Her Majesty's Trade Commissioner for Latin America & Caribbean presentation to The Whitehall Industry Group - 6 September 2019
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Her Majesty’s Trade Commissioner for Latin America & Caribbean presentation to The Whitehall Industry Group 6 September 2019 1 Presentation title - edit in the Master slide
Latin America & the Caribbean (LatAC)
Region collectively equivalent to the world’s
third largest economy. Mexico forecasted join
Brazil in world’s top 10 economies by 2030
Region’s population of 630m similar to that of
the EU and most urbanized in the world (59 cities
of over 1m, therefore good for product distribution)
Chile, Peru, Colombia and Mexico are all ranked
as easier to do business in than India, South
Africa, Vietnam and Indonesia. Spanish,
Portuguese and English are three most-spoken
languages
Forecasted growth of 2.7% across region
between 2019 and 2023
In 2017 less than 1% of Latin America’s imports of
goods – and 3.4% of services – were from the UK
2
Economic context
Macroeconomic Overview
1. No. of greenfield FDI projects from LatAC to UK
Short term and long term forecasts for regional economic (DIT Analysis of FDI Markets, 2019)
growth, with LatAC expected to grow by 0.6% in 2019 and 25
America & Caribbean
2.3% in 2020 [IMF], and Mexico set to join Brazil as a top
UK FDI from Latin
20
ten global economy by the end of the next decade [PWC].
15
But long term challenges remain, primarily poverty
reduction, climate change mitigation and a need to improve 10
productivity. 5
0
Trade and Investment Relationship
2018
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
UK exports in the year to April 2019 grew by 2.5% to
£13.9bn, with services responsible for a slightly higher and
growing share (55%). However, there is considerable growth 2. UK Goods Exports: Market Share by HMTC region
(UN Comtrade)
potential.
Import demand in the region is rising and forecast to grow World
above the world average. Our market share for goods
5.0% Africa
exports to Latin America and the Caribbean (0.8%) is below
our European comparators (Germany, 4%), and compares Europe
Asia Pacific
poorly against our market share in other regions (average 4.0%
China &
2.2%, see fig 2). We perform better in the region on services Hong Kong
3.0% EECAN
(3.1% share), but this again compares poorly against our
share of services exports to other regions (average 7.3%) World
Europe
Extractives account for 50% of the UK’s publicly announced 2.0%
LatAC
green field Overseas Direct Investment capital expenditure
1.0% 1.0% MEAP
in the region. Several trends suggest LatAC Foreign Direct LatAC
Investment in the UK may increase (see fig 1), not least North
0.0% America
growing demand for technology and financial services, and South Asia
2013 2014 2015 2016 2017
3 generational increases in English fluency.
Opportunities and Challenges
Growth Middle class Low penetration Climate ambition
The Latin American and Following a decade of There appears to be The UK and Latin
the Caribbean economy progress, Latin America significant potential for the America and the
is growing (see previous and the Caribbean’s UK to grow its exports to Caribbean have a shared
slide) and the region’s middleclass has Latin America and the ambition on tackling
demand for foreign surpassed 150 million Caribbean. The UK’s climate change. Chile will
Opportunities goods and services is people (Inter-American market share of exports to host COP25 in December.
the region is below our The UK spends a large
forecast to grow above Development Bank,
European comparators. proportion of it’s ODA in
the world average. 2014), driving up
Moreover, our market the region through the
appetite for goods and
share for goods and International Climate
services where the UK is Fund (£239m). There is
services is higher in all but
globally competitive, and growing demand for UK
one other overseas region
demand for improved (see previous slide). expertise to fuel green
infrastructure. growth in the region.
Lack of understanding Business Environment Global Competition Investor Uncertainty
Among UK business, While markets in the In 15 years, China has Continued uncertainty
there is a broad lack of region are not straight become LatAC’s major around EU Exit and the
awareness both of the forward – Brazil still lies trading partner, with UK’s future relationship
business opportunities outside of the top 100 in bilateral trade reaching with the EU remains a
in Latin America and the the World Bank’s Ease $271bn in 2017 and an challenge.
Challenges Caribbean and how to of Doing Business ambition for FDI stocks
pursue them. Of the ranking – perception of to reach $250bn by
nine HMTC Overseas these challenges among 2025. Anecdotally, we
Regions, Latin America British business is often know that Canada is
and the Caribbean exaggerated, especially stepping up its trade
receives the least UK when compared to other promotion presence in
Exports (£13.9bn p.a.) overseas regions. the region.
4DIT LatAC Regional Plan
Strategic goal: Strengthen the UK’s absolute and relative trade and investment relationship with LATAC over the next five
years (2018-23) – growing exports, ODI and FDI, and building the optimal trading environment to facilitate a stronger trade
relationship in the future.
Aim 1 – Trade Policy Open markets and support trade
liberalisation in the region, developing trade policy and
encouraging greater alignment across the HMG
Aim 2 – Trade Support Support UK companies to do
business in the region, and work to reduce market access
barriers that inhibit them from doing so.
Aim 3 – FDI Support Increase the flow of investment from
the region to the UK.
Aim 4 – Promotion Increase UK companies’ knowledge and
understanding of the region as a business destination, and
equally update the perception in the region of the UK as a
place to do with business with and from.
