[Federal Register Volume 79, Number 54 (Thursday, March 20, 2014)]
[Notices]
[Pages 15564-15568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-06114]
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DEPARTMENT OF COMMERCE
International Trade Administration
Safety and Security Trade Mission to Panama and Columbia,
September 22-26, 2014
AGENCY: International Trade Administration, Department of Commerce.
ACTION: Notice.
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I. Mission Description
The United States Department of Commerce, International Trade
Administration, U.S. and Foreign Commercial Service (US&FCS) is
organizing a Trade Mission to Panama
[[Page 15565]]
City, Panama and Bogot[aacute], Colombia, with an optional port
security site visit to Cartagena, Colombia (for an additional fee),
from September 22-26, 2014. The purpose of this mission is to assist
U.S. companies in launching or increasing exports of U.S. safety and
security goods or services to Panama and Colombia. The mission will
include business-to-business matchmaking appointments with local
companies, as well as market briefings and networking events.
Target Sectors For U.S. Exporters Include: Industry security and
safety, intrusion protection, burglary and robbery, fire protection and
suppression, surveillance, access control, personal protection,
workplace safety, security risk assessment consulting, and law
enforcement products and services. In addition, opportunities exist for
companies offering port and infrastructure security. In both Colombia
and Panama the governments and private sector are investing some $30
billion in infrastructure projects, heavily focused on road projects,
airport modernization, sea and river port developments, and rail line
upgrades. As a result, the mission will include port and infrastructure
security as a focus.
II. Commercial Setting
Panama
Panama has historically served as the crossroads of trade for the
Americas. Its strategic location as a bridge between two oceans and the
meeting of two continents has made Panama not only a maritime and air
transport hub, but also an international trading, banking, and services
center. Panama's global and regional prominence is being enhanced by
recent trade liberalization and privatization, and it is participating
actively in the hemispheric movement toward free trade agreements.
Panama's dollar-based economy offers low inflation in comparison with
neighboring countries and zero foreign exchange risk. Its government is
stable and democratic and actively seeks foreign investment in all
sectors, especially services, tourism and retirement properties. Panama
and the U.S. recently implemented a Trade Promotion Agreement (TPA)
that has had the effect of eliminating some 90% of tariffs and duties
on U.S. exports to Panama. But even before the implementation of the
TPA, the U.S. was Panama's most important trading partner, with about
30% of the import market, and U.S. products have enjoyed a high degree
of acceptance in Panama. In 2013, U.S. exports to Panama increased 10%
to $10.8 billion--in no small part due to the fact that Panama's
economy grew 7.5%. U.S. exports to Panama have increased every year
since 2009, growing by more than two and half times over that period.
However, international competition for sales is strong across sectors
including telecommunications equipment, automobiles, heavy construction
equipment, consumer electronics, computers, apparel, gifts, and novelty
products.
Panama now enjoys investment grade rating status, granting the
Government of Panama international recognition for recent tax reforms
and its record of steady GDP growth while keeping its deficits under
control (even in 2009, a dismal year for the world economy, Panama's
economy grew 2.9% and the Government of Panama's deficit was only 1% of
GDP). Not only does the investment-grade rating lower the cost of
borrowing for the Government of Panama, but it sends a strong market
signal that Panama, even while carrying a debt ratio that is relatively
high, is one of only five Latin American countries to achieve this
distinction.
Panama's economy is based primarily on a well-developed services
sector, accounting for about 75% of GDP. Services include the Panama
Canal, banking, the Colon Free Zone, insurance, container ports, and
flagship registry. Panama is currently engaged in the Panama Canal
expansion project. This project, in conjunction with the expansion of
the capacities of its ports on both the Atlantic and Pacific coasts,
will solidify Panama's global logistical advantage in the Western
Hemisphere.
This logistical platform has aided the success of the Colon Free
Zone (CFZ), the second largest in the world after Hong Kong, which has
become a vital trading and transshipment center serving the region and
the world. CFZ imports--a broad array of luxury goods, electronic
products, clothing, and other consumer products--arrive from all over
the world to be resold, repackaged, and reshipped, primarily to
regional markets. Because of this product mix, U.S. brand market share
is significant, even if most of those products are made in Asia.
Safety and Security Industry
The outlook for the Panamanian safety and security market is
positive, with total market size in 2013 estimated to grow to $74
million. Local production of safety and security equipment is minimal
and there is a marked preference for U.S. products due to their
reliability, innovation, and diversity, as well as the close geographic
proximity and favorable conditions for air and sea freight from the
United States. The demand for safety and security products and systems
is driven by ever-increasing concerns over personal safety, more
stringent work-related regulations and growth in the tourism,
construction, real estate, banking, gambling, maritime, and duty free
zone. While the crime rate is still relatively low, particularly by
Latin American standards, it has risen in the last few years and there
is increasing public awareness of the need to respond.
