EAEU and Latin America have identified promising areas for the development of trading
On June 24, the Eurasian Economic Commission presented the first study on the prospects for the development of cooperation between the Eurasian Economic Union and the Latin America and the Caribbean (LAC) region. The report was prepared jointly with the United Nations Economic Commission for Latin America and the Caribbean.
As EEC Minister for Integration and Macroeconomics Sergey Glazyev emphasized, the Commission has been actively working with LAC countries and integration associations for the last year and a half, but the scale of trade is still not high.
“From the very beginning, we were counting on the export of highly processed products, for mechanical engineering and high-tech products, but the market has not yet been mastered to an insignificant extent. Difficulties are primarily a consequence of geographical remoteness, high logistics costs and, as a result, weak price competitiveness of products. The EAEU in the markets of the LAC countries. The task we set is to overcome geographical barriers using modern technologies, “said Sergei Glazyev.
At present, a significant volume of trade between the EAEU and LAC is made up of Russia’s trade with Brazil, Mexico and Ecuador. In 2019, Russia accounted for 89% of the total exports of the EAEU countries to the LAC region and 93.6% of imports, which is in line with the level of previous years. The main export goods of Russia are nitrogen fertilizers and petroleum products. Kazakhstan mainly exports sulfur, and Belarus – potash fertilizers. Import is mostly represented by agricultural products. The trade of Armenia and Kyrgyzstan with the LAC countries is unstable and is due to one-off supplies.
As noted in the study, the regions have good examples of enterprise cooperation. Among them – the activities of the joint venture “KAMAZ” (Russia) and “Markopolo” (Brazil) on the assembly of buses in Neftekamsk, exploration work of the Belarusian-Ecuadorian consortium “Equaservoil” in Latin America, production of influenza vaccines by a joint Russian-Nicaraguan enterprise ” Latin American biotechnological enterprise named after Mechnikov “, delivery of IT solutions and services in Latin America by the Russian enterprise” Softline “and others.
The prospects for expanding trade, according to the authors of the study, are associated with raising the awareness of a wide range of companies and potential investors about the possibilities of the common markets of the EAEU and LAC.
Among the promising goods that can become catalysts for the growth of trade, two groups are noted. First, trade in services, in particular financial and digital services, the supply of which does not involve the physical movement of the seller or buyer. Secondly, trade in products that have no direct or competitive analogues in geographically closer countries, including specific raw materials and agricultural products (for example, palladium from the Russian Federation, coffee from LAC); cultural products (fruit liqueurs from Armenia); high value added products that are the subject of specialization of the region (jewelry of the EAEU countries).
Based on the results of the study, recommendations were also given for the development of cooperation in such areas as joint projects in the field of traditional and renewable energy, scientific and technical cooperation and tourism.