"Brexit makes exports difficult, but the British market is still very interesting"

Despite the climate of international uncertainty, Catalan exports are going from strength to strength.

Oliver Thansan
Oliver Thansan
26 May 2023 Friday 16:25
17 Reads
"Brexit makes exports difficult, but the British market is still very interesting"

Despite the climate of international uncertainty, Catalan exports are going from strength to strength. In the first quarter of the year, they grew by 22.2% year-on-year, a percentage higher than the Spanish average, which was 14.6%, with 102,683.9 million euros, the all-time high for the period. "The data is encouraging, despite the fact that they do not take inflation or seasonal effects into account," says Elisa Carbonell, General Director of Company Internationalization at ICEX, an entity under the Ministry of Industry, Commerce and Tourism. "This year we are following a good growth path for exports from all of Spain, especially those from Catalonia, which have been very dynamic," she adds.

The community led merchandise exports during 2022, with 24.4% of the total Spanish, followed by Madrid (15.25) and Andalusia (11%). This percentage increased in the first quarter of the year, reaching 26.6% of the total export activity of the State. Carbonell attributes the good pace of Spanish foreign trade to the fact that the sector "is very well consolidated" and its ability to adapt to the context of uncertainty. "We have achieved a record of habitual exporting companies," he details.

Exports of goods and services contributed to boosting the Gross Domestic Product (GDP) during the first three months of the year, a period in which the Spanish economy grew by 0.5%, a rate that in the case of Catalonia was 1.2 %. The main contributions to the growth of exports in the community came from the automotive, chemical products, capital goods and energy products sectors. Despite this, the trade balance registered a deficit of -2,306.6 million, thus reducing the deficit registered in the same period of the previous year to almost half.

Carbonell foresees a good evolution in the coming months of the export activity in Catalonia, thanks to the "innovation" and the "high technological content" of the leading sectors. Despite this, he acknowledges that there are obstacles to foreign trade in Catalonia and the rest of Spain, such as inflation and the prices of some raw materials and maritime freight.

"The great challenge for Catalan and Spanish exports is to continue increasing the added value of their products so that price is a factor that counts less when it comes to exporting and being competitive," he argues. “And then dealing with the nationalist drifts in some markets, such as Brexit, which makes life difficult for us, although the United Kingdom continues to be a very interesting market, and that is why we are making efforts to continue helping companies to adjust ”. And he continues: "To stay in this market, they have had to make greater outlays on promotion, legal advice for new procedures and visa expenses."

The ICEX has made aid from European funds available to the affected companies. The programme, endowed with four million expandable, subsidizes expenses attributable to Brexit up to a maximum of 200,000 euros per company. The agency has so far completed 54 company applications and another 257 are in process. The deadline for receiving new applications ends on June 12. Apart from direct aid, "we have taken the opportunity to open alternative markets to the United Kingdom for the sectors that are especially affected," says Carbonell.

The war in Ukraine has been another stick in the wheels for international trade, especially for companies that exported to Russia and have had to break through in other countries. "Apart from exporting value-added products, you also have to diversify your destination markets, because in the end, as popular wisdom says, you don't have to put all your eggs in the same basket," says Carbonell. In this sense, it must be remembered that most of the exports of Spanish companies –over 60%- are concentrated in the European Union. However, other markets are gaining ground, such as the United Kingdom, the United States, Latin America and Asia. "We are also making efforts so that companies start exporting to Africa," he adds.

Regarding the sectors that contribute the most to the growth of export activity, capital goods, the automobile sector, chemical products and food, beverages and tobacco stand out. “These are industrial sectors that generate employment and where it is important to incorporate innovation, new technologies and gain efficiency. At ICEX we are making a key commitment by supporting these sectors at international fairs and through grants”, says Carbonell. In addition, the entity works on new programs focused on the search for young talent and on the implementation and consolidation of companies in foreign markets.

To help the expansion of the Spanish business fabric abroad, the agency has a network of more than 100 commercial offices of the Secretary of State for Trade that offer market intelligence services, commercial promotion activities both in the physical channel, with participation in fairs, such as in the online channel, with a presence in marketplaces, marketing campaigns and media plans for certain sectors. “Internationalizing badly can be very expensive for a company, but internationalization is very beneficial, because it helps companies to be more competitive, create more jobs and be more resilient,” he concludes.