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El Salvador Businesses Profit from Regional Trade Agreement
FrontLines - March 2010
By Angela Rucker
Rodolfo Papini shares the
same challenges as any other
business owner attempting to
make a profit in the complicated
and mercurial world of selling
goods to the masses.
“It has been an ordeal from
the beginning,” said the owner of
Pahnas, a company that produces
and sells frozen ethnic foods.
“The second year we had to
increase production. We had to
move from 100 percent manual
production to mechanized labor.
“Every year is a different
story. You have to adapt and be
very flexible.”
He said the assistance he
received from USAID’s Export
Promotion Program has been
“a blessing,” allowing him to
expand the family-run business
to markets in countries throughout
the region and U.S. supermarkets
in communities with
many Salvadorans.
The effort is linked to the
2006 Central America-Dominican
Republic-United States Free
Trade Agreement, or CAFTA/DR,
which removed some trade barriers
between Central America and
the United States.
At first, Salvadorans were not
export-minded, said Carlos
Arce, the manager of economic
growth bilateral programs at
USAID’s office in El Salvador.
The export program promotes
agriculture, and crafts people in
small and medium firms. They
get management expertise, go to
trade fairs, learn about business
promotion, and are given technical
assistance that can move their
businesses into the big time.
When CAFTA came into play,
business people here needed a
hand to get into the game. Sales
of Papini’s frozen pupusas and
tamales, for example, grew from
$200,000 in 2004 to almost $1
million last year. He now exports
to two dozen U.S. grocery stores.
He has learned about the food
safety requirements necessary to
sell his products in the United
States and was issued a certificate
by the American Institute of
Baking, which is considered a
mark of quality production.
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Tomato farmer Rodolfo Rivera examines tomato vines inside his
greenhouse. When they are ready, he will transport the tomatoes
to his largest customer, Wal-Mart.
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Since the program began in
2003, USAID has assisted
between 600 and 700 companies
to increase exports, and about
3,300 people were trained.
Products range from furniture
to aromatherapy remedies to fine
crafts to drink mixes to Paax
Muul guitars, a hand-crafted
instrument known for its quality.
El Salvador’s service sector is
also getting an assist, with promotion
for doctors, translators,
and consultants among others.
El Salvador products and services
are in demand from as far
away as Taiwan, and marquee
names like Wal-Mart and Starbucks
have put Salvadoran products
on their shelves and menu
boards.
Alternativa is another success
story. Started in 2007, the nonprofit
provides a place for artisans
to sell their wares (tripling
their square footage with a move
in December to a high-traffic
mall location), assists with
exports, and offers technical
assistance to the artisans so their
products can sell internationally.
The artisans’ work has sold at
craft shows as well, including
the Wal-Mart Crafts Festival,
said Rafael Cuellar, a project
manager for the Economic
Development Office at USAID’s
El Salvador office.
Tomato farmer Rodolfo
Rivera is a relative newcomer to
exports. In 2008, he heard on
television about a USAID initiative
to produce tomatoes in
greenhouses and took the plunge.
His first harvest—from 2,800
tomato plants—was in May of
that year. His customer: Wal-Mart
in El Salvador.
Through USAID, Rivera
learned how to meet Wal-Mart’s
quality requirements for the kinds
of tomatoes he grows, both the
larger salad tomato and the
tomato de cuisine, which is most
popular in cooking.
Rivera has had setbacks.
Wind blew the roof off his
greenhouse. And his attempts
to build and operate a second
greenhouse—so he can eventually
provide buyers with tomatoes
year-round—ran into trouble
when water seepage made
the floor unstable.
But he believes he will recoup
his investment in the near future.
All told, the export program
has helped create more than
14,000 jobs in agriculture and
handicrafts.
★
FrontLines writer Angela Rucker wrote this series of articles following a trip to El Salvador in January. All photos by Angela Rucker.
FrontLines is published
by the Bureau for Legislative and Public Affairs
U.S. Agency for International Development
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