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For years the question has been asked, why doesn’t Jamaica export more to Latin America and look to it as a neighbouring trading block?

There have been attempts to act upon a more robust Americas trading entity but many have ended in miserable failures, invariably politics and regional infighting strangling any significant progress. 

The abandonment of the Free Trade Area of the Americas (FTAA) in 2005 and the late President of Venezuela, Hugo Chavez’s PetroCaribe Agreement are examples of unfulfilled promises.

In 2019, Caricom exported US$2.2 billion worth of goods to 20 LATAM countries with imports from that region recorded at US$3 billion, giving Latin America a trade surplus.

Excluding what both Jamaica Producers and JMMB do in LATAM, Jamaica exports around US$20 million worth of goods from its ports a year while the country imports over US$400 million from the LATAM region.

Quite a significant trade imbalance.

The picture going forward looks even bleaker.

According to the Inter-American Development Bank’s (IDB) Trade Trends Estimates Report, the value of exported goods from Latin America and the Caribbean grew at 2.9 per cent year-on-year in the first quarter of 2023, after increasing by 16.4 per cent in 2022.

Exports in the region slowed significantly due to lower commodity prices and weaker volumes.

“The post-COVID expansionary phase in the trade cycle has run its course, and Latin American and Caribbean exports have moved into a slowdown that is set to continue into the next quarter before stabilising in the second half of the year.

“Policies and investments that seek to boost competitive insertion into foreign markets will be key to shoring up the region’s economic recovery,” said Principal Economist at the IDB’s Integration and Trade Sector who put the report together, Paolo Giordano.

A  roundtable dinner event put on by the Private Sector Organisation of Jamaica (PSOJ) and Adtelligent at the official residence of the Dominican Republics’s Ambassador to Jamaica, Angie Martínez under the theme ”How can Jamaica Export more to LATAM, raised a number of issues on this subject. 

Attended by many of Jamaica’s business luminaries, it served as a precursor to the “Keys to LATAM Conference that will take place at the Spanish Court Hotel this Thursday, September 7th, 2023.

The conference is being hosted by Craig Powe the lead principal of digital media company Adtelligent.

Powe has been championing greater trade between Jamaica and LATAM and should be supported in his endeavours. Jamaican businesses need to get on board if they are serious about exporting.

Why?

Because Jamaica has a population of around 3 million whereas LATAM’s stands at 600 million.

Powe’s energy, verve and will to foster greater trade and see more Jamaican companies doing business in LATAM is commendable.

Speaking at the dinner, he said: “ As Winston Churchill so brilliantly put it, “The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty. Churchill was a man who led a nation through its darkest hours to its finest day. We often hear about the challenges that loom large – language barriers, costly shipping, complex regulations and even the lack of business acumen. But as someone who has gone down the rabbit hole of Latin American trade, I assure you, many of these walls are not made of bricks but of paper. They are imaginary lines drawn on a map, and it’s high time we erase them.

“The Keys to LATAM conference is not a meeting assembly of facts and figures; it’s a roadmap to navigate these challenges, backed by real case studies of Jamaican businesses thriving in Latin America. This conference aims to be that vital educational platform that turns ‘non-intenders’ into skilled exporters.’

For Jamaican businesses to successfully export to LATAM, they must first be supported by the Government and its agencies and not get strangled by red tape and encounter foreboding obstacles. If you can’t make it at home how then can you make it abroad? For too long Jamaican firms have lamented the onerous taxes, the non-sensical bureaucracy, and the unwillingness to facilitate enterprise. Successive years go by and nothing is done to remove these impediments.

Confidence begets confidence and Jamaican firms would perform better in the export arena provided they are ably assisted.

For decades it has been said that Jamaica’s food importation bill is way too high. The  Group CEO of Grace Kennedy Don Wehby has repeatedly called for that bill to be reduced by half by 2030. In 2021, Jamaica imported more than US$1 billion in food products with US$175 million in imported processed food from the U.S., a growth of 21 per cent. The value of Jamaica’s food imports is 4 times that of its food exports.

Mega Mart boss Gassan Azan launched a state-of-the-art agricultural development project on 400 acres at Lakes Pen, Bernard Lodge, St Catherine in 2019. The first phase will employ 1000 people and the second phase another 400. This venture is estimated to come in at around J$11 billion, a sizeable investment. It will go some way to reduce Jamaica’s foot importation bill. But Azan has encountered impediments and the road to making this happen has not been made easy. One would have thought that this project would be regarded as of national interest but rather than roll out the red carpet, the roadblocks have been firmly put in place.