Commercial institutions and households are usual targets for armed
assaults. There is also an increasing need for security equipment in
residential areas and public places. Because of raising labor costs,
many businesses and households are automating security. Additionally,
the boom in the construction sector and the expansion of the Panama
Canal is generating strong demand for safety equipment. Port expansion,
new airports, new mall development, the Metro transportation system,
and the Panama Canal expansion will provide excellent opportunities for
U.S. safety and security equipment exporters.
Colombia
The U.S.-Colombia Trade Promotion Agreement (TPA), which entered
into force on May 15, 2012, creates market opportunities for U.S. firms
in a number of sectors. The U.S.-Colombia TPA provides duty-free entry
for over 80 percent of U.S. consumer and industrial exports to
Colombia, with remaining tariffs to be phased out over the next 10
years and provides greater protection for intellectual property rights
(IPR). Colombia's traditional acceptance of U.S. brands as well as U.S.
and international standards provide a solid foundation for U.S. firms
seeking to do business there.
Colombia is the third largest market in Latin America, after Mexico
and Brazil, and is ranked 22nd globally as a market for U.S. exports.
Over the past 10 years, Colombia has become one of the most stable
economies in the region. Improved security, sound government policies,
steady economic growth, moderate inflation and a wide range of
opportunities make it worthwhile for U.S. exporters to consider
Colombia as an export destination. With more than 45 million people, an
improved security environment, an abundance of natural resources, and
an educated and growing middle-class, business opportunities are
booming in Colombia. The country's last two governments implemented
policies that took Colombia on the path to global competitiveness,
opening it up to global
[[Page 15566]]
trade and investment for 10 consecutive years. Colombia's strong
economic growth, moderate inflation rates, and sound fiscal policies
have made it a haven of stability in a time of economic uncertainty.
Over the last decade, the country's economy is estimated to have grown
over 4% on average; inflation was kept in the single digits and is
expected to remain well within the Central Bank of Colombia's 2% to 4%
range. Furthermore, the Government's strict fiscal discipline led many
international credit agencies to improve Colombia's credit rating to
investment grade for the first time in over 10 years. Increasing
Foreign Direct Investment (FDI) in Colombia demonstrates Colombia's
rise as a business destination. In 2011, FDI into Colombia reached a
historic US$13.4 billion from only US$2.4 billion in 2000, a fivefold
increase in just ten years, with forecasts of continued growth through
the next five years.
By 2011, Colombia's total international trade surpassed US$111
billion; exports reached US$56 billion while imports reached a historic
US$55 billion. After implementing free trade agreements (FTAs) with the
United States and with Canada, Colombia continues to move aggressively
in opening up to trade, seeking to quickly implement FTAs negotiated
with the European Union and South Korea, as well as moving ahead in
negotiations with countries such as Japan, Turkey, Costa Rica, and
Israel.
Safety and Security and Defense Industry
The safety and security market in Colombia is a very dynamic
sector, growing at an estimated rate of 5 to 10% per year. In addition,
Colombian defense spending increased from US$14.7 billion in 2012 to
US$15.1 billion in 2013, providing opportunities for U.S. defense
technologies, equipment, and services that overlap into the safety and
security sector. Market opportunities exist for safety and security
industry products such as CCTV cameras, telephones for security,
reproduction and record devices for security, data processing
equipment, radio transmission, biometric equipment, and communication
jammers, among others. Opportunities exist in the security and defense
sector for trucks and light armored vehicles (LAV-4x4 and 8x8), engines
and turbines military apparel and footwear, fixed-wing and rotary wing
aircraft helmets, anti-IEDs (improvised explosive devices), IED and
mine detectors, body armor and personal body armor equipment, handheld
navigation systems, Unmanned Aircraft Vehicles (UAV), GPS, modern
communication systems (MCS), IT-structure platforms, logistics software
solutions and software applications, flight simulators, air cruise
control, flat bottom aluminum river boats, and marine and coastal
surveillance systems and equipment. In regards to services, there is a
significant need for security assistance, maintenance and assistance to
the Army, Police, and Air Force. Helicopter and fixed-wing aircraft
maintenance and repair services are especially in need--in 2014
Colombia's fleet of Sikorsky AH 60L will most likely be undergoing
overhauls. The Colombian military has potential in the fields of
specialized training for all new communications systems, medical
training, and environmental training for hazardous material (HAZMAT)
management, transport, process and dispose of HAZMAT, expertise in
demolition, technical support for reconnaissance and analysis, and
security operations.
