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1 WORKING TOGETHER TO BUILD AGRICULTURAL EXPORTS TO EUROPE
ING. LUIS RAMÓN RODRÍGUEZ, MSC.Minister of AgricultureDominican Republic
UK-CENTRAL AMERICA NEW BUSINESS OPPORTUNITIES
The SICA Region: Profile
Economic Outlook for 2014
Trade Agreements
The Role of Agricultural Sector in
SICA Economies
Value Added Agricultural Production
Exports and Imports
Business Opportunities
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.
The 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$4,721 in
2012.
Production of agricultural commodities
And tropical produce, such as fruits,
vegetables, coffee, cacao, bananas and
others.
The SICA Region: Profile
Gross National Product (GNP) of SICA Countries for 2013US$ Billions
5
Source: WEO/FMI, Octubre 2013
(*) Millardos = Billon USA
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.
The SICA Region: Profile
FMI 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
2013.
Agricultural products are expected to be a key factor in the
region´s growth.
Economic Outlook for 2014
8
Expected Market Performance:
OECD estimates price increases over the next coming years due to
slower production and stronger global demand and the growth in
China´s market.
Consumption increase in developing countries, driven by growing
populations, higher incomes, urbanization and changing in diets.
Per capita consumption is projected to expand most rapidly in Eastern
Europe, and Central Asia followed by Latin America and Asia.
Emerging economies will capture much of the trade growth, accounting
for the majority of exports of coarse grains, rice, oilseeds, vegetable oil,
sugar, beef, poultry and fish.
Economic Outlook for 2014
Total Trade Exchange of the European Union with the World - 2000/13 (in Billions of Euros)
849.7
1,101.7
1,739.4
992.7
1,23
4.3
1,682.7
0200400600800
1,0001,2001,4001,6001,8002,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Export Import
9
Source: EuroStats
Variación 2013 con 2009UE27 to World…….. +57.8%World to UE27……… +36.3%
10
DR-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
Trade Agreements
11
Central America- Dominican Republic Agreement
Signed in 1998 between Dominican Republic and Central
American countries with the exception of Panama.
• Promoted regional exchange, eliminating trade barriers and
propelling regional investment.
• Products manufactured on Tax Free Zones are not
included.
• Implemented as a bilateral agreement between Dominican
Republic and the signatory countries.
Trade Agreements
12
EPA-CARIFORUM (Dominican Republic and Belize)
Opened a bridge for trade exchange consolidating free
access to the EU market.
• Fostered trade-related cooperation issues and investment
promotion.
• Duty-free quota-free access for all products to the EU
market.
• Technical cooperation for modernization of customs
procedures and trade facilitation.
• Capacity building on procedures and international trade
standards.
Trade Agreements
13
EU-CENTRAL AMERICA
Relies on three pillars: political dialogue, cooperation, and
trade.
• Foster business and investment opportunities.
• Reinforces economic integration among the Central
American countries.
• SICA exporters have duty free access for 91% of their
products.
Trade Agreements
14
Source: EuroStats
SICA Region Share of EU Global Trade Exchange ( 2010/13)
SICA0.40%
Rest99.60%
SICA0.54%
Rest99.46%
EU global exports EU global imports
15
Agricultural production is a major contributor in the
economic development of SICA countries , ranging from
4% 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 partnerships
and FDI.
The Role of Agricultural Sector in SICA Economies
16
Source: EuroStats
Market Share of the European Union Agricultural Global Trade 2010/13 (average %)
Agri6.6%
Rest93.4%
Agri6.9%
Rest93.1%
Global Exports Gobal Imports
17
Source: EuroStats
Market Share of the SICA Countries Agricultural Trade with EU27
SICA0.59%
Rest99.41%
SICA3.14%
Rest96.86%
Exports UE27 to WorldImport UE27 from World
Total Trade Between EU and SICA Region - 2000/13 (000.000 Euros)
5,058.7 5,263.4
7,453.8
4,960.8 5,3
23
.9
8,425.3
0
2,000
4,000
6,000
8,000
10,000
12,0002
00
0
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
Export Import
18
Source: EuroStats
Variation 2013 to 2009UE27 to SICA…….. +41.6%SICA to UE27……… +58.2%
19
Source: Worldbank
The Role of Agricultural Sector in SICA Economies
Share of Agricultural Sector on GDP of SICA Countries
Country 2011 2012Dominican Republic 6.10% 6%Panama 3.80% 4%Belize 9.70% 13%Costa Rica 6.20% 6%Nicaragua 17.50% 20%Honduras 12.80% 15%El Salvador 10.50% 12%Guatemala 13% 12%
20
DOM CRI HON GUA ESA NIC BEL PAN0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
58.45%
25.58%
87.85%95.19%
70.01%
83.94%
96.43%
35.67%
Market Share of Agricultural Goods in the Imports of UE 27 from SICA Region 2013 (%)
Fuente: EuroStats
21
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.
