PORTUGUESE AND Canadians have had a long relationship, stretching back some 500 years. Indeed, early Portuguese explorers, in the form of the Corte-Real brothers, re-discovered Newfoundland (if one counts the Vikings) and explored the eastern Canadian coast. Later, a small colony of Portuguese set up a community on Canadian soil – a fact celebrated by President Jorge Sampaio who visited their descendents in 2001, reports The Resident’s Chris Graeme.
Recently, both countries celebrated the 60th anniversary of the Canadian Trade Mission, which began in February 1946 by the Trade Commissioner’s Service. By 1952, the status of the mission was raised to that of legation and, in 1953, to full embassy.
However, despite cordial relations between the two countries, trade, while on the increase, was limited and had remained hampered by tariffs between Canada and the EU in the 1980s and 1990s.
Canada’s direct exports to Portugal in 2002-2003 stood at 175.8 million Canadian dollars up on the 2001-2002 figure of 133.9 million Canadian dollars, with an increase in the service sectors. Imports rose from 250.9 million Canadian dollars in 2001-2002 to 277.8 million Canadian dollars.
Today, there is significant potential for the expansion of bilateral trade and investment growth. Portugal had a trade surplus with Canada in 2004, with Canadian imports valued at 299,481 million Canadian dollars and exports to Portugal worth 184,935 million Canadian dollars.
Although overall bilateral trade figures show a sharp improvement in the first quarter of 2005, the surplus in favour of Portugal has widened even more vigorously.
Portuguese company Sonae invested 173 million Canadian dollars in Quebec, building the world’s largest wood particle board plant. The Canadian zinc metal producer, Euro Zinc, is active in Portugal, as is telecoms company Nortel and rail rolling stock company Bombardier. The Hotel Ritz Four Seasons is also Canadian.
Other main Canadian exports to Portugal in 2004 were aircraft (27 per cent), newsprint (10 per cent), telecoms equipment (6.2 per cent), dry beans and grains (5.8 per cent), perfumes and deodorant preparations (4.1 per cent). Portuguese imports to Canada included wine (15.5 per cent), rubber tyres (12.7 per cent), shoes (4.7 per cent), electronic integrated circuits (3.5 per cent) and cork (3.4 per cent).
To put these figures into perspective, Portugal’s 2004 total trade figures increased 4.9 per cent to 28.7 billion euros for exports and 10.5 per cent to 44.1 billion euros for imports in 2003. The trade deficit rose 22.7 per cent to 15.3 billion euros in 2004, with imports exceeding exports by 65 per cent. But, generally speaking, trade between the 15 original EU member states has not kept pace with either side’s economic growth.
In 1998, Canada exported around 23 billion Canadian dollars in goods to the EU countries and this amount has been declining from 12.6 per cent to 5.1 per cent of total exports between 1980 and 1997. However, by 2004, trade with EU partners accounted for 79.4 per cent of total activity.
This problem has shown signs of increasing since the EU enlargement to 25 states and the obvious resolution to the issue lies in creating a free trade area. Europe still remains Canada’s most important trading partner after the US.
One explanation for the decline in trade between the EU and Canada overall is the EU’s increasing market integration as well as Canada’s integration with the US and Latin America.
However, Portugal’s increasingly cordial links with her former African colonies of Mozambique and especially Angola, which is opening up to trade following years of civil war, could provide Canada with a useful friend and stepping stone to establishing trade in those African countries.
But, there are tariff problems nevertheless which was why the Canada-EU Action Plan was signed in 1996 aimed at resolving bilateral trade disputes and improving the trade environment by removing or reducing the severity of tariffs.
Relations between Portugal and Canada remain cordial and optimistic for the future, Canada providing a large market for Portuguese goods and services, if Portugal becomes innovative and competitive enough to develop more in technology, alongside the already traditional cork, wine, foodstuffs, fabrics and leather goods.
On the investment front, Portugal has been a minor investor in Canada over the past two years (no figures available), whereas Canadian direct investment in Portugal has risen from 126 million Canadian dollars in 1989 to 624 million Canadian dollars in 2004.
There had been some tension related to fisheries disputes, but these have largely been resolved in recent years as Portugal has begun to co-operate with Canada in enforcement actions against infractions from Portuguese fishing vessels.
In 2000, when Portugal chaired the rotating EU Presidency and Lisbon unveiled its programme for EU Technological Shock, the then Canadian Prime Minister Chrétien led a delegation of MPs and ministers to Lisbon on the occasion of the EU-Canadian Summit. President Jorge Sampaio followed this up with Portugal’s highest level state visit to Canada since the 1980s, taking in most of the country’s large cities. In 2003, the then Portuguese Prime Minister Durão Barroso, Foreign Minister Martins da Cruz and Economics Minister Tavares da Silva visited Canada with an eye to drum up trade.
Certainly, there are between 375,000 and 500,000 Portuguese descendents living in Canada today – mostly from the Azores islands – and Canada’s success and expertise in the telecommunications sectors can be useful in modernising Portugal, while Portugal’s links in Africa, coupled with her worldwide diplomatic reputation and respect, could open the door for Canada to trade there and in other markets.