Overview of Colombia's Defense and Security Structure
Colombia's internal and external defense and security structure
includes the Army, Navy (Marines and Coast Guard), Air Force, and the
National Police. Real military spending increased from US$ 14.7 billion
in 2012 to US$ 15.1 billion in 2013 \1\ (this figure includes other
costs). The total military spending has been on average 3.7 percent of
the country's total GDP (2009 to 2013).\2\ Under Plan Colombia,
significant U.S. funding, technical assistance, and equipment support
has been provided to Colombian-led counter narcotic programs for drug
eradication and interdiction, and expansion of the capacity of
Colombian military and police. The current format of Plan Colombia
expired in 2012, with the consequent nationalization of military
programs by the Colombian government. For 2014 some spending may shift
to drug eradication and peace keeping programs, especially if the peace
negotiations that are currently undergoing with the FARC Rebel forces
in Cuba are achieved. Despite the peace negotiations process, the
Colombian government is expected to continue military actions and
spending to fight narco-terrorism, and gain security area through its
police force, especially to develop security surveillance and
enforcement in remote and isolated regions of the country.
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\1\ http://www.gsed.gov.co/irj/go/km/docs/Mindefensa/Documentos/descargas/Sobre_el_Ministerio/Planeacion/Presupuesto/Presupuesto_2013.pdf.
\2\ http://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS.
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Through the Foreign Military Sales Trust Fund, the U.S. Department
of Defense (DOD) provides equipment and training to the Colombian
military and police through military assistance programming. The
Department of State (DOS), military sales, and the international
narcotics control program are other sources of funding. The Office of
Aviation and Narcotics Affairs has been the main source of funding for
equipment acquisition in Colombia since 1990, through private military
consulting firms such as DynCorp. These firms operate through an open
market competitive bidding system. However, U.S. funding is expected to
significantly decrease at a rate of 10% over the next five years, from
US$ 157 million in 2011 to US$ 133 million in 2012.\3\ The Colombian
congress approved Law 80 of 1993, under which procurement of goods and
services for security and national defense made in Colombia by local
manufacturers, must be purchased over goods made by foreign
manufacturers and exporters.\4\ However, under the National Treatment
Caveat, Chapter 9 United States-Colombia bilateral trade agreement
(U.S.-CTPA), U.S. companies must be treated as locals when they
participate on public bids eliminating the disadvantage they used to
have prior to the signing of the agreement.
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\3\ Unofficial estimates from Narcotic Affairs Section NAS.
\4\ See chapter two of the Law 80 of 1993: http://www.alcaldiabogota.gov.co/sisjur/normas/Norma1.jsp?i=46940#0.
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In 2002, the Colombian government created a Wealth Tax to collect
US$ 800 million from large companies or wealthy individuals, 70% of
which was used to increase 2002-2003 defense spending. A similar tax in
2007-2011 was collected close to USD 3.7 billion, of which a
significant portion was founded defense spending. The Colombian Army
receives 60% of funding, followed by the Air Force with 25% and the
Police with 10%.
The U.S. has had a privileged relationship with Colombia in regards
to military equipment acquisitions; however, new competitors from
England, France, South Korea, and Spain have gained some notoriety. The
Colombian military tends to use standardized equipment and values
relationship, trust, and familiarity with equipment (as exemplified by
their consistent use of the same type of rifles), however, foreign
manufacturers are gaining market share. According to the unofficial
estimates, U.S. imports
[[Page 15567]]
represent close to 50% of the total imports of military equipment, out
of the unofficial estimates which are calculated to be close to US$ 1.3
billion (2012).
Opportunities
Military and security equipment trends have remained the same post-
Plan Colombia, since the government continues to support drugs
interdiction and eradication efforts. Due to the significant
improvement of national security, the Colombian Air Force has been more
involved with military and civilian rescue operations. The Air Force
created in 2010 a new rescue unit and continues to purchase rescue
equipment and life support systems. The National Police is expanding
its activity on civilian and urban surveillance, adapting its force and
upgrading its equipment to this environment. Recent navy purchases have
shown the government's interest to increase the guarding of the
Caribbean coast, especially around the San Andres and Providencia
Isles, which are under watch, due to Nicaragua's intent of claiming
more Caribbean territory from Colombia. There has also been the intent
from the Minister of Defense Juan Carlos Pinzon to purchase close to 20
fighter jets, some of the possible candidates may include the F-16 and
Boeings F-18 Hornet however, and this intent has been put on hold until
further notice in 2014.
