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	You Don't Need to go "Overseas" to Find Markets for Your Products. Just Head South of the Border and Give Your Exports Some Latin Flavor! 2005 has been a good year for many Latin American economies, and trade opportunities for Virginia businesses in the region have never been better. As trading partners, Latin American countries offer many comparative advantages over other regions of the world. Most countries, particularly Mexico, are within relatively close proximity to the United States. Also, since Latin America covers more longitude than latitude, the majority of countries in Central America, South America, and the Caribbean are in similar time zones as North America. An extensive history of trade further facilitates transactions with Latin American countries. Perhaps most importantly, the United States has negotiated several free trade agreements (FTA) in this hemisphere -including NAFTA, CAFTA, and the possibility of a forthcoming FTA with several Andean nations- that have substantially reduced or eliminated tariffs on many U.S. exports. Confidence in Mexico's economic stability and its financial markets has soared over the last year. The Mexican stock market closed at a record high this month, with blue chips such as Cemex, América Móvil, and Telmex driving the rally. Mexico continues to be the United States top trading partner, second only to Canada. The U.S. sold over $110 billion worth of goods to its southern neighbor in 2004, a 14% increase over 2003. Electrical and industrial machinery have been the top U.S. exports to Mexico, totaling over $40 billion in 2004. Circuits, switches, cables, and parts for TV, video, and radar topped the electrical machinery sector. The strongest sub-sectors in industrial equipment included office machine parts, computers and peripherals, engines, pumps, compressors, and valves. Other U.S. exports that have been in high demand in Mexico are plastics, optical/medical instruments, organic chemicals, and iron and steel products such as bolts, springs, tubes, and tanks. With estimated economic growth of 3% in 2005 and a predicted economic expansion of 3.5% in 2006, Mexico's growing economy will likely mean growing demand for imports from the U.S. The other economic giant in Latin America -Brazil- has been among the top 15 export destinations for U.S. companies for the past decade, and saw booming investment and economic activity in 2004, thanks to macroeconomic policies that have promoted stability and investor confidence. Like Mexico, Brazil's stock market has seen unprecedented activity over the last year. The Bovespa -Brazil's main stock index- gained over 25% in local currency terms during 2005 (equivalent to over 40% in dollar terms), and closed at a record high earlier this month. Foreign funds have been investing in Brazilian blue chip companies on the expectation of declining interest rates in Brazil and projected economic growth of 3.5% in 2006. As further evidence of the Brazilian government's commitment to fiscal discipline, Brazil no longer has debt obligations with the International Monetary Fund after having paid all of its debts ahead of schedule. Brazil imported almost $14 billion of U.S. products in 2004, an annual increase of almost 25%. Electrical and industrial machinery, and parts for aircraft/spacecrafts were the top U.S. exports. Brazilian imports from the U.S. included gas turbines, office machine parts, computers and peripherals, and engine parts. As Brazil continues to increase its production of oil, which hit record highs in 2005 of almost 2 million barrels per day, significant opportunities exist for Virginia companies that supply industrial machinery parts and equipment to the petroleum sector. Another strong sales opportunity lies in Brazil's strong aviation sector, which is dominated by EMBRAER, the world's fourth largest jet manufacturer. Other U.S. commodities that Brazil imports in significant volume and dollar value include chemicals, plastics, fertilizers, and pharmaceutical products. Another South American country, Chile, is a relatively small nation but is heavily dependant on trade and has been one of the U.S.' top 30 trading partners over the last 5 years, buying over $3.5 billion of U.S. products in 2004. Chile's economy is one of the most open and market-friendly in Latin America, and its commodity exports, particularly copper, have been soaring due to high demand from countries like China. The mining sector offers vast opportunities to Virginia companies that manufacture machinery and equipment for this sector. Top U.S. exports to Chile in the industrial machinery sector are parts for derricks, boring, sinking, fork lifts, pulleys, elevators, and blades for dozers. In the Caribbean region, the Dominican Republic is the largest consumer of U.S. exports, and imported almost $4.5 billion of U.S. goods in 2004. Due to the strong textile industry on this Caribbean island, knit apparel and cotton & yarn fabrics were the top U.S. exports to the Dominican Republic in 2004, behind electrical machinery. Among the top U.S. exports in the electrical machinery sector are apparatus for switches, line telephony, radio, television, camera, and circuits and microassemblies. The impending implementation of the Caribbean Free Trade Agreement (CAFTA) will undoubtedly open up even more markets for Virginia's exports in the region, especially the Dominican Republic. The Virginia Economic Development Partnership can help Virginia businesses find new markets in Latin America and achieve their export goals. In March of this year, the VEDP will be leading a trade mission to Argentina, Brazil, and Chile. 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. 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. So what are you waiting for? Spice up your exports by heading south of the border!