Italy’s foreign trade: focus on Africa, Iran and ASEAN countries

(AGI) Rome, Dec. 5 – The year 2016 will be difficult for foreign trade, but Italy is determined to balance the accounts and identify new areas of development, with a coordinated strategy. In an interview with Italian news agency AGI, Italian Deputy Minister of Economic Development Carlo Calenda explained the government’s objectives and guidelines.

“There has never been so much consistency of views in this field as there is today,” said Calenda. “Our strategy is developed by the Presidency of the Council and then all ministers take a decision on it together. The system is beginning to work in a systematic way.” The keywords in the process are coordination and continuity: “We keep working on the relationship with the selected countries and the sectors we focus on must be quite clear,” the deputy minister explained. The strategy also takes complex geopolitical situations into account, and the government even believes that business can promote peace. “But the contrary is also true,” continued Calenda. “For Italian companies it is very important to start thinking in geopolitical terms. In 2016 we will have an extremely unstable situation, not only from the point of view of safety, but also in terms of financial security. Hence the strategy of consolidating primarily secure markets, like the United States and Canada, before moving on to new markets, with rational strategies. In the U.S. we focus on large-scale retail trade. We are pushing agro-food and textile products, half of which are new brands. We will work initially with four chains. Later we will present ourselves with a single brand, set out by Agriculture Minister Maurizio Martina, at the main American food fairs, combining ‘Tutto Food’, Cibus and Vinitaly.”

As for emerging markets such as Latin America, the government is moving “from the Mercosur countries to the Pacific and Mexico. In Asia, we focus on the ASEAN area (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam), where we are closing many deals. And then there is Africa, where we try to bring entire supply chains, technology centres in all sectors.”

In Turkey, Italy has opened an investment desk in cooperation with a local merchant bank. So the strategy is diversified: “We export products to the U.S., while we export products, equipment and infrastructure to Asia and the Pacific area. We can also try to penetrate more difficult markets, but we should go there with the right prospects and with ventures right for those countries,” Calenda added.

Italy expects to triple its exports to Iran once the current sanctions on the country are lifted as a result of negotiations in the nuclear issue. “Iran will be the good news of 2016 for Italy,” said Mr Calenda who recently led a delegation of entrepreneurs to Tehran ahead of the likely lifting of sanctions. The results are “very positive”, the deputy minister concluded, also announcing a series of meetings in the coming months between the Italian and Iranian government “at all levels”. With Iran, Calenda explained, “we can quickly reach three billion euros in exports, tripling their current size. And trade worth seven billion is feasible by the end of 2017. The mission to Iran was a success for several reasons. First of all the size of the mission: 371 entrepreneurs were in Tehran and more than a thousand business-to-business meetings were held. But the quality of the work was also excellent: our entrepreneurs are very happy, a satisfaction rate of 90 percent being measured after the mission. And, unlike other missions, satisfaction with the business meetings was even higher than 90 percent, also thanks to a highly developed and interesting Iranian entrepreneurial class.” The waiting is now for ‘implementation day’, which will mark the reopening of full-scale trade with the country. “Our hands are tied until implementation day,” Calenda continued, explaining that his meetings with the governor of the Central Bank of Iran showed the need to “prepare everything” to be “ready for the day after”.

Italian export credit agency SACE pledged to lend five billion euros for investments. “But that is not the end of it,” the deputy minister went on. “A number of Iranian banks could open in Italy to restart the flow of trade and investment.” Iran will also have to go through an ‘upgrading’ of the country that could involve Italian industry. “There is a good cooperation with Italy on this; I think of the tanning and marble industries for example,” continued Calenda. “We operate like this: we bring a technology centre for a given industry, we transfer our equipment to this centre, and there we train local operators. This stimulates others to buy our machines and to work closely with Italians. And there are also companies that used to be in Iran, such as Techint, who are interested in returning.” The prospects look promising in the oil and gas sector as well: “We met with the Deputy Minister of Oil and with him we outlined the situation with a dozen Italian companies”.

Carlo Calenda, is leaving in the coming days for Africa, where he will have meetings in several countries. His tour will start in Ghana and Ethiopia, from where he will move on Dec. 15 to Nairobi to lead an Italian delegation at the WTO’s Tenth Ministerial Conference. “Matteo Renzi has made an unprecedented effort in Africa,” Calenda said in an interview with AGI about foreign trade. The deputy minister underlined that Africa will be one of the cornerstones in Italy’s foreign affairs ‘offensive’. In 2014 Prime Minister Renzi was in Mozambique, Angola and Congo-Brazzaville, and this year he has visited Ethiopia and Kenya. In 2016 he will be back in Africa for several meetings, starting in Ghana. ” Italy’s objective in Africa – said Calenda – is to transfer entire supply chains. We have already opened a fruitful dialogue with Mozambique. We have done preparatory work on oil and gas, and we opened a service center in Maputo for Italian companies that want to go there to invest and produce.” In Maputo, Calenda went on, “a fair is held in which more Italian than Portuguese companies participate,” although Portugal is the historical reference point of that part of Africa. The more established destinations include Congo-Brazzaville and Angola, while the next steps are Ethiopia and Ghana, where the prime minister will go as well. Calenda explained: “Next year we will be back in Ghana and Ethiopia with a business mission. Ghana is a very advanced country where we are not yet present. Ethiopia’s economic growth has been spectacular, and we are present there with large-scale infrastructure projects. There are many similarities with our country, like the presence of an important leather industry; it is a most promising country.”

The WTO’s Tenth Ministerial Conference in Nairobi will be the first held in Africa. The choice was made to underline the importance of developing countries in multilateral negotiations. The organization, based in Geneva, has 161 member countries – to be joined for the occasion by future members Liberia and Afghanistan.

Marilia Cioni
AGI Agenzia Giornalistica Italia
International Relations / Content Production
+39 06 51996354
+39 380 3303759
marilia.cioni@agi.it

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