In 1990, the U.S. Office of Aviation and Narcotics Affairs provided
18 UH-1N helicopters, buying 36 more over the years. In 2010, the
Colombian military had 280 helicopters and 200 fixed-wing aircraft with
no major new purchases projected until 2015 with the exception of some
possible interest to purchase helicopters with higher capacity to
transport troops and equipment. Due to recent aircraft acquisition,
there are significant opportunities for training, parts and maintenance
for these aircraft, especially for Blackhawk rotor blades repair
services and erosion-resistant coating systems. Other opportunities
include: Parameter security protection systems (convoy security,
security walls and fences, and video surveillance systems), safety,
survival accessories, search & rescue equipment, protective clothing,
emergency medical equipment, trauma-life support systems.
The security forces number about 435,000 uniformed personnel:
285,000 in the military and 150,000 in the police. From 2012 to 2015,
key needs will be armament and personal arms (up to USD 1 million a
year), night vision goggles (up to USD 1 million a year), anti-
ballistic missiles (ABM) (up USD1 million a year), survival equipment
and kits (up to USD 400.000 a year), flight suits, footwear (up to US$
200.000 a year), personal arms (M4 rifles, M9 pistols), grenades,
binoculars, and medical equipment. The Colombian army is looking into
upgrading its equipment and uniforms, with engineered textile
solutions, smart textiles materials, as well as integrated
communication aircraft helmets.
On May 15, 2012 the FTA agreement between the U.S and Colombia
entered into effect finishing the implementation phase. 80 percent of
U.S. exports of consumer and industrial products to Colombia are duty-
free immediately upon entry into force, with remaining tariffs phased
out over ten years. Other provisions include strong protection for U.S.
investors (legal stability), expanded access to service markets,
greater intellectual property rights protection, market access for
remanufactured goods, increased transparency and improved dispute
settlement mechanisms (arbitration). The majority of Defense and
Military equipment have zero tariffs since the FTA has been
implemented. Prior to the agreement the tariff ranged between 5% and
20%. The U.S.-Colombia TPA also reduced tariffs for a wide variety of
products and services in the safety and security industries.
III. Mission Goals
The goal of the trade mission to Panama and Colombia is to help
participating firms gain market insights, make industry contacts,
solidify business/sector strategies, and advance specific projects,
with the goal of increasing U.S. exports to Panama and Colombia.
Participants will have access to the US&FCS Senior Commercial Officers
in Panama City and Bogot[aacute] and to US&FCS Commercial Specialists
during the mission. They will learn about the many business
opportunities in Panama and Colombia, and gain first-hand market
exposure. Participants already doing business in Panama or Colombia
will have opportunities to further advance business relationships and
projects in that market. U.S. companies new to either country will gain
support in finding agents, distributors, and joint venture partners
through this mission, laying the foundation for successful long-term
ventures by providing business-to-business introductions and market
access information.
IV. Mission Scenario
The mission will stop in Panama City, Panama and Bogot[aacute],
Colombia. In each city, participants will meet with pre-screened
potential agents, distributors, and representatives, as well as other
business partners and government officials. They will also attend
market briefings by U.S. Embassy officials and networking events
offering further opportunities to speak with local business and
industry decision-makers. In addition, there may be an optional spin-
off offered for an additional fee for port security companies to visit
and tour the port of Cartagena, Colombia at the end of the mission on
Friday, September 26th. Companies interested in this option should
contact April Redmon at [email protected] for more information.
V. Proposed Time Table
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Monday, September 22, 2014; Panama Market Briefing.
City, Panama. Matchmaking appointments.
Networking reception.
Tuesday, September 23, 2014; Panama Matchmaking appointments and/or
City, Panama. site visits.
Afternoon tour of the
Miraflores Locks and Panama
Canal.
Wednesday, September 24, 2014; Travel to Bogot[aacute],
Bogot[aacute], Colombia. Colombia.
Market Briefing.
Networking reception.
Thursday, September 25, 2014; Matchmaking Appointments.
Bogot[aacute], Colombia.
Friday, September 26, 2014; Half-Day of Matchmaking
Bogot[aacute], Colombia. Appointments.
Departure/End of Mission.
* an optional site visit to the
port in Cartagena, Colombia
may be possible for interested
port-security companies for an
additional fee.
