Safety and Security Trade Mission to Panama and Columbia, September 22-26, 2014, 15564-15568 [2014-06114]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 79, Number 54 (Thursday, March 20, 2014)]
[Notices]
[Pages 15564-15568]
From the Federal Register Online via the Government Printing 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

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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\ https://www.gsed.gov.co/irj/go/km/docs/Mindefensa/Documentos/descargas/Sobre_el_Ministerio/Planeacion/Presupuesto/Presupuesto_2013.pdf.
    \2\ https://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: https://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 april.redmon@trade.gov 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 https://www.sba.gov/services/contracting opportunities/
sizestandardstopics/). 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 https://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: April.Redmon@trade.gov.
U.S. Commercial Service in Panama
    Enrique Tellez, Commercial Specialist, U.S. Commercial Service 
Panama City, Tel: 011-507-317-5080, Email: Enrique.Tellez@trade.gov.
U.S. Commercial Service in Colombia
    Camilo Gonzalez, Commercial Specialist, U.S. Commercial Service 
Bogota, Tel: 011-571-275-2764, Email: Camilo.Gonzalez@trade.gov.

Elnora Moye,
Trade Program Assistant.
[FR Doc. 2014-06114 Filed 3-19-14; 8:45 am]
BILLING CODE 3510-DR-P