Black-owned companies can take advantage of import, export and investment opportunities under the U.S.-Colombia Trade Agreement that entered into force on May 15. The agreement’s elimination of tariffs on a host of goods and services, as well as barriers to investment, make it easier and cheaper for Black-owned firms in the United States to do business in the South American nation, including with its large community of African descendants.
Colombia has the third-largest Black population in the Western Hemisphere after Brazil and the United States. Numbering more than 10 million by some estimates, Afro-Colombians make up 21 percent of that country’s population, with most of them concentrated on the northwest Caribbean coast and the Pacific coast in such departments as Chocó. In Chocó alone, they number 95 percent. Enforcement of the trade agreement comes despite opposition from Black trade union activists in both Colombia and the United States, who charge that the pact would further exploit Afro-Colombian and indigenous workers, who already suffer human rights abuses while their communities experience underdevelopment, state repression and massive displacement. Charges by these and major labor groups led to the incorporation of worker protections in the trade deal, and Colombia’s creation of a labor ministry, prosecution of crimes against union workers and steps to fight discrimination against Afro-Colombians.
Under the agreement, African-American-owned and other U.S. small businesses now have duty-free access to such key markets in Colombia as auto parts, information technology equipment, medical and scientific equipment, wood, clothing and food products, and to services sectors such as computer services, business and environmental consulting services, and legal, architectural and other professional services. The agreement targets barriers such as local presence requirements and provides for improved standards for the protection and enforcement of a range of intellectual property rights. All of these provisions lead to a facilitating business environment for small firms seeking new customers in Colombia.
En route to Cartagena, Colombia’s capital, for the Summit of the Americas in April, President Obama specifically cited African-American-owned firms as beneficiaries as he announced the formation of a Small Business Network of the Americas to help such businesses gain access to Colombia and other Latin American markets. “This initiative is going to help our small businesses, Latin-owned businesses, women-owned businesses [and] African-American-owned businesses,” he said.
As envisioned, the network will expand the pool of available resources for business development, enhance access to business counseling services for entrepreneurs and foster provide a framework to connect businesses across the hemisphere. It will:
Expand the Small Business Development Center model to other countries in the hemisphere; connect these and other small-business support centers in the region; provide matchmaking services and export counseling through U.S. Export Assistance Centers and other platforms to SBDC clients seeking business partners in other countries; and enhance the use and availability of virtual trade platforms like SBDCglobal.com. SBDCs provide individualized, long-term business counseling, group training, and market research services.
Encourage entrepreneurship among Latin America’s diaspora in the United States through the Latino American Idea (La Idea) partnership and the Caribbean Idea Marketplace (CIM) business competitions. As with the African Diaspora Marketplace, these public-private-sponsored competitions award grants to the most transformative ideas for business and investment and promote the development of business relationships among entrepreneurs in the United States, Latin America and the Caribbean. Working capital grants in association with La Idea and CIM partners will be provided to competition winners and up to $150 million in financing will be provided through the Overseas Private Investment Corp. for eligible applicants.
Provide up to $100 million in loan guarantees to encourage financial institutions in Latin America and the Caribbean to increase lending to SBDC clients and other local small businesses, and catalyze greater private-sector lending to small businesses to address the estimated $160 – $190 billion credit gap they face in Latin America and the Caribbean.