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A whole new foreign market

It looks like the current favourable conditions of the Spanish economy are showing up in its foreign trade. The latest data has exceeded all previous estimates and this euphoria has passed on to our European neighbours, who have also experienced significant growth. In this way, the differences between Spain and other EU countries regarding economic matters are becoming smaller and smaller, and at the same time, the effects of this growth in activity has produced major increases in our commercial flows with foreign countries since 2000.

Spanish exports have grown to world levels by approximately 6.3%, which means an improvement with respect to the previous year. This good performance, however, has been out-shined by the rise in imports, which have been set at 12.5%. Likewise, the international environment turned out to be more favourable as regards the recovery of flows compared to the previous year and Spain’s direct investing overseas was substantially higher. In relation to the main products exported, we must highlight the industrial sector, cars, food, alcohol and tobacco.

Prospects

In the years to come Spain must face important challenges in foreign trade, but always taking into account that, in economy, you can never reach a position and expect to remain there and that objectives can change. And this is what is happening now, as the current world situation implies new and important challenges such as the spectacular increases in international competition.

The stage looks set to highlight the growing economic strength of countries, which up to now had shown hardly any impact. This is the case of China, Brazil, Russia and Asian economies. There has also been a relevant increase in competition as regards supplying raw materials, attracting investment and products, above all manufactured products.

One of the main challenges of Spanish foreign trade is the issue of competitiveness and price. The problem lies in the fact that high intensity technological sectors only take up 7% of exports and others, such as manufacturers, who are very important for Spanish economy, will be threatened by emerging powers unless they modernise the sector. The solution lies in the development of high-tech companies and manufacturing industries. Foreign Trade can be abit of an issue as you can see.


In this context, the number of exporters plays a major role as their current percentage is still very low. The Institute of Foreign Trade (ICEX), Chambers of Commerce and regional and local institutions have been working for some years with the Initiation Plan for Foreign Promotion (PIPE 2000).

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