinery, valued at $10.06 million. Roughly half of that sector was comprised of machinery parts for mining, boring and sinking. The second largest export category was vehicles/not railway, valued at $6 million, and was dominated by commercial and industrial trucks. The third largest export category was plastics at $3 million, with such products as plastic sheet/film and tableware. Electrical machinery was another strong export sector in 2004, valued at $1.8 million. Chile continues to attract foreign investment from the United States in IT and other sectors. Growth in sales of computers and peripherals in 2004 is projected to continue in 2005, due in part to 0% import tariffs and a more competitive Chilean peso. Chile's total IT spending in 2004 totaled over US$ 1 billion, with computer hardware sales of US$ 521 million. The U.S. - Chile Free Trade Agreement will give IT services in Chile a boost by guaranteeing non-discriminatory access for U.S. service providers. EASY AS 1,2,3 Your ABCs are as easy as 1,2,3 when your company participates in Virginia's trade mission to Argentina, Brazil, and Chile in March 2006. The Virginia Economic Development Partnership-Division of International Trade has an office in São Paulo, Brazil, and a history of successful trade missions to the region. The Brazil office is staffed by a local, international trade professional who is eager to assist with matchmaking for Virginia businesses. This will give Virginia companies interested in the South American market a unique competitive advantage and the opportunity to expand their business in that part of the world. The mission will start in Chile and continue on to Argentina and Brazil. Trade mission participants will enjoy one-on-one meetings with targeted, pre-screened companies that match their unique company and market objectives. Participants will travel with Virginia's South American Representative and will benefit from his local connections and expertise. The VEDP will provide pre-arranged meeting rooms, in-country transportation, translation assistance, market briefings and networking functions.