By Pedro Moitinho de Almeida
Former ambassador of Portugal
Portugal is currently undergoing an economic adjustment program, that is steering the economy on a path of recovery. With assistance from the IMF, EU and ECB (the Troika), a balanced program has been implemented, with the goal of promoting reforms to increase competitiveness and boost economic growth and to achieve fiscal consolidation, reduce public debt and ensure financial stability. We are meeting our targets and the positive Troika reports on our performance attest to the significant progress already achieved. It was encouraging when Portugal recently successfully returned to the financial markets and placed 2.5 billion euros of five-year bonds, primarily to international investors (more than 90 percent), at an average yield of close to 5 percent.
The EU, for obvious reasons, is our main trading partner, but we also sell goods to all continents. Much like Canada, we are committed to diversifying our markets and trade with non-EU partners is gaining strength.
Portugal’s centuries-old historical connections with countries in Africa, Asia and Latin America, and the nearly 300 million people in the Portuguese-speaking world, make my country a gateway to those markets. The soon-to-be-concluded CETA agreement will create even more potential for Canadian companies to explore our location. By the same token, we look forward to the Comprehensive Economic and Trade Agreement boosting Portuguese exports and investments into Canada.
Canada and Portugal have a long-established relationship rooted in history, after Portuguese navigators came to Newfoundland and Nova Scotia in the 16th Century. Today, Canada has a vibrant and well-established Portuguese-Canadian community of more than 500,000.
Trade between the two countries is relatively small, but there is potential for growth. In 2011, Portugal’s exports of goods to Canada reached $357.5 million, and imports from Canada amounted to $225.4 million. Data for 2012 (January-November) show a slight drop, with exports close to $293 million and imports from Canada a little more than $120 million.
Portugal exports Port and table wines, iron and steel, mineral fuels and oils, motor vehicles, cork, footwear, electric/electronic equipment, machinery and mechanical equipment, apparel and twine/cordage/ropes to Canada.
From Canada, we buy agricultural goods, newsprint, aircraft equipment, machinery, metal products, pharmaceuticals and other goods.
Bilateral trade in services has seen growth. According to Portuguese statistics, in 2011 bilateral trade in services amounted to more than $348 million, with the tourism sector being the major contributor.
On the investment front, the numbers are relatively small. Still, the largest particleboard panel manufacturer in North America, Tafisa, is part of Soane Group, an important company in Portugal. In addition, Altitude Software, Martifer Solar, EDP Renewables, Logoplaste, ImatosGil and Cotesi have all established local operations in Canada.
Portugal has become an attractive location for Canadian investment, particularly in mining. Key Canadian companies have mining operations in Portugal and this industry could attract additional investment. To that end, a mining delegation will again participated in the prestigious PDAC (Prospectors & Developers Association of Canada) show in Toronto in March. Within the energy sector, we are excited about possibilities for oil and natural gas exploration in Central Portugal. A number of Canadian companies are already partners in this venture.
Portugal today has a favourable investment environment with new measures that include regulations to boost labour flexibility, a simplified administrative process, reduced corporate tax, location and logistic optimization tools and the recently announced residence permit for investment activities. This measure is complemented by a new tax regime for non-residents, which offers attractive income-tax advantages for up to a 10-year period to qualified foreign individuals wishing to establish a permanent or temporary residence in Portugal.
We are exploring possibilities in other sectors in which Canada is a major importer. Industrial machinery and equipment, plastics and furniture show good promise. We are also looking at creating opportunities for our export-oriented auto and aerospace clusters. In advanced sectors, such as biotechnology, pharmaceutical, ITCs and renewable energy, our companies are also making excellent inroads. In all these areas, we are looking to foster partnerships with Canadian businesses.
In terms of services, we see great potential for mutually beneficial developments in co-operation with our maritime ports. The Port of Sines (“The Atlantic Gateway to Europe”) is one of the few open deep-water ports in the world, equipped with shelter and berthing infrastructures, capable of receiving large-capacity vessels.
Finally, we mustn’t forget tourism. Portugal is a small country on the shores of the Atlantic. It is beautiful, friendly and offers wonderful and diverse vacation options. Whether you’re looking for history, palaces and castles, sandy beaches or wine tours along a majestic river, Portugal offers it all. To experience world-class golf courses, charming countryside towns and to escape or recover from the rigours of a Canadian winter, Portugal is your destination, topped off with mouth-watering food and fabulous wines. Come and visit.
Pedro Moitinho de Almeida is the former ambassador of Portugal. Reach the ambassador’s office at (613) 729-2922 ext. 229.