Economic mission to Latin America
From December 2 to 7, the Chamber of Commerce of the Grand Duchy of Luxembourg, organised an economic mission to Chile, Uruguay and Argentina, in order to tighten the bilateral relations between our countries. This mission has been prepared in collaboration with Luxembourg for Finance, ALFI and Film Fund Luxembourg and with the local support of the Cámara de Comercio Chileno Belgo Luxemburguesa and Mr. Juan Manuel Fuentes, Honorary Consul in Chile as well as the Belgian Economic & Trade Commissioners located respectively in Montevideo and Buenos Aires. The programme was focusing on the financial sector, the audiovisual sector and the startup ecosystem, although all members of the Luxembourg Chamber of Commerce were welcome to participate.
After one intense week, the 34 Luxembourgish participants who took part in the mission came back with many new contacts. They also discovered new business opportunities thanks to, on the one hand, the business forums that have been organised in each city, with the support of local institutions, and, on the other hand, the individual business meetings that had been pre-arranged.
The forums included a presentation of the Luxembourg economy as well as one of the economy of the host country , followed by 2 different sessions taking place in parallel: the first one about the Luxembourg Financial center moderated by Tom Theobald, Deputy CEO of Luxembourg for Finance and the second session about the audiovisual sector, moderated by Françoise Lentz, Head of Promotion and International Relations of Film Fund Luxembourg. During the finance session, panelists discussed how, thanks to its role as leading global investment fund hub and its international capital markets ecosystem, Luxembourg can be leveraged to raise capital and reach European and global investors. During the audiovisual session, local participants could discover the Luxembourgish audiovisual sector and of its counterpart in the host country.
Each seminar gathered between 100 and 150 guests and almost 200 meetings were arranged in total for 14 Luxembourgish companies/institutions. In addition, two official receptions have been organised, with the support of the local Belgian Embassies[1] in Santiago and Buenos Aires, to which Luxembourgish participants could invite business partners and prospects. Also, in order to spread the word and promote the economic mission as well as the Luxembourg Trade and Invest platform, dedicated to the economic promotion of Luxembourg, a social media campaign was deployed on Twitter and linkedin, using the #LUmission2LATAM. The new promotional movie “A quick look at Luxembourg” has also been translated into Spanish for the occasion.
The programme started in Chile, which is a safe place to do business, as confirmed by risk ratings agencies. Its competitive edge and solid economic foundation makes Chile OECD’s first and only South American economy.
The links between Chile and Luxembourg are excellent. After Brazil, Chile is the second largest economic partner of Luxembourg in South America. With a total amount of 199.5 millions EUR in 2017, the volume of exchanges of goods and services competes with the volume of exchanges Luxembourg has with Mexico. Most of the exchanges are services (95%) and mostly financial services (80%), although some famous Luxembourgish industrial companies are present in Chile, such as Dupont de Nemours, Paul Wurth, or ArcelorMittal.
Despite the huge geographical distance between Luxembourg and Chile, business opportunities between the world’s longest country and Luxembourg, the second-smallest country in the European Union, are various, among others in the field of finance (80% of Chilean pension funds are domiciled in Luxembourg) but also in the audiovisual sector. Even if the Chilean audiovisual sector is not as important as the Argentinian (the most important in the region), it is a growing sector, part of the creative industries which has been in the focus of ProChile, the Chilean government’s export promotion bureau for a few years. Creative industries have one fastest growth worldwide, increasing by 10,8% per year during the period 2002 to 2011. The value generated by Chile's creative industries is estimated to amount to 2.2% of GDP (2013), 1.6% higher than in 2010 (the National Council of Culture and the Arts, CNCA, 2016). In Chile this sector comprises more than 30,000 companies, 3% of the national total.
Chile also features a growing startup community, since the government wants to make Chile one of the leaders in innovation in the Latam region and has fixed as a new goal in 2015 to help startups to reach out globally from Chile. Luxembourg could well be their hub to enter the European market and that was one of the topics covered in the delivered presentations. During the “Luxembourg-Chile Business Forum”, the Chamber of Commerce of Santiago and the Luxembourg Chamber of Commerce signed a Memorandum of Understanding. This MoU aims at strengthening the partnership between the 2 institutions.
In the evening, participants has the opportunity to taste the famous Chilean drink “pisco sour” and network with high level guests during the official reception organised at the Residence of the newly appointed Belgian Ambassador, Geert Criel. On the second day, in parallel with the business meetings, a part of the delegation paid a visit to Start up Chile, the oldest and most important public incubator in Chile, created 8 years ago.
