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Central America beckons business

Companies large and small see plenty of fresh opportunity in developing economies to the south.

By JAMES THORNER
Published March 22, 2006

Wal-Mart bought a majority stake in the 375 locations of La Fragua, the discount store and supermarket chain founded in Guatemala in 1928. Verizon is laying phone lines in the Dominican Republic, whose 9 percent growth suggests it will soon export a lot more than pitchers and shortstops.

But the upcoming Dominican Republic-Central American Free Trade Agreement has brightened the prospects beyond the boardrooms of billion-dollar corporate juggernauts.

Tampa Bay area firms - a solar panel wholesaler, plastics company and landscaper among them - sought a piece of the emerging economies to the south at a CAFTA road show in St. Petersburg Tuesday.

"I'm looking for a new adventure. That's why I'm here today," said Ray Bradley of Raymove, a $15-million landscaping company in Oldsmar.

Sunshine is drawing Dale Golden south. He sells less than 5 percent of his solar panels overseas, mostly to heat water at hotels in the West Indies.

CAFTA, which drops foreign tariffs on 80 percent of U.S. manufactured goods, could mean expansion for his Bradenton company, Solar Direct.

"Our primary target is Costa Rica. They're more industrialized," Golden said. "Right now we're a little hazy on this DR-CAFTA."

The road show was meant to clear the haze. Speakers at the Radisson Hotel on Roosevelt Boulevard included four American commercial officers posted to Central America and the Caribbean. Private consultations between business owners and commercial officers followed.

Dan Thompson, a foreign service officer based in El Salvador, said the Latin countries have switched from basket cases to stable democracies with sustainable economies.

"We used to call them banana republics," Thompson said. "That was pretty close."

CAFTA helps build a free-trade bloc from Tierra del Fuego to the Canadian arctic. Step one was the North America Free Trade Agreement, which dropped barriers among the United States, Mexico and Canada. An Andean treaty will do the same for several South American countries.

The societies of Central America and the Caribbean don't always meet U.S. standards, panelists warned.

The antiquated power grid can cause rolling blackout in places like the Dominican Republic. U.S. copyrights are often flouted, not just for music CDs and computer software, but also pharmaceuticals. Corruption is common, gangs troll on the sidelines and compulsory education is minimal.

But the region appeals in other ways: Guatemala has the region's largest economy, with taxes of only 10 percent. El Salvador's currency is the U.S. dollar. Nicaragua is the least developed, but has the most natural resources. Costa Rica boasts 95 percent literacy and a middle class unprecedented for the region.

Making blue jeans in a Salvadoran plant requires 70 to 80 percent of the fabric come from the United States. In making the same pair of jeans, China uses 2 percent U.S. material. And exports to Latin America need not be high-tech.

"We've seen people export bales of used clothing," said Mitch Larsen, a diplomat in Guatemala.

[Last modified March 22, 2006, 01:58:24]