WHY MADE IN LATIN AMERICA MATTER?

During my time living in Peru from 2012 to 2014, I witnessed the government's negotiations with China for a Free Trade Agreement (FTA). Concerned about the potential consequences, I warned factory owners about the detrimental impact of cheap Chinese imports. Unfortunately, my fears came true. When I met several factory owners at a trade show in 2019, they shared how their factories had suffered greatly in the six years following the FTA. Many had closed down, leaving workers unemployed. The question remained: What happened to these workers? Were they left to rely on tourism or export resources like copper, iron ore, gold, or agricultural products to compensate for their losses? The real numbers, including workers' incomes and the social consequences of factory closures, painted a bleak picture, revealing that the promised economic growth had not materialized as expected.

 

This situation reminded me of the devastating impact of the British spinning industry during the first industrial revolution, when British spinners flooded India with their products, destroying the local cotton spinning industry. Back then, it took military force, but today, a simple propaganda campaign can deceive and undermine a nation's economy.

 

Recently, I had the opportunity to visit Uruguay. As a wool specialist, I had been trading a significant volume of wool from Australia and New Zealand but had never visited Uruguay before. I had spent a long time studying how to connect farmers directly to the market and transform the industry by empowering them and creating an open market where farmers lead the way. By providing financial tools that allow farmers to hold onto their wool without selling it short, we can stabilize the market and ensure they receive the compensation they deserve. This approach also shifts the focus away from industry players who previously held all the power, transforming them into service providers for testing, packing, and logistics. Uruguay, with its small size and absence of an auction system, proved to be the perfect place for my platform.

 

In addition to this, I developed a series of platforms like craftofUruguay.com to boost exports for each country I visit. These platforms help small and medium-sized companies and factories present their products 24/7 to the global market using phone, video, and other content. I also offer affordable ERP software starting at just $10 per month, enabling efficient management of daily operations, including orders, invoices, payments, warehouses, and logistics. By digitizing every step, we can maximize efficiency and reduce operational costs. I have been actively seeking local co-founders to join me in launching this platform and bringing more factories and companies on board.

 

Latin America possesses a rich cultural background influenced by civilizations like the Maya and the Inca, blended with Spanish and Portuguese legacies. Its unique climate, extending from the Amazon to the ocean and rivers, gives rise to countless products that can only come from Latin America. The region experienced economic growth many years ago, but progress seems to have stagnated in recent decades. While globalization may have altered the appearance of cities and introduced some international influences, overall, incomes for citizens have either remained stagnant or regressed. Globalization has not brought prosperity to the region; instead, it has limited opportunities for local businesses and youth, with China emerging as the dominant winner.

 

 

 

 

The Importance of "Made in Latin America"

 

When I visited the shopping malls, it was clear that products made in China dominated the market. In Peru, nearly half of the cars and SUVs were from China, while in Uruguay and Colombia, the proportion was much lower, around 10-20% at most. But does the Peruvian population truly benefit from the Free Trade Agreement (FTA) by paying less for Chinese cars? The answer is clear: the number of people who benefit is significantly smaller than those who suffer.

 

Unfortunately, the manufacturing sector in Peru has been hit hard after the FTA, with the exception of industries dealing with special and unique products like alpaca and Peruvian cotton. However, these sectors make up only a small portion of the total manufacturing industry job losses caused by the FTA with China.

 

During my visit to Uruguay , I went to the wool warehouse, leading trading companies, and top-making companies, and I noticed that there were only a few spinners and sweater factories left. At the craft market, out of the 40 booths, there were only 5 booths featuring hand-knitted wool products. The industry is declining rapidly, with current wool production at only 20% of what it was 30 years ago. People I talked to expressed pessimism about the industry's chances of regaining its former glory.

 

I learned about a leading brand called Manos in Uruguay, which produces most of its products in the country. I visited their production team and they shared their struggles in finding local knitters to meet the increasing demand. Although they sell out all their products every year, they can't produce more as the youth are no longer joining the industry.