The mission continued in Montevideo, capital of Uruguay, the second smallest country of South America, after Suriname. Uruguay is a reliable country to do business with, located in one of the most economically attractive regions in the world. It offers a favorable business climate with social and political stability. The country has a BBB investment grade ratings and investors usually distinguish Uruguay´s world class telecom infrastructure and excellent quality of life. Uruguay´s attractive tax system for services exports, including free trade zones, investment law, free port and airport; qualified and multilingual talent (Spanish, English, and Portuguese); competitive costs, as well as its regional trade agreements make it one of the best Latin America's business gateways. Some people even regard Luxembourg as “The Uruguay of Europe”.
Like Uruguay, Luxembourg presents itself as a gateway of choice, explained Fiorella Bafundo, Business Services Specialist of Uruguay XXI in her presentation. Like Uruguay, surrounded by larger Countries Argentina and Brazil and offering a high quality of life, Luxembourg lays between France, Germany and also spotlights one of the highest level of quality of life. There are obvious similarities between both countries that were highlighted during the seminar, as well as many possibilities of cooperation, notably in the field of the audiovisual production. Film Fund Luxembourg and the Instituto Nacional del Cine y el Audiovisual Uruguayo (ICAU) will study the possibility of signing a cooperation agreement.
Both Universities have also recently signed a framework agreement for the exchange of students and a convention in the field of social security. On top of that, , a non-double taxation treaty was signed in 2015, that entered into force in January 2017. Since then, Luxembourg’s exports of services (especially financial) have grown a lot. In the meantime, imports from Uruguay have grown more than twentyfold between 2013 and 2016! Compared to the exchanges with larger countries like Brazil and Mexico, of course, the volume remains limited but the trend is very encouraging. The seminar’s goal was to build on this trend andfurther strengthen exchanges and collaborations between Luxembourg and Uruguay. An Uruguayan delegation from the audiovisual sector might come for a visit in Luxembourg in June 2019.
Finally, the mission ended in Buenos Aires, capital of Argentina, the eighth largest country in the world and the third largest economy in Latin America, with a GDP of 922.1 billion USD and 44 million inhabitants. Due to the high qualification of its workforce, it also has the 3rd highest GDP per capita in Latin America. The country is a founding member of Mercosur, South America's most important trade bloc, and a G-20 member. The latest G-20 meeting just finished a few days before the delegation arrived.
It was the first time that a multisectoral Luxembourgish business delegation had visited Argentina. On a political level, there were already some high-level meetings, but on a business level, this was a first. Argentina is currently only the 91st partner of Luxembourg in terms of bilateral exchanges, which is way below the potential of the country, considering the size of the Argentinian market. Looking at the bilateral trade between Luxembourg and South America, the first partners are Brazil, Chile, Colombia, Ecuador and only then comes Argentina (with 88.7 million EUR), just before Uruguay (with 88,5 million EUR) which market size is significantly smaller. Even though, there are still some important macroeconomic imbalances to be tackled - the Macri administration had inherited a complex situation which was not easy to manage - important structural reforms have been introduced to liberalise trade and attract investment flows.
During the seminar, Francisco Uranga, General Director of Investments at the Argentina Investment & Trade Promotion Agency has presented more into details all the specific measures that have been implemented by the Argentinian government to improve the business climate and attract foreign investors, highlighting the advantages of the country in many sectors, among others in oil & gas, mining, infrastructure, renewable energy, tourism, agribusiness, manufacturing and services.
During the finance session, panelists discussed how thanks to its role as leading global investment fund hub and its international capital markets ecosystem, Luxembourg can be leveraged to raise capital and reach European and global investors from Argentina. In parallel, participants of the audiovisual sector session could explore ways to cooperate in the future. The Argentinian audiovisual industries are gaining a strong reputation worldwide. A new generation of talented young film directors is attracting international interest, and so do the skilled country’s authors, actors and producers. The animation industry is booming in the country with numerous animation production companies entering the market.
In that context, Argentina is organising a film festival called Ventana Sur, which is the most important outlet for audiovisual contents in Latin America that gathers in the same place all the different actors from the audiovisual industry to promote international co-production, financing and distribution of Latin American contents. The festival is taking place from 10 to 14th of December. While other Luxembourgish participants went back home on the 7th of December, Luxembourgish audiovisual companies have extended their trip in order to participate in the festival, and this is one of the reasons why the mission has been organised on that date.
The last evening of the mission ended with an official reception organised at the Residence of the Belgian Ambassador, Peter Maddens to which participants could invite business partners and prospects.
As a follow up action, the visit of a business delegation from Argentina could be organised next year, around the official State Visit of president Macri in Belgium in April.
For further information about activities of the Chamber of Commerce related to Latin America, please feel free to contact Violaine Mathurin – latinamerica@cc.lu – T: +352 42 39 39-481.
[1] The Grand Duchy of Luxembourg does not have its own diplomatic representation in those countries, so following a political agreement with Belgium, our economic interest are represented by the Embassy of Belgium on the spot as well as Awex, the Walloon Export Agency and Hub Brussels Invest and Export.
Una breve introducción a Luxemburgo from Luxembourg Chamber of Commerce on Vimeo.
