Strengthening U.S. Relations with Latin America

I am here as the Chair of the U.S. Hispanic Chamber of Commerce, but I also represent the Hispanic Council on International Relations.   

The U.S.  Hispanic Chamber, founded in 1979, represents one of the most important vehicles for reaching Hispanic businesses in the country.  Our mission is simple:  to advocate on behalf of—and promote the growth of—Hispanic businesses.

The U.S.  Hispanic Chamber is dedicated to representing, promoting and advocating for the 1.4 million Hispanic-owned businesses in the U.S.  and Puerto Rico.  In addition to actively promoting the economic growth and development of Hispanic businesses, the USHCC serves as an umbrella organization for over 150 local Hispanic Chambers nationwide.

The USHCC seeks to:

• Implement and strengthen national programs that assist the economic development of Hispanic businesses.
• Increase business relationships and partnerships between corporate sector and Hispanic-owned businesses.
• Promote international trade between Hispanic businesses in the U.S.  and Latin America.
• Provide technical assistance to Hispanic business associations and entrepreneurs. 

Let me share with you some exciting statistics about our community, which, I believe, create opportunities for both our domestic and international communities. The growing proportion of Hispanics in the U.S. – estimated at about 35.5 million strong—constitutes a major demographic shift in American history. We represent 13% of the Nation’s population and are well on our way to becoming the Nation’s largest minority group within this decade.  It is projected that by the year 2040, one in four people residing in the U.S.  will be of Hispanic descent.

• As the largest racial and ethnic population in the U.S.,  Hispanic Americans are affecting the cultural, economic and political landscape.  Our growing representation in the political process and legislative branches of government continues to shape legislation and policy on a variety of important issues. 
• Hispanic buying power has increased 56% in the past nine years, and the consumer base is expected to control a purchasing power of $500 billion by the end of the year. 
• By 2050, the Hispanic population is expected to exceed 80 million.
• The median age is 26, as compared to 34 years for non-Hispanics. This will drive a rapid increase in purchasing power, which is estimated to soon reach the half-trillion dollar mark.
• Hispanic enterprises continue to grow on average at 2.5 times the rate of other U.S. enterprises. In 1992 there were fewer than 800,000 Hispanic owned businesses; the estimate today is that there are over 2 million    Hispanic-owned businesses at this time: the total revenues from these businesses grew from $35 billion in 1992 to almost $300 billion right now.
• The larger Hispanic companies are growing at an even faster rate. Approximately 33,000 firms were generating annual revenues in excess of $1 million and aggregate revenues in excess of $200 billion. 
• The market value of Hispanic-owned companies is more than $175 billion. 
• The top 5 states in terms of Hispanic-owned businesses are California, Texas, Florida, New York and New Jersey.
• The top 5 states in growth of Hispanic-owned businesses are Maine, North Carolina, Rhode Island, Vermont and Tennessee.

Because of the growth of the Hispanic population in this country, the Hispanic business and professional community has also increased and now has the potential of strengthening the
U.S. ’s economic competitive lead in the global market, particularly in the area of exports and direct investment abroad. 

• Spanish-speaking America can be considered to be the world’s 5th largest Hispanic nation.  And this, I believe presents opportunities – to extend our reach overseas.
• The U.S. Hispanic market ranks as the third largest “Latin American economy” behind Brazil and Mexico. 

According to Hispanic Business Magazine, “Mexico was the top destination for Texas exports in 2001.  Some 46% of the state’s exports, worth $41.6 billion, went to Mexico.  Valued next among Latin American countries with regard to Texas exporting was Brazil, ranking sixth.  Mexico was also the top destination for California’s exports in 2001.  Exports to Mexico from the state amounted to $16.3 billion, or 13.85% of California’s total exports.  Brazil was the Latin American country ranked next for California exports, ranking 18^th.  The Latin American country ranking highest for exports from New York was Mexico, ranking sixth.  Florida’s top destination for exports in 2001 was Brazil, or $3.6 billion, or 10.1% of its total exports to that nation.  The next highest Latin American country for Florida exports was Mexico, ranking third.”

By 2010, the U.S.  will be selling more products to all of Latin America than to Europe and Japan combined. And, due to our cultural and linguistic ties, U.S. Hispanic businesses and professionals can tap into the economic opportunities of Mexico, Latin America and Spain. 

Overall, there has been a consistent trend in the region where state-run companies are being privatized, trade barriers are crumbling, and local and regional financial markets are opening.

The U.S. Hispanic Chamber of Commerce, the Hispanic Council on International Relations, free trade organizations, business associations and government—at all levels, federal and state—can play a vital role in assisting Hispanic businesses to establish a foothold in the Latin American market.

There are several ways to reach this objective:

• Recognition by top-level political and business leaders of the potential that Hispanic and other minority-owned businesses are a vital part of our economy.  
• Increase the number the Business Development/Trade Missions to Latin America led by top United States officials and track the results of these missions. 
• The responsibility of preparing trade missions should not only rest upon the initiatives of the U.S.  Department of Commerce, but state governments must become more active participants in preparing and sponsoring these missions.
• Strengthen outreach efforts to Hispanic-owned businesses by governmental organizations like the Minority Business Development Administration, the Export-Import Bank, and the Small Business Administration.  These organizations have loan and educational/training programs available to minority-owned businesses.  In fact, through the efforts of Hector Barreto, Sr., one of the founders of the U.S. Hispanic Chamber of Commerce, Mexican government officials, with the help of the private sector, are creating an entity in Mexico modeled after the U.S.  SBA to help Mexican small businesses with financial and technical assistance. 
• The Small Business Investment Company program of the Small Business Administration (SBA) provides long-term loans and/or venture capital to small firms. SBICs are composed of private companies, licensed and regulated by the SBA that provide loans, at favorable terms, to small firms for venture and risk investments. 
• The Export-Import Bank helps finance the sale of U.S. exports, primarily to emerging markets, by providing loans, guarantees, and insurance to projects.  In FY 2001, the Export-Import Bank supported $12.5 billion for U.S.  exports worldwide.
• The creation of specific economic investment programs for Latin America that mirror the Department of Commerce’s Business Information Services for the Newly Independent States (NIS), which serves as an information center for U.S. companies exporting business opportunities in Russia and other NIS.

During the Minority Enterprise Development Week Conference, sponsored by the Department of Commerce’s Minority Business Development Administration, Secretary of State Colin L. Powell spoke about the important role that minority entrepreneurs play in the support of developing economies.

Trade missions to Latin America, Spain and Mexico led by Secretary of State Colin Powell and Commerce Secretary Evans would heighten the importance of Hispanic businesses.  It would signal to our community nationwide that the Administration understands the significant economic development role that Hispanic businesses play in our Nation’s economy.  Their leadership in this area will create the compelling opportunity for Hispanic small businesses to be the natural link – the bridge of economic opportunity—within countries with shared linguistic and cultural ties.

The goals of Hispanic-owned businesses entering into Latin America are to have access and be able to participate in all the programs that are available to businesses, so they can grow, prosper and compete in the Global economy.

Private and governmental resources that invest in Hispanic-owned businesses entering this market will see the benefit of providing the opening to a community that is poised to contribute in a larger sense to the economic well being, of not only our great Nation, but to the international community as well.

 Thank you for the opportunity to address you.  And may God bless you and the United States of America.

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The Secretary’s Open Forum Distinguished Lecture Series, In Cooperation with The Office of Civil Rights, Office of the Secretary of State and The Hispanic Employment Council of Foreign Affairs Agencies (HECFAA), 2201 C Street, NW, DC