Presentation on theme: "WORKING TOGETHER TO BUILD AGRICULTURAL EXPORTS TO EUROPE"— Presentation transcript:
1WORKING TOGETHER TO BUILD AGRICULTURAL EXPORTS TO EUROPE 1WORKING TOGETHER TO BUILD AGRICULTURAL EXPORTS TO EUROPEUK-CENTRAL AMERICA NEW BUSINESS OPPORTUNITIESING. LUIS RAMÓN RODRÍGUEZ, MSC. Minister of Agriculture Dominican Republic
2The SICA Region: Profile Economic Outlook for 2014Trade AgreementsThe Role of Agricultural Sector inSICA EconomiesValue Added Agricultural ProductionExports and ImportsBusiness Opportunities
3The SICA Region: Profile The SICA region is comprised by the seven countries of Central America (Belize, El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, Panamá) and Dominican Republic, that holds the Pro-Tempore Presidency for the first semester of 2014.
4The SICA Region: Profile Population: 52 million GDP of US$417Bn in 2013 Average Gross National Income grew from US$4,360 in 2011 to US$4,721 in Production of agricultural commodities And tropical produce, such as fruits, vegetables, coffee, cacao, bananas and others.
5Gross National Product (GNP) of SICA Countries for 2013 US$ Billions (*) Millardos = Billon USASource: WEO/FMI, Octubre 2013
6The SICA Region: Profile A bridge between South America and the European Union; a door to the North American market through the DR-CAFTA; rising intercontinental trading with the expansion of the Panama canal; strategic Location; trade logistics infrastructure: hubs and warehousing committed to move forward regional integration for sound economic development and trade competitiveness.
7Economic Outlook for 2014FMI estimates a global growth of 3.7% for 2014 FMI growth projections for SICA region is 3.9%. Trade exchange is projected to rise to 4.5% from a 2.7% in Agricultural products are expected to be a key factor in the region´s growth.
8Expected Market Performance: Economic Outlook for 2014Expected Market Performance:OECD estimates price increases over the next coming years due toslower production and stronger global demand and the growth inChina´s market.Consumption increase in developing countries, driven by growingpopulations, higher incomes, urbanization and changing in diets.Per capita consumption is projected to expand most rapidly in EasternEurope, and Central Asia followed by Latin America and Asia.Emerging economies will capture much of the trade growth, accountingfor the majority of exports of coarse grains, rice, oilseeds, vegetable oil,sugar, beef, poultry and fish.
9Total Trade Exchange of the European Union with the World - 2000/13 (in Billions of Euros) Variación 2013 con 2009UE27 to World…… %World to UE27……… +36.3%Source: EuroStats
10Trade AgreementsDR-CAFTA Changed the pace of economic development of the region by:Strengthened and diversified trade relations between SICA and the United States.Boosting economic growth and political cooperation between Central American states and the US.Leading reforms at the legal, infrastructure, logistics and business environment levels
11Central America- Dominican Republic Agreement Trade AgreementsCentral America- Dominican Republic AgreementSigned in 1998 between Dominican Republic and CentralAmerican countries with the exception of Panama.Promoted regional exchange, eliminating trade barriers andpropelling regional investment.Products manufactured on Tax Free Zones are notincluded.Implemented as a bilateral agreement between DominicanRepublic and the signatory countries.
12Trade Agreements EPA-CARIFORUM (Dominican Republic and Belize) Opened a bridge for trade exchange consolidating freeaccess to the EU market.Fostered trade-related cooperation issues and investmentpromotion.Duty-free quota-free access for all products to the EUmarket.Technical cooperation for modernization of customsprocedures and trade facilitation.Capacity building on procedures and international tradestandards.
13Relies on three pillars: political dialogue, cooperation, and trade. Trade AgreementsEU-CENTRAL AMERICARelies on three pillars: political dialogue, cooperation, andtrade.Foster business and investment opportunities.Reinforces economic integration among the CentralAmerican countries.SICA exporters have duty free access for 91% of theirproducts.
14SICA Region Share of EU Global Trade Exchange ( 2010/13) EU global exportsEU global importsSource: EuroStats
15The Role of Agricultural Sector in SICA Economies Agricultural production is a major contributor in theeconomic development of SICA countries , ranging from4% of GDP in Panama to 20 % in Nicaragua for 2012,with an average of 11% for the region.Common objective of the SICA Ministries of Agriculture:Improve productivity and promote competitiveness.Production planning with market oriented approach.Compliance with international food safety standards.Promote business climate for public-private partnershipsand FDI.
16Market Share of the European Union Agricultural Global Trade 2010/13 (average %) Global ExportsGobal ImportsSource: EuroStats
17Market Share of the SICA Countries Agricultural Trade with EU27 Import UE27 from WorldExports UE27 to WorldSource: EuroStats
18Total Trade Between EU and SICA Region - 2000/13 (000.000 Euros) Variation 2013 to 2009UE27 to SICA…… %SICA to UE27……… +58.2%Source: EuroStats
19Share of Agricultural Sector on GDP of SICA Countries The Role of Agricultural Sector in SICA EconomiesShare of Agricultural Sector on GDP of SICA CountriesCountry 20112012Dominican Republic6.10%6%Panama3.80%4%Belize9.70%13%Costa Rica6.20%Nicaragua17.50%20%Honduras12.80%15%El Salvador10.50%12%GuatemalaSource: Worldbank
20Market Share of Agricultural Goods in the Imports of UE 27 from SICA Region 2013 (%) Fuente: EuroStats
21The Role of Agricultural Sector in SICA Economies Areas for investment opportunities:Joint Ventures in greenhouses and fresh vegetables production.Renewable energy projects.New technologies such as greenhouse production, organic farming.Improvement in trade facilitation: Logistics, food processing and packaging, warehousing, and market access.
