AgriBusiness Global Report: Working to Improve Business Relationships with Companies in SE Asia
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In part 2 of this AgriBusiness Global Report TAFIREL’s Nicolas Potrie continues his interview with an ag executive and professor of international business about the trio’s recent visit as part of team to strengthen Mercosur members relationship with three Asia countries.
SE Asia is a critical region for those in the crop inputs industry, especially with tensions building between China and the U.S. AgriBusiness Global is hosting the AgriBusiness Global SE Asia Conference on 8-9 November 2023 at the Pullman Jakarta Central Park in Jakarta, Indonesia to help crop protection businesses make those contacts.
NP: It’s incredible the opportunities that we face, sometimes. Professor Ignacio also knows the free trade agreements are very important for small economies like ours. Mercosur (members) were more than 20 years negotiating with the European Union, a Free Trade Agreement, and seems that still difficult – a political problem inside the EU. And the whole world has problems. So how can you see, Professor, the huge agreement that the world is dealing now like CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). Is there any chance for the Mercosur region to sign some kind of those agreement with Southeast Asia countries?
IB: We are not, really a having a very good reaction about this trend (with agreements) CPTPP for example or in Asia that we’re talking about 15 very big economies together, now 12 because UK is now a part of the blocks. But okay, Uruguay is trying to react because we asked to be part of CPTPP last year, but we are alone. We have to be aware that Mercosur countries prefer to open with a Asia economies.
I’m very worried about this, because, all our competitors, for example, Australia. And you see them not only that Asean countries or Japan or South Korea, have a very strong relationship with South Asia members. The problem is that we pay a lot of tariffs, and they’re not paying tariffs to support our products. Of course, that is a big issue.
We are very slow. As you said, we continue having a discussion about the agreement with the European Union. When don’t have an agenda, an agreement with the U.S.
We don’t have an agenda with China. Again, Uruguay is trying to push an agenda by a natural agenda with China. But Mercosur wanted that. This discussion, I think, is a central discussion, because we need to increase our competitive, and we need to cut the tariffs we pay in this region. And for the moment I think that our reaction is very slow.
And we’re not seeing that field that is going so fast around the world. Free trade agreements, not only megablocks, bilateral free trade agreements are part of globalization, of economic organizations, and countries are really slow in this issue. We must react, of course.
NP: And how can you tell a how? What can you tell us about the universities in the countries that you visit Philippines, Malaysia, Thailand, is any different with Western countries’ universities?
IB: Yes, they are. That’s a good question. Asian countries are always looking in long term. In Latin, America, Mercosur countries, we’re always looking in the short or middle terms. It’s not possible for us to see 30 years into the future. It’s difficult they are really prepared. When I talk with my partners in this part of the world, they always thinking what is going to happen because China is going to invest. For example, the acceleration of technological investments in China. When we visit Thailand in this way, we’re talking now, China is investing in a lot in electrical powers in Thailand. And now that investment it’s only focused on the internal markets. But they are starting in the university, (to ask) what is going to happen 20 years in the future? Why? Because Thailand is going to be one of the bigger exporters of electrical car in the region and in the world. Why? Because of Chinese investment. So, all that patterns and friends, they have that ability. In the case of Latin American, Mercosur countries, we’re looking always when it’s going to change the government.
And it’s really probably that public policies will change again. And that, of course, is a problem. These universities are improving a lot. We have in these countries one of the best universities of Asia already. For example, Singapore is very good in the rankings, but Philippines in Manila, of course, Thailand, Malaysia they have a very good universities, and they have very international teams, professors that know about the world professors that know what is going to happen in the future.
NP: That’s good to hear. And also, the presentation of this trip, Analaura you can tell us that it is very good to be with Mercosur, because we were a chamber that represent four countries sometimes for us, that we belong to small countries like. Uruguay, Paraguay it is difficult to sell our country, because nobody knows where we are, the difference between Uruguay and Paraguay. So, when you go together, it’s easier, right?
ADE: It’s easier. It helps a lot. We have two giants – Brazil in Argentina, and we are very proud that the resource that they had, and sometimes we are jealous. But we work together, which is the best way to put in context who we are.
The meeting, with the counterparties start within the mission and then in Singapore and another company. And we have to put in context who we are in Latin America, because sometime (when people) think of Latin America, they’re talking about Columbia, Mexico. No, no, no. We are these four countries.
We are in missions, and we have much to offer, and this is our strength and this is our weakness, and we have to work on them. But also, we are in some things complementary. For example, in grains.
Sometimes we load the vessel a that is complete in Argentina and complete in a Brazilian port. Sometimes we have some strength in that, better infrastructure that we have in our part that we can export 100% grains from Uruguay. But sometimes to get more competitive, we are complementary. This is important to let our customers know in our first meeting, show them what we can do. We are very close to the other ports, to Paraguay, to Argentina. They are very efficient. They all the best export of (products) from Argentina. Sometimes we export to Canada. So, I agree with you that it put into context who we are.
NP: That’s great. That’s great. Any other comments about the trip or the mission you want to add?
ADE: I would like to remark on the role that our embassy in Kuala Lumpur our ambassador, the console, and all of her team made a very professional work, and for our visit, and also linking us with another company, another institution. So first in my reading, then I am thankful for them, because they were a great hospitality and a very professional work in this world.
NP: That that’s very important to see and to remark, because public sector, usually in our industry that we came from private sector, we are not so related, and in Asia countries the public sector has a lot of importance. So also we appreciate the support of the Ministry of Foreign Affairs of Uruguay and Argentina in this delegation.
IB: Analaura has a very important point, because I think we need to think about our embassy important to have more embassies in this region because they play a role really important. For example, it’s important to remark that Paraguay doesn’t have any embassies in this region?
For Mercosur we need to open more embassies. They play an important role, and finally, Nicholas, I want to remark only to say that the GDP of Asean members in average when increase more than 5% in this year.
It’s one of the more dynamic regions of the world. And also, it’s a region very focused on peace. That is also important. Because when we talk about peace and peace is really important for business.
In this very complicated situation between the tensions of the U.S. and China, the role of Asean is grave, and so we can diversify our business there because it’s going to be a region that will support always peace. This is a region that is increasing. We must accelerate our business there.
NP: Yes, and the difference of the culture, the religion that sometimes for the Western world is difficult to understand – the Muslim war, the Buddhist war, even the non-religious sometimes. We need to adapt our offers and our trade also with cultural diversity, right?
IB: Of course. We need to know more about these regions; we need to be more prepared. Asian countries are really prepared. They read. They think about the future. In our case, we need to improve on that issue.
NP: That’s great. This is one of the main goals for AgriBusiness Global to connect everybody, the industry and the work. So, we really appreciate your time today, and thank you very much. Analaura Delissague Erro from Erro Group, Professor Ignacio Bartesaghi, from the Catholic University of Uruguay. We hope we can see you very soon, next time. Thank you.