The Role of Agricultural Sector in SICA Economies
22
Regional agricultural development is lead by the Central
America Agricultural Council (CAC), a body of the
SICA that joins all the Agricultural Ministers under the
Protocol of Guatemala.
Role: spearhead and promote integration of the region’s
agricultural sector.
CAC scope of actions
1. Climate change and risk management
2. Farm agriculture
3. Rural Development
4. Sanitary and safety procedures
5. Technology, information and innovation
6. Competitiveness, trade and agribusiness
7. Food security and nutrition
The Role of Agricultural Sector in SICA Economies
Source: EuroStats
23
• Competitive advantages in the agricultural value-chain.• Certified organic production.• Most organic farming produced under a fair trade model
for sustainable development of agribusiness
• Dominican Republic: largest global exporter of organic banana, organic cocoa, mango, coffee and vegetables
• Costa Rica: Banano, pineapple, coffee and cocoa.• Guatemala: Internationally known for organic coffee
exports• El Salvador: Fresh vegetables.
The Role of Agricultural Sector in SICA Economies
24
• The 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.
Exports and Imports
25
Source: EuroStats
Total Trade Between EU and SICA Region - 2000/13 (000.000 Euros)
EU Exports EU Imports
EU Exports: Euros 7,453.8 mo.EU Imports: Euros 8,425.2 mo.
26
Source: EuroStats
Trade of Agricultural Goods Between EU and SICA Region - 2000/13 (000.000 Euros)
Variation 2013 to 2009UE27 to SICA…….. +66.5%SICA to UE27……… +24.7%
(*) Agriculture= HS 01 to 24
27
Source: EuroStats
Export and Import of Markets in the European Union with 27 Countries of SICA
Export UE27 Import UE27
Export UE27 = Euros 711.4 mm.Import UE27 = Euros 3,717.5 mm.
Trade of Agricultural Goods between EU and Individual SICA Countries in 2013 (000.000 Euros)
214.
0
73.8
51.0 78
.7
51.1
20.1
11.2
211.
4
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
DOM CRI HON GUA ESA NIC BEL PAN
Export Import
Export UE27 = Euros 711.4 mo.
28
Source: EuroStats
29
Average % of EU Imports of Fruits, Coffee, Tea and Species - 2010/13
SICA10.50%
World 89.50%
SICA10.40%
World 89.60%
Fruits Imports :15.090 billion EUR Coffee, tea and species Imports: 9.033 billion EUR
Source: EuroStats
30
Average % of EU Imports of Ornamental Plants, Flowers and Tobacco - 2010/13
SICA2.84
%
Rest97.16
%
SICA2.75
%
Rest97.25
%
Plants and flowers Import: 1.532 mm EUR Tobacco Imports: 2.591 mm EUR
Source: EuroStats
31
The SICA region is determined to boost its competitive
advantages 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.
Business Opportunities
32
• Investment opportunities are supported by demands from the expansion and diversification of its economies such as:
• Farm inputs and related technologies for agribusiness• Animal 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 perishable • Distribution services on European Union markets for
export products. • Renewable energy and wastewater treatment plants
Business Opportunities
33
Ecological Profile
The clean energy sector in SICA region is expanding.
The region’s natural resources offer potential for the development of
marine, solar, geothermal, wind and bio power generation and several
projects are already underway
• Costa Rica has no registration requirements or project approval
processes for new investments. No specific limitations are applicable to
foreign investments. • In general Costa Rica does not have any special laws governing
foreign investments. • Its free zone industry is under the Free Zone Regime Law that
provides benefits and incentives on raw materials, machinery and
equipment for certain types of vehicles.
Business Opportunities
34
Dominican Republic legal framework offers incentives and guarantees for investments in
several 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 (108 -10) 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.
Business Opportunities
35
• 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.
Business Opportunities
36
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 2001.
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.
Business Opportunities
37
THANK YOU !!!!!!