1 Presentation title - edit in the Master slide

6 September 2019

Her Majesty’s Trade Commissioner

for Latin America & Caribbean

presentation to The Whitehall

Industry Group

2

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

3

Economic context

Macroeconomic Overview

Short term and long term forecasts for regional economic

growth, with LatAC expected to grow by 0.6% in 2019 and

2.3% in 2020 [IMF], and Mexico set to join Brazil as a top

ten global economy by the end of the next decade [PWC].

But long term challenges remain, primarily poverty

reduction, climate change mitigation and a need to improve

productivity.

Trade and Investment Relationship

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

potential.

Import demand in the region is rising and forecast to grow

above the world average. Our market share for goods

exports to Latin America and the Caribbean (0.8%) is below

our European comparators (Germany, 4%), and compares

poorly against our market share in other regions (average

2.2%, see fig 2). We perform better in the region on services

(3.1% share), but this again compares poorly against our

share of services exports to other regions (average 7.3%)

Extractives account for 50% of the UK’s publicly announced

green field Overseas Direct Investment capital expenditure

in the region. Several trends suggest LatAC Foreign Direct

Investment in the UK may increase (see fig 1), not least

growing demand for technology and financial services, and

generational increases in English fluency.

2. UK Goods Exports: Market Share by HMTC region(UN Comtrade)

0

5

10

15

20

25

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

20

17

20

18

UK

FD

I fro

m L

atin

A

mer

ica

& C

arib

bea

n

1. No. of greenfield FDI projects from LatAC to UK(DIT Analysis of FDI Markets, 2019)

World

Europe

1.0%LatAC

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2013 2014 2015 2016 2017

World

Africa

Asia Pacific

China &Hong KongEECAN

Europe

LatAC

MEAP

NorthAmericaSouth Asia

4

Opportunities and Challenges

Opportunities

Growth

The Latin American and

the Caribbean economy

is growing (see previous

slide) and the region’s

demand for foreign

goods and services is

forecast to grow above

the world average.

Low penetration

There appears to be

significant potential for the

UK to grow its exports to

Latin America and the

Caribbean. The UK’s

market share of exports to

the region is below our

European comparators.

Moreover, our market

share for goods and

services is higher in all but

one other overseas region

(see previous slide).

Middle class

Following a decade of

progress, Latin America

and the Caribbean’s

middleclass has

surpassed 150 million

people (Inter-American

Development Bank,

2014), driving up

appetite for goods and

services where the UK is

globally competitive, and

demand for improved

infrastructure.

Climate ambition

The UK and Latin

America and the

Caribbean have a shared

ambition on tackling

climate change. Chile will

host COP25 in December.

The UK spends a large

proportion of it’s ODA in

the region through the

International Climate

Fund (£239m). There is

growing demand for UK

expertise to fuel green

growth in the region.

Challenges

Lack of understanding

Among UK business,

there is a broad lack of

awareness both of the

business opportunities

in Latin America and the

Caribbean and how to

pursue them. Of the

nine HMTC Overseas

Regions, Latin America

and the Caribbean

receives the least UK

Exports (£13.9bn p.a.)

Business Environment

While markets in the

region are not straight

forward – Brazil still lies

outside of the top 100 in

the World Bank’s Ease

of Doing Business

ranking – perception of

these challenges among

British business is often

exaggerated, especially

when compared to other

overseas regions.

Global Competition

In 15 years, China has

become LatAC’s major

trading partner, with

bilateral trade reaching

$271bn in 2017 and an

ambition for FDI stocks

to reach $250bn by

2025. Anecdotally, we

know that Canada is

stepping up its trade

promotion presence in

the region.

Investor Uncertainty

Continued uncertainty

around EU Exit and the

UK’s future relationship

with the EU remains a

challenge.

5

DIT 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

Overseas Territories (Falkland Islands,

Cayman Islands, British Virgin Islands,

Anguilla, Montserrat, Turks and Caicos

Islands)132 staff

19 DIT markets‡

MOD briefing map of “Central and South America”

6

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.

7

2. 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…

8

Opportunities for UK companiesOpportunities in

2019/20

Bra

zil

Mexic

o

Arg

en

tin

a

Ch

ile

Co

lom

bia

Peru

Ce

ntr

al

Am

eri

ca

Cari

bb

ean

Uru

gu

ay

Ecu

ad

or

Ven

ezu

ela

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

9

3. 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.

10

4. 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.

11

LATAC - Market headline activities in the UK

xxLATAC in UK

2019

Headline activity Notes / Priorities

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

12

LATAC - Sector headline activities in the UK

xxLATAC in UK

2019

Headline activity Notes / Priorities

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

13

EcosystemIndicative only (eg. circa 30 LatAC Embassies/HCs in the UK)

14

.

15

. LATAC activities in the UK

16

Connect

www.great.gov.uk

Twitter:

@tradegovukLatAm

@joannacrellin

LinkedIn:

Joanna Crellin

George Middleton

Email:

DIT.LatAC@mobile.trade.gov.uk

17 Presentation title - edit in the Master slide

6 September 2019

Her Majesty’s Trade Commissioner

for Latin America & Caribbean

presentation to The Whitehall

Industry Group