22The Role of Agricultural Sector in SICA Economies Regional agricultural development is lead by the CentralAmerica Agricultural Council (CAC), a body of theSICA that joins all the Agricultural Ministers under theProtocol of Guatemala.Role: spearhead and promote integration of the region’sagricultural sector.CAC scope of actionsClimate change and risk managementFarm agricultureRural DevelopmentSanitary and safety proceduresTechnology, information and innovationCompetitiveness, trade and agribusinessFood security and nutritionSource: EuroStats
23The Role of Agricultural Sector in SICA Economies Competitive advantages in the agricultural value-chain.Certified organic production.Most organic farming produced under a fair trade model for sustainable development of agribusinessDominican Republic: largest global exporter of organic banana, organic cocoa, mango, coffee and vegetablesCosta Rica: Banano, pineapple, coffee and cocoa.Guatemala: Internationally known for organic coffee exportsEl Salvador: Fresh vegetables.
24Exports and ImportsThe bulk of most Central America countries trade has been with USA and Latin America.Trade exchange between SICA countries and EU has been relatively modest until now.The most important exports from the EU to Central America are machinery and transport equipment (47.2%) and chemicals (21.5% in 2012).Principal UK exports are beverages, medicinal and pharmaceutical products, road vehicles, specialized industrial machinery, electrical machinery and miscellaneous manufactured articles.
25Total Trade Between EU and SICA Region - 2000/13 (000.000 Euros) EU ExportsEU ImportsEU Exports: Euros 7,453.8 mo.EU Imports: Euros 8,425.2 mo.Source: EuroStats
26Trade of Agricultural Goods Between EU and SICA Region - 2000/13 (000 Trade of Agricultural Goods Between EU and SICA Region /13 ( Euros)(*) Agriculture= HS 01 to 24Variation 2013 to 2009UE27 to SICA…… %SICA to UE27……… +24.7%Source: EuroStats
27Export and Import of Markets in the European Union with 27 Countries of SICA Import UE27Export UE27Export UE27 = Euros mm.Import UE27 = Euros 3,717.5 mm.Source: EuroStats
28Trade of Agricultural Goods between EU and Individual SICA Countries in 2013 (000.000 Euros) Source: EuroStats
29Average % of EU Imports of Fruits, Coffee, Tea and Species - 2010/13 Fruits Imports : billion EURCoffee, tea and species Imports: billion EURSource: EuroStats
30Plants and flowers Import: 1.532 mm EUR Tobacco Imports: 2.591 mm EUR Average % of EU Imports of Ornamental Plants, Flowers and Tobacco /13Plants and flowers Import: mm EURTobacco Imports: mm EURSource: EuroStats
31Business Opportunities The SICA region is determined to boost its competitiveadvantages of location, agricultural production and tourism.Integration policies are moving forward agricultural modernization.Tourism, manufacturing and service industries are becoming increasingly important.Mining is just in the first stages of development.The expansion of the Panama canal is opening exponential opportunities in transportation service and logistics.
32Business Opportunities Investment opportunities are supported by demands from the expansion and diversification of its economies such as:Farm inputs and related technologies for agribusinessAnimal breeding and capital intensive production processes.Development of infrastructure in roads, urban transportation systems, ports improvement, merchant marine and trade facilitation, in general.Logistics warehousing services for exports of perishableDistribution services on European Union markets for export products.Renewable energy and wastewater treatment plants
33Business Opportunities Ecological ProfileThe clean energy sector in SICA region is expanding.The region’s natural resources offer potential for the development ofmarine, solar, geothermal, wind and bio power generation and severalprojects are already underwayCosta Rica has no registration requirements or project approvalprocesses for new investments. No specific limitations are applicable toforeign investments.In general Costa Rica does not have any special laws governingIts free zone industry is under the Free Zone Regime Law thatprovides benefits and incentives on raw materials, machinery andequipment for certain types of vehicles.
34Business Opportunities Dominican Republic legal framework offers incentives and guarantees for investments inseveral sectors.Foreign investment Law and Free Trade Zones for Exports carry important incentives for investments in tourism and production/manufacturing.Housing Projects Law (189-11) is aimed at promoting real estate financing with direct incentives for low cost housing development .Renewable Energy Law (57-07) provides incentives in energy generation from renewable sources.Solar and wind farms projects are already in progress and two bio-fuel power plants will start within 2014.Film Industry Law ( ) sets up incentives for the filmmaking industry, local filmmaking production and on studio´s construction.One-stop Investment Counter is in the process of being implemented, to accelerate and streamline procedures related to national and foreign investment.
35Business Opportunities Nicaragua has various incentive laws for priority sectors, such as the Tourism Incentive Law, the Renewable Energy Incentive Law and the Free Trade Zones Law for export-oriented industries.Guatemala has a foreign investment law dating back to 1998 to promote foreign direct investment. There are no restrictions on foreign investment in the telecommunications, electrical power- generation, airline, or ground-transportation sectors.New legislation for Public Private Partnerships has been enacted to attract investments towards large-scale construction projects.
36Business Opportunities Panama has a bilateral investment agreement with the United Kingdom and has been a member of the International Centre for the Settlement of Investment Disputes (ICSID) since A particular area of opportunity for foreign investors is in the former Canal Zone and associated military bases. Panama Pacific, one of its facilities, has been singled as a special economic incentives zone for investments on the “new town” infrastructure concept.