Enhancing the Role of European SME’s in Latin American Markets

The commercial and scientific relations around mining, between the countries of Europe and America, began a very short time after the news of the Columbus trips had been given with men like Nikolaus Federmann, legal representative of the Houses Fuger and Welser, who lent money to Carlos I of Spain for the exploration of new territories. Many of those expeditions, started in 1530, were dedicated to gold mining.

Numerous Spaniards, French, Germans and English arrived in America seeking knowledge and fortune in mining[1]. The most important was Alexander von Humboldt, who from 1799 to 1805, devoted himself to exploring South America and Central America and Mexico in the company of the Frenchman Aimé Bonpland.

The Yaoundé Convention in the 1960s moved Latin America (LAC) to seek the market of the European Economic Community (EEC) and led to the Latin American Memorandum of 1966, which proposes the creation of a joint permanent commission for dialogue.

In the ‘70s, the Declaration of Buenos Aires of the CECLA (Special Commission for Latin American Coordination) reached the first non-preferential trade agreements and the UNCTAD recommendations received by the EEC in 1971 generated a first scheme of the Generalized System of Trade Preferences (SGP).

Today, the EU-LAC relationship is between important economic partners in mutually beneficial relationships, working toward the exchange of goods and services and henceforth of support for democracy and equity through the fight against poverty, for human rights and for the protection of the environment. These will be the articulating elements of the future between the two sides of the Atlantic.

The EU demand for imports from Latin America grew 13% in the first, two months of 2017, however, the United States and China control trade: 35% and 27%, respectively, leaving only 6% of the total volume at trade with the Union. All this under a significant fact: the trend was reversed and for the first time in four years, in the first quarter of 2017 the value of merchandise exports in Latin America and the Caribbean recorded an interannual expansion, which reached 17%. The policy of industrial development of China, voraciously absorbed products from Latin America, USA has been the most important trading partner by tradition and this is not surprising also by geography and affinities, but 6% of total trade Latin American, for one of the most important economic and political blocs in the world such as the European Union, seems very little and it is there where there is the possibility of improving this percentage, through an integrative effort with actors no traditional

Specifically, there is a favorable field to strengthen the EU & A exchange: that of small and medium enterprises, understanding that for this to happen, the facts mentioned by ECLAC should be remembered: [2]

  • In Latin America and the Caribbean as well as in the European Union, SMEs represent 99% of the number of companies and generate between 40% and 80% of employment.
  • In the countries of Latin America and the Caribbean, SMEs tend to be in sectors with little added value, lower wages, low quality jobs and high informality.
  • In Latin American and Caribbean countries, the wage differences between workers of different strata of company size are much wider than in European countries.
  • Latin American SMEs have a low incidence in the export structure, which contrasts sharply with the performance of European SMEs.

The EU-LAC Dialogue on raw materials (with Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay) is the most recent and current political and operational event between the EU and Latin America. It is known that information and good relations are needed between countries of the European bloc and those of Latin America. In this dialogue, the MDNP project (Mineral Development Network Platform) will provide verifiable information and offer a free digital platform, so that its users can access its content; generating information exchange in the different fields of the mining industry, which: supports the continuity in the supply of minerals and metals for the future and that this provision is stable, safe and traceable, with high quality information.

MDNP will allow the small and medium enterprises of EU & LAC to be a new side of the intercontinental relationship. In Europe, this industrial segment is the largest provider of employment, possesses experience and a solid technological base, has a high capacity for operation, being more agile and dynamic than larger companies. Its Latin American counterparts require partners with experience, dynamism and financing capacity to receive technology in mining operations and activities related to this industry.

Eduardo Chaparro A.
EU-Latin America Mineral Development Network Platform

 

[1]    La Colonia en Colombia;  http://lacoloniaeci2006.blogspot.com.co / retrieved on 2017.11.30

[2] CEPAL, ONU La Unión Europea y América Latina y el Caribe ante la nueva coyuntura económica y social; http://repositorio.cepal.org/bitstream/handle/11362/38217/S1500331_es.pdf  retrieved on 2017.12.03.