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EU-LAC Foundation's initiatives for Central and Eastern Europe in Warsaw

2014-05-13

Trade between Latin America and the Caribbean with the countries of Central and Eastern Europe has a "very low" importance in the global context, but experiences an upward growth, according to the study "Latin America, the Caribbean and Central and Eastern Europe: Potential for the economic exchange" published and commissioned by the EU-LAC Foundation.

The study launched this Monday 12th May 2014 at The University of Warsaw with the presence of the Dorota Ostrowska-Cobas from the Cabinet of the President of Poland, the president of the University and the president of the Foundation, Benita Ferrero-Waldner, who argues that, despite the "many obstacles" that hold back trade, trade between the two regions increased fivefold in 2012 compared to 2000, reaching 13,620 million dollars.

Brazil, Mexico, Argentina, Chile, Colombia and Peru are, in that order, the Latin American countries with the largest presence in the markets of Central and Eastern Europe, while rough exports and investments coming to Latin America and the Caribbean from this area of Europe come from Poland, Czech Republic and Romania.

The authors of the study argue that, despite the renewed interest in Latin America and vice versa, the numbers are scarce, and they quote, among other examples, the case of Brazil, whose trade with the countries of Central and Eastern Europe scraped only 1.03 percent of the total in 2000-12, and Poland, who devoted to Latin America and the Caribbean only 1.08 percent of its total trade.

The study, which includes the latest statistics, reveals that the pattern of trade is highly diversified, but that it responds to the classic pattern of export of raw materials, agricultural products, mining and manufacturing with little added value.

The exception to this rule comes from Mexico, that exports mainly electrical components, car parts, information technology and spirits - and, occasionally, from Brazil, through Embraer, the third most important aerospace company in the world.

The study devotes a special chapter to the evolution of direct investments to conclude that "we are in a stage of exploration and with enormous potentials for its growth and development" from an inter-regional flow even lower than the trade.

Mexican companies like CEMEX, with more than 800 employees in Hungary, or NEMK, global leader in production of the plant aluminium injections Czech Republic, Poland and Hungary did not pass unnoticed by the authors of the study.

In the diverse direction, Polish chemical factory Selena stands out, with a production centre in Panama, the Hungarian pharmaceutical Richter Gedeon, Romanian Astra Asigurari, Slovenian Hidria Perles and KGHM Polska Miedz, investing around 3,000 million dollars in Chile in 2012.

Also relevant, though not counted as relations between Latin America and Central and Eastern Europe - are the global value chains that intertwine companies on both sides of the Atlantic as Volkswagen, with plants that complement each other in Argentina, Brazil, Mexico, Poland, Hungary, Czech Republic and Slovakia.

But despite the successful stories that were mentioned, authors of the study stress the need to foster economic exchange between both regions and take advantage of their full potential with the initiatives that, among others, would allow the dismantling of the administrative barriers, bureaucracy, and reduction in costs.

“Updating of Association Agreements between the EU and Latin America and Caribbean, would remove many of the obstacles to economic exchange between the two regions, while the liberation is essential to enhance the productive chaining of large enterprises and to facilitate exchanges between the SMEs.”, they suggest.

The study was conducted by the CIDOB, IWE and ECSA institutions, joined later by the researchers from the Polish Institute of International Affairs (PISM), and will be launched at the University of Warsaw.

The official presentation of the paper included a debate between researchers and practitioners from Europe and Latin America. 

The following day the EU-LAC Foundation co-organised a seminar with the think-tank PISM from Poland: “Latin America & the Caribbean – Central & Eastern Europe: Exploring Possibilities for Cooperation”

The seminar counted with the participation of the Presidents of PISM Marcin Zaborowski, and the EU-LAC Foundation Ferrero-Waldner, the Ministries of Foreign Affairs of Poland, Czech Republic and Hungary, the president of the Brazilian Centre of International Affairs (CEBRI), Luíz Augusto de Castro Neves, a representative of the bi-regional consortio that has has carried out the research paper, Jordi Bacaria (CIDOB); the chairman of the directive board of Inglot Cosmetics, Zbigniew Inglot and Paolo Baldan, on behalf of the Association of European Chambers of Commerce and Industry (Eurochambers) and academics from both regions.

For the summary report on the seminar, including photos, please visit the PISM website.  

To download the Study and respective annexed papers, please click here.