10/29/2005

Poland seen as untapped trade partner

It is by far the largest of the new countries in the European Union (EU), which in May of 2004 gained fast-track membership into the biggest commercial club on earth.

In fact, with nearly 40 million people, Poland accounts for roughly half of the population and half of the GDP of all 10 new EU members, and in the first three quarters of 2004 alone, Poland's total exports rose by more than 30 percent.

But despite the fact that Polish industrial output swelled by 6.4 percent in 2004, Mexican businessmen have so far welcomed this new potential trade partner with resounding disinterest.

Although the free-trade accord Mexico signed four years ago with the EU now includes access to all 25 member nations of the expanded bloc including Poland two-way trade between Europe and Mexico registered just over a 16-percent rise between 2003 and 2004, going from US23.5 billion to US27.5 billion. In the case of Poland, the increase was even more unimpressive: from US225 million combined trade in 2003 to 250 million dollars in 2004.

For 2005, the comparable figure is expected to be US260 million, up only 4 percent compared to last year.



‘DISTANCE A FACTOR’

"Geographic distance is certainly a factor in discouraging bilateral trade," explained Polish Ambassador to Mexico Wojciech Tomaszewski in an interview with The Herald Mexico last week. "And there is a certain degree of unawareness on both sides as to what can be accomplished in terms of commercial cooperation."

The fact that most Mexican exporters have their eyes firmly fixed on their northern neighbor doesn't help much either, although Tomaszewski was too diplomatic to point this out.

"The balance of trade is fairly even, but the numbers just don't satisfy the economic expectations or potential on either side. What we are seeing is really an untapped potential."

But Tomaszewski said that the Polish government is anxious to increase its commercial ties with Mexico, and to that end, it has been encouraging the exchange of trade delegations on both sides of the Atlantic.

This year, two business missions from the states of Jalisco and Mexico visited Warsaw looking for ways to boost bilateral trade, and next month a commercial delegation from Poland is due to come here to scout for Mexican exporters and importers.

"I would be very happy to see our combined trade show a significant increase in the next 12 months," Tomaszewski said.

"There is a solid basis of friendship for our commercial ties to build on. Our two countries have similarities in our history, and Mexico has long shown its solidarity with the Polish people. Mexico was one of the first countries in the world to condemn the invasion of Poland by the Nazis, and even took in about 2,000 war orphans in the 1940s. The friendship is definitely there, we just need to build more commercial bridges."

Tomaszewski added that Mexico now constitutes Poland's second largest trade partner in Latin America, after Brazil.



SELLING TO MEXICO

Currently, Poland is working to broaden its portfolio of products its sells to Mexico, he said.

Two years ago, the envoy said, about 37 percent of Poland's sales to Mexico were composed of enriched dried milk powder to the state-run Liconsa dairy company. Today, powdered milk accounts for just 8 percent of Poland's exports to Mexico.

Poland is now selling Mexico a wide range of goods, including auto parts and other manufactured products, he said.

Mexico, in turn, sells Poland agricultural products, semiconductors, electronic parts and razor blades.

"It is interesting to note that about 90 percent of the manual razors sold in Poland today come from Mexico," Tomaszewski said.

As for investment, Tomaszewski said that, according to Mexican government statistics, there are 12 Polish companies with capital holdings here the most important one being the Nowy Styl furniture factory in the State of Mexico, which opened a few years ago.

"I think that total Polish investment amounts to less than US2 million," he said. "And there is as yet no Mexican investment in Poland, although Cemex is considering building a plant somewhere outside Warsaw."

Because both countries are net recipients of foreign capital, there is not likely to be much increase of joint-venture projects in the near future, he said.

"So, for now, we are pushing to build two-way trade," he concluded. "This will be beneficial to both sides."

Source: The Herald Mexico



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