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VI. Participation Requirements
All parties interested in participating in the Safety and Security
Trade Mission to Panama and Colombia must complete and submit an
application for consideration by the Department of Commerce. All
applicants will be evaluated on their ability to meet certain
conditions and best satisfy the selection criteria as outlined below. A
minimum of 15 U.S. companies and/or trade associations and maximum of
17 companies and/or trade associations will be selected to participate
in the mission from the applicant pool. U.S. companies or trade
associations already doing business with Panama and Colombia, as well
as U.S. companies or trade associations seeking to enter these
countries for the first time may apply.
Fees and Expenses
After a company and/or trade association has been selected to
participate on the mission, a payment to the Department of Commerce in
the form of a participation fee is required.
The participation fee will be US$3,600 for a small or medium-sized
enterprise (SME) \5\ and US$3,905 for a large firm.
The fee for each additional representative is US$450.
Expenses for travel to and from the mission, lodging, most meals,
and incidentals will be the responsibility of each mission participant.
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\5\ An SME is defined as a firm with 500 or fewer employees or
that otherwise qualifies as a small business under SBA regulations
(see http://www.sba.gov/services/contracting opportunities/
sizestandardstopics/index.html). Parent companies, affiliates, and
subsidiaries will be considered when determining business size. The
dual pricing reflects the Commercial Service's user fee schedule
that became effective May 1, 2008 (see http://www.export.gov/newsletter/march2008/initiatives.html for additional information).
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Conditions of Participation
An applicant must submit a completed and signed mission
application and supplemental application materials, including adequate
information on the company's products and/or services primary market
objectives, and goals for participation. If the Department of Commerce
receives an incomplete application, the Department may reject the
application, request additional information, or take the lack of
information into account when evaluating the applications.
Each applicant must also certify that the products and
services it seeks to export through the mission are either produced in
the United States, or, if not, marketed under the name of a U.S. firm
and have at least fifty-one percent U.S. content. In the case of a
trade association or trade organization, the applicant must certify
that, for each company to be represented by the trade association or
trade organization, the products and services the represented company
seeks to export are either produced in the United States or, if not,
marketed under the name of a U.S. firm and have at least fifty-one
percent U.S. content.
Selection Criteria for Participation
Selection will be based on the following criteria, listed in
decreasing order of importance:
Suitability of the company's (or, in the case of a trade
association or trade organization, represented companies') products or
services for the Panamanian and Colombian markets
Company's (or, in the case of a trade association or trade
organization, represented companies') potential for business in Panama
and Colombia, including likelihood of exports resulting from the
mission
Consistency of the applicant's goals and objectives with
the stated scope of the trade mission
Referrals from political organizations and any documents containing
references to partisan political activities (including political
contributions) will be removed from an applicant's submission and not
considered during the selection process.
VII. Timeframe for Recruitment and Applications
Mission recruitment will be conducted in an open and public manner,
including publication in the Federal Register, posting on the U.S.
Department of Commerce trade mission calendar (www.export.gov/trademissions) and other Internet Web sites, press releases to general
and trade media, notices by industry trade associations and other
multiplier groups, and publicity at industry meetings, symposia,
conferences, and trade shows.
Recruitment will begin immediately and conclude no later than
Friday, June 20, 2014. The U.S. Department of Commerce will review
applications and make selection decisions on a rolling basis until the
maximum of seventeen participants is reached. We will inform all
applicants of selection decisions as soon as possible after
applications are reviewed. Applications received after the June 20th
deadline will be considered only if space and scheduling constraints
permit.
How To Apply
Applications can be downloaded from the trade mission Web site or
can be obtained by contacting April Redmon at the U.S. Department of
Commerce (see contact details below.) Completed applications should be
submitted to April Redmon.
Contacts
U.S. Commercial Service Safety and Security Team:
Ms. April Redmon, International Trade Specialist, U.S. Commercial
Service-Virginia/Washington, DC, 2800 S. Randolph St., Suite 800,
Arlington, VA 22206, Tel: 703-756-1704, Email: [email protected].
U.S. Commercial Service in Panama
Enrique Tellez, Commercial Specialist, U.S. Commercial Service
Panama City, Tel: 011-507-317-5080, Email: [email protected].
U.S. Commercial Service in Colombia
Camilo Gonzalez, Commercial Specialist, U.S. Commercial Service
Bogota, Tel: 011-571-275-2764, Email: [email protected].
Elnora Moye,
Trade Program Assistant.
[FR Doc. 2014-06114 Filed 3-19-14; 8:45 am]
BILLING CODE 3510-DR-P