Azan is looking to export to LATAM and it will come as little surprise that he may not encounter the difficulties he has faced at home.

 Co-founder and CEO of Proven Management Christopher Williams made the point that Jamaica must play to its evident strengths if it is to look to LATAM. He drew attention to Jamaica’s reputation and prowess for entertainment and its strong brand recognition. This he sees as forming a beachhead to making a more profound impact with exports.

Of note, Williams drew attention to Jamaica having one of the most attractive capital markets in the region, one that allows Jamaican entrepreneurs to see and act on opportunities outside of Jamaica. Thus they can make profits in LATAM allowing money to flow back to Jamaica via dividends which bolsters the economy back home.

“Our capital markets can help us drive regional acquisitions so that we don’t have to rely on just exporting a physical product.  It’s a two-pronged approach to building wealth from outside of Jamaica; an export bullet and an acquisition bullet. The majority of our profits at Proven come from outside of Jamaica, ” he told Our Today.

Flow’s Country Manager for Jamaica, Stephen Price added that if Jamaica is to view LATAM as a major trading block then languages have to form a significant part of the educational curriculum at the school level. Some argued that with AI and ChatGPT the language barrier is removed but Price is right. He made the point that many in the business community in LATAM, speak good English and that there isn’t much of a language problem, at least not one that could seriously prevent business from being done.  The ability to converse and be familiar with a trading partner makes life easier. All too often we get lost in the sterility of technology. The impact of LATAM as a trading block therefore can inure to the benefit of Jamaica in many ways. English is not the primary language spoken in this region; that would be Spanish, then French. The ability to speak Spanish helps.  Flow’s parent company, Liberty touches all Central and South American markets. With over 45,000km, it possesses the largest fibre optic network in LATAM and the Caribbean handling over 60 per cent of the region’s traffic. 

“We can walk with any Jamaican company looking to do business in LATAM”, declared Price.”

The host of this Roundtable dinner, Ambassador Angie Martínez has made a dynamic impact on her first major diplomatic assignment. She arrived in Jamaica in April 2021. In 2020, Jamaica’s exports to the Dominican Republic came to a paltry US$1.2 million. By 2022 it had more than doubled to US$2.7 million and is expected to far exceed that for 2023.  In the same period, the Dominican Republic saw its exports to Jamaica surge from US$74 million in 2021 to US$122 million in 2022. Last year the country imported more than US$40 billion from the global market.

“As we delve into the statistics, it’s evident that while these numbers have doubled, the realm of possibilities remains vastly uncharted. Given our strategic proximity, Jamaica should be exporting more than US$2 million to the Dominican Republic. However, let us cast our minds back to 2003 when the trade landscape was notably more balanced. The Dominican Republic exported $18 million worth of goods to Jamaica, while Jamaica reciprocated with exports totalling approximately $10 million,” said Ambassador Martinez. 

A salient point made by Ambassador Martinez during the evening was that if Jamaican companies are looking to enter the LATAM market, it is imperative they should do so with a local partner, an entity that knows its way around the terrain. To attempt to do so without a local player could lead to grief and untold frustration she stressed.

There are Jamaican companies that have forged a path into LATAM, Jamaica Producers JMMB, Tropical Battery, and Lubricating Specialities Company readily spring to mind. If a Jamaican company is contemplating looking to this market it may be a good idea to seek those who have ventured there and listen to their experiences and heed their advice. One can learn a lot from trailblazers. 

A concern for many thinking about a bold move into LATAM is capital. It was an issue Powe took on: “ Let’s address the elephant in the room – capital. I’ve heard concerns about whether Jamaican businesses can afford to venture abroad. Yet, I see a room full of individuals with a collective net worth that exceeds imagination. Capital isn’t our limitation; it’s vision. And what’s more, there are grants, real ones, designed to bolster our market entry. They can help train your next-generation executives to conquer new lands, to turn Jamaican dollars into international empires.

“We have unused trade agreements gathering dust, agreements with the Dominican Republic, Colombia, Costa Rica and Cuba. We could wield these as the swords in our quest for global expansion. These aren’t just pieces of paper;  they’re open gates to flourishing markets. Your support can ensure that these gates never close.”