It has been argued that in the UK not enough media attention is being given to the agreement between the EU and Mercosur, the South American trading bloc comprising Brazil, Argentina, Paraguay and Uruguay (280 million people). That could be because Britain would be missing out on this ground-breaking agreement with Brexit (although many analysist think that the agreement actually paves the way for a potential post-Brexit agreement between the UK and Mercosur) or it could be the result of a general lack of awareness and information about this part of the world. There is also reticence in some sectors and concerns about Mercosur’s beef exports or food standards that complicate matters.
We discussed in our previous post what Mercosur is about – for those of you with little familiarity with our part of the world – and earlier we also gave you some initial thoughts on what this agreement means and why it is so important. Today, I would like to focus on the opportunities for UK/exporters. Basically, ok, Mercosur will slowly open up to EU exports – so what can we sell to that part of the world?
Uruguay, with 3.5m people, has the potential to feed 50m
Firstly, there are clear opportunities for consumer goods – there are 280 million consumers in Mercosur. Think about the bottom of the pyramid (fascinating potential there, in my opinion), the strong middle class, and the upper/luxury segments (Brazil, in particular, is well-known for its millionaires and billionaires). From food and drink to language courses, from beauty and pharma through to pet accessories, these countries offer potential for companies willing to invest in getting to know them and differentiate themselves from their fellow European competitors.
There are also huge opportunities in B2B, in sectors such as infrastructure, energy, oil and gas, utilities, mining, security, industry, logistics and agriculture.
Lots of works around Buenos Aires.
In particular, I would think laterally here: this new agreement should help as an incentive at business-level in all four South American countries to boost exports. Think of businesses here: they now have unprecedented access to the EU market and each business leader will no doubt want to make the most of it. What do they need to reach those markets and fulfil that demand? Packaging, branding, software, logistics, industrial technology, materials, ingredients, processes, training, language tuition, qualifications, travel, machinery, legal advice…? Anything you can supply and make this a win-win for all?
In sum, I cannot think of many things that these four countries don’t need, to be honest, the opportunities are limitless. What matters is that it is clear to you why they should be buying from you, and to remember that you will also face all your European competitors when going for these markets. More on how to trade with Mercosur soon!
My next post will focus on the nitty-gritty of the agreement itself. I promise to try and make it as simple as possible!
Brazil and Argentina, due to their sheer size and population, clearly dominate media and business attention, but what do smaller Paraguay and Uruguay bring to the table? That’s also the topic of two further posts on this series. Remember to follow me on Twitter @uklatinamerica or sign up for the newsletter not to miss out!