‡ No DIT presence in further 13
sovereign states and 6 British
19 DIT markets ‡ Overseas Territories (Falkland Islands,
Cayman Islands, British Virgin Islands,
Anguilla, Montserrat, Turks and Caicos
132 staff Islands)
5 MOD briefing map of “Central and South America”1. Trade Policy – 2019/2020 Goals
OBJECTIVES
1. Support markets in the region to be increasingly prosperous.
2. Opening markets to UK businesses and ensuring continuity of access after Brexit.
3. Promote the international rules based system, supporting multilateralism and a rules-based
system with the WTO as the cornerstone.
62. Trade Support – 2019/2020 Goals
OBJECTIVES
1. Deliver campaigns in 12 sectors*, which all combine traditional export support, ODI support
and tackling Market Access barriers.
2. Leading with finance, deploying UK Export Finance to support major opportunities, potentially
for UK corsortia or via Government to Government agreement. Deepening ties and partnerships
with financial services sector and harnessing the power of London as a global financial centre.
3. Strategic account management, offering a bespoke account management service to the UK’s
20 largest exporters and investors in the region, and the share of UK companies within their
supply chain.
4. Embed LatAC Enquiry Hub to ensure all interested British companies are signposted to
relevant and proportionate export support in the public and private sector.
*See next slide…
7OpportunitiesOpportunities
in for UK companies
Caribbean
Venezuela
Argentina
Colombia
Uruguay
Ecuador
America
Central
Mexico
2019/20
Brazil
Chile
Peru
Financial & Professional Services o o o o o
Energy (O&G and Renewables) o o o o o
Infrastructure o o o o o o o o o o
Marine o
Mining o o o o o o o
Life Sciences / Healthcare o o o o o o o o
Auto & Advanced Engineering o o o
Global Sports Economy o o
Food & Drink o o o o o
Education o o o o o
Security o o o o o o o o o
83. FDI Support – 2019/2020 Goals
OBJECTIVES
1. Refocus our investment strategy towards medium-large privately owned companies and
provide them with ongoing advice and support.
2. Explore the LatAC strength on start-ups and scale-ups by promoting the UK offer to key
players in the ecosystem.
3. Build on the Industrial Strategy to focus on the sectors where LatAC can match UK’s
interests, such as artificial intelligence, data, augmented and virtual reality, Fintech, life
sciences, edu-tech, green growth and agri-tech.
4. Build on LatAC Investors Club launch to deliver a good service level in our aftercare to all
170+ existing investors.
94. Promotion – 2019/2020 Goals
OBJECTIVES
1. Increase the number UK companies engaged with this region and help broaden and deepen
their understanding.
2. Modernise the perception of the UK in LatAC, promoting our creativity and innovation.
3. Showcase the UK’s unique strengths as a destination for FDI, reinforcing our openness to
investment as we leave the EU.
4. Champion free trade and UK trade values, underpinning our trade continuity work.
10LATAC - Market headline activities in the UK
Headline activity Notes / Priorities
LATAC in UK
xx
2019
Peru 25-26 February Infrastructure AND F&P Services – w COL
LATAC Opportunities Roadshow W/c 25 March All markets – at least 5 cities in 5 days
Caribbean 2 April With Caribbean Council
Argentina 20-24 May UK mission & events. See sectors on Opportunities slide
Colombia 17-27 June Infrastructure, Energy and F&P Services – with partners
Chile 10-12 September With partners. See sectors on Opportunities slide
Uruguay 16-20 September With partners. See sectors on Opportunities slide
Brazil TBC See sectors on Opportunities slide
Costa Rica 15-18 October See sectors on Opportunities slide
Dominican Republic 17-24 October With partners. See sectors on Opportunities slide
Mexico 6-8 November With partners. See sectors on Opportunities slide
LATAC Opportunities Roadshow February or March 2020 TBC With LATIA and partners. All markets – at least 5 cities in 5 days
Central America TBC See sectors on Opportunities slide
11LATAC - Sector headline activities in the UK
Headline activity Notes / Priorities
LATAC in UK
xx
2019
Infrastructure – Canning Conference 21 May With CH. See markets on Opportunities slide
Oil & Gas – Offshore Europe 3-6 September See markets on Opportunities slide
Adv Eng & Auto – LCV Exhibition 4-5 September See markets on Opportunities slide
Life Sci – Health & Care Expo 4-5 September See markets on Opportunities slide
Marine – International Shipping 9-13 September Brazil
Defence – DSEI 10-13 September See markets on Opportunities slide
FPS – Cann House and CoL event 24 September See markets on Opportunities slide
Food & Drink – Pre-ANUGA event 3 October See markets on Opportunities slide
Mining – London Metal Exchange 28 October - 1 November See markets on Opportunities slide
Education – Bett Show 22-25 January See markets on Opportunities slide
Oil & Gas – Subsea Expo 11-13 February See markets on Opportunities slide
12Ecosystem
Indicative only (eg. circa 30 LatAC Embassies/HCs in the UK)
13.
14. LATAC activities in the UK
15Connect
www.great.gov.uk
Twitter:
@tradegovukLatAm
@joannacrellin
LinkedIn:
Joanna Crellin
George Middleton
Email:
DIT.LatAC@mobile.trade.gov.uk
16Her Majesty’s Trade Commissioner for Latin America & Caribbean presentation to The Whitehall Industry Group 6 September 2019 17 Presentation title - edit in the Master slide
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