Latin America Opportunities abound for US Businesses
As a global outreach firm, Auerbach International is both a premier language agency and a world marketing consultancy (research, strategies, cultures and skills to penetrate overseas markets). This article sheds some light on opportunities to help you expand your business.
Eager buyers of US products
Did you know that there is an entire continent eager to buy US goods and services right next to you?
According to the US Census Bureau, the US has kept a positive trade balance with South and Central American countries for many years. This means the region buys more goods and services from the US than they sell to it. What’s more, American exports to the region have grown 8% per year, for the past 30 years!
The top ten US exports to South America are auto parts, medical equipment and supplies, paper and wood pulp, fabrics, and chemicals, plastics and resins. However, opportunities are not limited to these industries and the right partner can help you identify potential buyers regardless of the business you are in.
Latin American countries are not just attractive export markets; they can offer great opportunities for investment as well. Several Latin American countries feature in the United Nations Conference on Trade and Development’s ranking of most profitable destinations for foreign investments, with returns ranging from 12 to 27%.
Unlike many other countries such as Nigeria, Angola or Kazakhstan that also feature in the list, Latin American countries are quite safe, their people are friendly towards North Americans, they operate in essentially the same time zones, and are just a short flight away.
Keys to Achieving Latin America Business Goals
Understand the diversity
“Latin America” doesn’t really exist as a single, homogenous entity. Latin America begins south of the US at the border with Mexico and extends all the way down to the southern tip of the continent where Argentina and Chile share a border close to Antarctica.
Latin America and Caribbean region consist of 33 countries. And while most share a common history and cultural institutions, they have significant differences in economic development, ethnic composition, cuisine, cultures and attitudes. Don’t assume that everyone eats tacos and tortillas, as this can come off as silly, or taken as offensive.
In some countries, such as Argentina, showing off and being aggressive and vocal about your achievements is the norm. In other countries, modesty is more highly valued. You will need to adapt your message and your behavior accordingly.
Adapt your language to the local dialect
There are substantial differences between the Spanish as spoken in Spain and the Latin American dialects. For instance, the verb “coger” is extremely common in everyday European Spanish and means “to take” or “to grab”. The same word in Latin America means “to fuck”. The potential for misunderstanding or embarrassment is obvious.
In addition to the differences between European and Latin American Spanish, each country in Latin America speaks its own variety of Spanish and the differences can be substantial. For instance, in Mexico the usual 2nd person pronoun (i.e. “you”) is “tú”, while countries in both Central America (Guatemala, Honduras) and South America (Argentina, Paraguay) use a completely different one (“vos”). In these countries, the use of “tú” can sound awkward and artificial. How would you react to a sales pitch that addressed you as “thou” or “thee”?
The story with pronouns does not end there. In Spain, the most common 2nd person plural pronoun (i.e. “you” when addressing more than one person”) is “vosotros”. That word is not used at all in Latin America, and “ustedes” is preferred across all countries, regardless of whether the singular version is “tú” or “vos”.
Find the right partner
Institutions tend to be weak across Latin America, and this applies to both the government and corporate sectors. Official channels can be very ineffective, while personal relationships can work like magic.
Latin Americans rely heavily on interpersonal relationships, and finding the right people is the best way to achieve anything. It helps a lot when you are being introduced by a mutual acquaintance or someone respected by your counterpart, as Latin Americans prefer to do business with those they know and trust.
Auerbach International’s professionals have an extensive contact network that includes senior executives and respected businessmen in all the major Latin American markets, as well as the business knowledge and cultural sensitivity required to help you achieve your goals. Please contact us to discuss them.
About the Author
David Gonzalez is an expert in international business and investment. He has worked in the US and Latin America. He has experience in Agriculture, Health Foods, Oil & Gas, Telecoms and Real Estate. David is a former Fulbright Scholar and he holds an MBA in Finance and Global Management from Emory University. You can contact him through Auerbach International.