Technology Publications

Building bridges across borders

InTech, Jun 2004 by Fussell, Ellen

Jobs are moving offshore; there's no doubt about it. But one manufacturing business official from El Salvador says it would be smart business if offshore countries partner with U.S. manufacturers instead of competing directly against them.

El Salvador's Foreign Investment Agency, PROESA, is building a case to establish a strategy between the U.S. and Central America. Patricia Figueroa, executive director of PROESA, said investing businesses in Central America through the Central America Free Trade Agreement (CAFTA) could actually build job opportunities in the U.S. and El Salvador. (PROESA promotes investment in the country, offers foreign investors personalized support, coordinates investment opportunities, and works closely with El Salvador's government agencies and business community to help investors begin doing business in the country.)

"CAFTA is kind of a backdoor playing field, whereby industries like food and beverage and textiles will enjoy duty-free imports and more market opportunity," Figueroa said. "Through CAFTA, the U.S. and El Salvador can become more stabilized and solid trade partners. The free trade agreement is geared to increase U.S. business opportunities to compete around the world," she said.

"For every 1 billion exports to our regions, 25,000 direct jobs are generated in the U.S., exporting more products," Figueroa said. "That's a larger export market for U.S. goods and services than India, Indonesia, and Russia/The manufacturing industry is in constant change, generating new kinds of jobs, so it's important to readapt the way business gets done, she said. "Under CAFTA we're required to use U.S. yarns and fabrics. That means the U.S. is the master market. The goal is to bring materials closer to the region where the goods are manufactured-to build a partnership between the U.S. and Central America."

Jobs lost to offshore outsourcing between 2000 and 2003 totaled 104,000, or nearly 35,000 a year, according to a March report from the Information Technology Association of America. Yet, in a new report from the AeA, formerly known as the American Electronics Association, the organization said offshoring is exaggerated as the primary cause of lost jobs/The decline of the world's economy, the end of the high-tech bubble, and dramatically improving productivity rates are the largest factors," the report said. It also said the U.S., among other countries, must maintain a global presence to be competitive in a global marketplace.

In industries such as food processing and telecommunications, it's no longer economical to manufacture products and raw materials if companies decide to do production across the globe, Figueroa said. (See sidebar on Korean manufacturing.) The goal of CAFTA is to take advantage of lower costs and location to"build a bridge of partners in the Western Hemisphere and allow us all to remain competitive,"she said.

Figueroa said accessing the CAFTA market could also create more opportunities for engineers to develop project for governments-construction and telecommunications. There could be opportunities to establish contracts in government and the private sector-construction companies for tourism projects and telecommunications, she said.

"Manufacturers look for increased market access to solidify their industries," she said. "Accessing the CAFTA market could enhance their products, exposing these industries to a variety of skills-a big market with a big interest in U.S. products."