 

This information confirmed my long-held thoughts, and I decided to test my idea called Homecraft.TV in India. As a wool specialist, yarn and sweater expert, my first plan is to establish a hand-knitting town in Uruguay. By supporting local hand-knitters and creating a community, we can gradually increase the size of the knitting workforce. Through global sales, one piece at a time, more people can join the industry, attracting young people, increasing suppliers, and involving designers. This ecosystem can rebuild itself on a scalable level, leading to the revival of the spinning industry, sweater and weaving factories, and the growth of the wool farming sector. This would create thousands, even tens of thousands, of new jobs.

 

I greatly admire Manos' long-term commitment to making products in Uruguay. It's difficult to resist the allure of cheaper alternatives, but their dedication for decades is inspiring. We discussed collaborating to bring their spirit to my platform and growing together by increasing the number of hand-knitters across the country.

 

During our discussions, I met the Michel family, owners of the leading ladies' chain called Lolita in Uruguay. We discussed promoting hand-knitting and other craft towns in Uruguay, gradually selling "Made in Uruguay" crafts under their brand starting from the next fall/winter season. Even a small test would be a significant step in raising awareness about products made in Uruguay. We also discussed helping impoverished families in other parts of the city and rural areas. Starting with 100 families would be a good beginning.

 

In Cusco, Peru, I met with the Alpaca Innovation Institution, and they agreed to support the platform by starting with 50 alpaca farmers. This initiative would allow them to sell their alpaca fiber or products

directly to local and overseas buyers. Additionally, I plan to gather 25 women to establish an alpaca hand-knitting town as I have experience in hand-knit sweaters and shoes.

 

 

 

Promoting Manufacturing in Latin America for Economic Growth

 

During my visit Colombia , I toured two leading fabric mills, several sewing factories, and two prominent shopping malls, including the renowned Adina in Bogota. I was impressed to see a significant number of brands in Colombia focusing on "Made in Colombia" products, with some achieving 100% local production, while others reached 80% or 40%. Despite not having special fibers or unique leather like Peru, these factories and brands have come together to create their own ecosystem, supporting each other. Despite lacking the high duty protection that Brazil enjoys, they differentiate themselves through the uniqueness of their fabrics, sewing techniques, and leather goods. Their prices, 30-50% higher than Chinese imports, are competitive even in the US market. They have gained momentum, especially in active wear, swimwear, and shape wear, due to their fast delivery, high-quality craftsmanship, and small minimum order requirements. Furthermore, these steadfast local brands contribute to the persistence of the local industry. I visited a total of seven factories, each having its own brand, which was quite impressive. They sell their own brand to increase profits while also engaging in private label production to ensure survival and generate steady profits for future growth.

 

In Colombia, I try to identify five candidates to potentially join me as co-founders of craftofcolumbia.com, aiming to further boost "Made in Colombia." Drawing on years of study and experience, I firmly believe that the key to boosting Colombia's exports, or any country's for that matter, lies in providing flexible funds to small and medium-sized factories and companies. Such funds would give them the necessary lift to accept qualified overseas orders with the support of insurance and financial backing, enabling them to freely take on orders, procure materials, and bridge operational costs. By allowing them to focus on production, the Craft of Colombia platform would play a crucial role in raising funds and supporting exporters one by one, ultimately enhancing Colombia's reputation for high-quality craftsmanship. This move could serve as a great solution for both the people and the country, eventually boosting enough economic energy to propel the country to the next level and overcome its current stagnation.

 

The simple truth is that by keeping manufacturing jobs local, workers' income can circulate in the consumer market, fostering sustainable purchasing power and driving economic growth at a local level. This positive cycle contributes to a healthy economy.

 

Therefore, with a large labor force available in Latin America, it is crucial for all Latin American countries to unite and build another supply chain among themselves. If every Latin American brand commits to having 50% of their purchases made in Latin America within the next 10 years, we can envision a stable and prosperous region across Latin America. This would significantly reduce the tragic stories and dangers associated with crossing the US border, transforming immigrants into tourists rather than perpetuating the current chaos. This commitment holds immense value for all people and countries, including the United States.

 

Let us join forces and push forward with our commitment to "Made in Latin America." Progress starts with taking the first step and moving forward together!

 

Pan Pan

Founder

2510.ORG

Commit to Made in Latin America