Doing Business in Latin America

By Terri Morrison
© Copyright 2004, All Rights Reserved

It’s not that Costa Ricans oppose trade. The country’s government actively promotes trade and foreign investment, even to the extent of financing a public relations campaign with the slogan 'Exportar es Bueno' ('Export is good'). But Costa Rica’s rejection of the CAFTA agreement with the United States illustrates the diversity of Latin America: Every Latin American is not alike, and obstacles may appear where you least expect them.

Expect Some Opposition
Quite often, a contract in Latin America is based upon the relationship that the two parties develop over the course of time. Latin American prospects may not trust you enough to do business with you until they have persistently asked you numerous questions about your family, politics, religious beliefs, sports, etc. Managers in the United States would probably feel comfortable with the sports inquiries, but would rather reserve the rest for family dinners around the dining room table.

However, when foreign executives resist discussions of questions that are important to Argentine, Uruguayan or Brazilian clients, it can corrode the relationship, even before it gets off the ground.

For example, if you are a U.S. citizen currently traveling through Mexico, Chile or Colombia, you might encounter a mild interrogation about anything from the United States’ current political leadership and its policies in the Middle East, to mad cow disease. Entwined in these questions, you might also hear a protest about a Mexican national being sentenced to death in the United States, or the United States controversial stand on the Kyoto Accord.

Often, visiting U.S. executives take umbrage at these inquiries, because they feel they are irrelevant to the business at hand, and that no one should be held personally responsible for the actions of their government. Eventually, some U.S. business people end up in a defensive posture. This is generally not a good idea. Perceptions are different among various nations, and your Latin counterparts may have particular reasons for their personal and political questions. Not every culture compartmentalizes topics of conversation into business and social agendas.

In these sticky situations, the best recourse is to listen carefully to the queries, and withhold judgments about the speaker’s viewpoint. You never know why a person may be unhappy with the United States policies…unless you’re in an obvious locale like Cuba. But even though the United States and Cuba have been at loggerheads for decades, Cubans are known for their consistent hospitality to visitors from the United States, despite the antagonism of the two governments.

Of course, Latin American countries have disagreements with their neighbors, as well as the United States. Bolivia has never forgiven Chile for annexing Bolivia’s entire coastline back in 1883. Bolivian Presidents still commemorate an annual 'Day of the Sea' with a vow to regain their seacoast. Landlocked Bolivia still maintains a navy, which now patrols Lake Titicaca. This may sound like ancient history, but those who forget the Bolivian-Chilean animosity do so at their own risk. In October 2003, Bolivians threw out their President after he dared to suggest that Bolivia start exporting natural gas through Chile.

Your Latin American Representative
The best way to break into the market in Latin America is with a local representative, someone with contacts, who knows how deals are done. Since business is conducted on a personal level, agreements are made between people, not companies. You will need the right person to introduce you.

These go-betweens are sometimes called enchufados in Spanish and despechantes in Portuguese (the language of Brazil). Be certain to contract with the correct individual -once you sign an agreement, you may not be able to change your representative.

Time on Your Hands
Don’t expect quick results. Latin Americans generally want long-term relationships. Naturally, it will take some time for you to establish such alliances. Several trips to Latin America will be necessary to get the wheels turning.

In terms of appointments, many studies have been published about different perceptions of time between Latin America and the United States. Here’s a suggestion: You are the foreigner, so people expect you to be on time. Just do not get indignant if they are late. Punctuality varies from country to country…people may be prompt in Venezuela, but more relaxed in Brazil.

Linguistic Blunders
Finally, even if you already speak Spanish or Portuguese, you will need a native speaker who is familiar with all the local nuances and vocabulary. Here are a few examples of how large corporations went awry:

When the Ford Motor Company marketed the Pinto in Brazil, they couldn’t give the cars away. Then they discovered that 'Pinto' was slang for 'small penis!' Naturally, no man wanted to own a 'pinto,' so Ford ultimately changed the car’s name to Corcel, which means 'horse' in Portuguese. Sales subsequently took off.

Ford also experienced problems in Mexico, where its Caliente wasn’t moving. Too late, they discovered that 'caliente' is Mexican slang for 'prostitute.'

And Ford’s light truck Fiera had a similar problem: In several Spanish-speaking countries, 'fiera' is slang for 'ugly old woman.'

Obviously, careful research of each Latin American market can pay off, and prevent you from marketing appendages instead of autos!

Excerpted from OAG Frequent Flyer, January 12, 2004