ADS 225 Investment Promotion Consultancy

Analysis and Strategic Review of ADS 225 Implications for Investment Promotion

We are searching for an experienced consultant in ADS 225 analysis for investment in Central America.

Primary Duties and Responsibilities: 

I. BACKGROUND

The USAID – Regional Trade and Investment Project (RTIP) is a 5-year, broad-reaching project to be implemented in El Salvador, Honduras, and Guatemala to reduce regional trade time and costs and to increase access to finance and investment in regional productive capacity.

A core objective of the RTIP is to develop a regional strategy for promoting Foreign Direct Investment in El Salvador, Honduras, and Guatemala, and an investment pipeline focused on nearshoring market trends, job creation, and the integration of regional value chains while strengthening the private sector as an engine of growth to reduce poverty, improve living conditions, and create sustainable economic opportunity for the Northern Triangle in Central America.

RTIP will cultivate alliances between public, private, and civil society stakeholders, emphasizing an enabling ecosystem for innovation and entrepreneurship. The Project will play a key role in creating jobs and facilitating investment and prosperity beyond the capital cities. Among the many activities the Project is implementing to achieve these objectives is direct support to the Governments and private sectors of the Northern Triangle to promote investment into sectors that will generate economic activity and create jobs.

As a foreign assistance activity funded by the U.S. government, the Project is subject to regulations prohibiting aiding or supporting alliances that would “provide financial incentives and other assistance for US companies to relocate operations abroad if it is likely to result in the loss of U.S. jobs.” USAID issued operational policy ADS 225 to establish policies and procedures to ensure that USAID-funded trade and investment activities do not violate these restrictions. The policy includes descriptions of “Allowed” and “Prohibited” activities, which clearly define areas in which the Project can and cannot support. It also describes a third category, “Gray Area” activities that, while generally permitted, require an analytical review (described in ADS 225.3.1.7) to ensure that RTIP does not support prohibited activities.

Investment promotion falls under the definition of these gray area activities, and the Project has worked closely with USAID to design and plan interventions to remain well within the range of what’s permitted under ADS 225. As the RTIP is starting to implement its yearly work plan, it’s necessary to steer clear of industries that defy clear classification under ADS 225. The following sectors have been initially identified as promising potential sources of investment, and thus require an ADS 225 analysis to ensure compliance: 1. Autoparts: car harnesses, vehicle seats, safety systems (airbags, seat belts), and sensors. 2. Textile and Apparel. 3. Pharmaceutical products. 4. Electrical capacitors, tantalum and ceramic capacitors, transistors, resistors. 5. Beverage manufacturing. 6. Agroindustry products. These are to be referred to as the “targeted sectors” for this solicitation. The consultant will identify the HS codes from 4 to 6 digits.

II. GENERAL OBJECTIVE

The objective of this consultancy is to analyze one or more of the targeted sectors in the context of ADS 225 and, based on that analysis, assist the Project in developing a strategy to permissibly support the development of these industries in the Northern Triangle. The analysis should include a detailed review not only of each country´s current activity in the targeted sector but also an analysis of investment and employment trends for these industries in the United States and outsourcing markets targeted by US investors.

If, based on these analyses, it is established that investment promotion activities for these industries in El Salvador, Honduras, and Guatemala may be permissible under ADS 225, the consultancy will provide recommendations for specific activities the Project may pursue based on the region’s comparative advantages, existing investment base, and ADS 225 limitations.

As a result of this consultancy, the Project will have data and a strategic understanding of the Northern Triangle targeted sectors to A) determine whether there are permissible activities to promote investment in each sector and, B) clearly define the parameters of those activities to remain compliant with ADS 225.

III.TASKS

The Consultant will complete the following tasks under this scope of work.

A. Define data sources and parameters of the analysis

Based on the overall objectives of the consultancy and specific requirements for the tasks below, the Consultant will provide the Project with an overview of the sources and data s/he plans to use to complete the work. This should include:

a. Proposed list of third-country outsourcing markets to be used in the analysis. The Consultant will provide for Project approval a list of comparator markets to be included in the analysis. This should include countries that are already major providers of outsourcing services to the US in the target industries, and which may already be destinations for international investors seeking to serve the US market.

b. A review of primary data, secondary sources, and reports to be used in the analysis. The Consultant will list reports, existing analyses, and other third-party inputs that will be used to develop conclusions, taking into consideration the suggestions from each of the three countries’ investment promotion agency or private sector associations studies. This should include a clear indication of data and/or sources that will require purchase (i.e. international market studies, proprietary databases, etc.) and the estimated cost of requiring them.

c. Identify potential challenges or limitations to the analysis. Based on the countries and sources to be included in the analysis, the Consultant will identify any major challenges or limitations to achieving the objectives of the consultancy.

B. Analyze the targeted sector(s) in Honduras, El Salvador, and Guatemala and recent U.S. opportunities

Working with the Project and other stakeholders, the Consultant will review existing reports, analyze market data, and conduct targeted interviews (3 to 5) to develop a detailed understanding of the targeted sector in the three countries. This should include but may not be limited to the value of the particular industry and product categories being exported to the US and those that are experiencing growth. 

The analysis should also include the identification of countries and product categories that are experiencing trade restrictions from the current U.S. administration and the gap between the opportunities that the latter creates and the current direction the targeted sector industries are going.

C. Identify areas of support to promote investment in permissible activities under ADS 225

Drawing on the results of the analysis under Task A above, the Consultant will identify and describe trends in investment and employment in the three countries, the US, and other relevant markets that address the question of whether investment and employment growth in these industries competes with investment and employment in the US. This should include but may not be limited to identification of specific subsector industry activities that demonstrate:

i. Stagnant or declining growth and/or employment in the US

ii. Rising investment/growth in major outsourcing countries serving the US

iii. Both i. and ii. and an existing presence in the three countries.

D. Identify and define potential areas of support. Drawing on the results of items B and C above, the Consultant will identify areas of support and potential targeted sectors that may be permissible under ADS 225. This should include:

a. Current industry activities that do not conflict with ADS 225 requirements

b. Companies pursuing products and/or target markets allowable under ADS 225

It is important to note that, while this exercise is designed to enable the Project to work in promising sectors, these criteria should, as a priority, be designed to prevent the project from supporting activities prohibited under ADS 225.

IV. DELIVERABLES

The Consultant will complete the following deliverables.

V. LEVEL OF EFFORT AND PERIOD OF PERFORMANCE

The estimated level of effort for the work is 30 days per each targeted sector. A single consultant could produce an analysis for more than one targeted sector and discuss the level of effort accordingly. 

Required Qualifications:

• Background in economy, commerce, investments, exports, or other related subject matter from Honduras, El Salvador, and Guatemala.
• 5 to 10 years of relevant experience.
• Previous experience in ADS 225 analysis.
• Proven experience in the targeted sectors, research, trade statistics, and industry analysis in the United States as target export market and ADS 225 implications
• Proven experience in policy design. 

Our company provides equal employment opportunities (EEO) to all employees and applicants for employment without regard to race, color, religion, sex, national origin, age, disability or genetics.

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