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SPAIN-USA: ECONOMIC AND FINANCIAL LINKAGES
Pablo Hernández de Cos
Governor
AMERICAN BUSINESS COUNCIL
Madrid
5 February 2020
SOME FACTS
• Spain-USA trade ties are increasing
• Bilateral trade flows have outpaced Spanish trade
• Spanish trade exposure to the USA is significant (almost 2% GDP)
• Bilateral goods trade consist mainly of intermediate goods
• USA tourist arrivals are getting increasingly relevant for Spain
• Spain enjoys a current account surplus against the US (the deficit in
goods is offset by a surplus in services), and the IIP reveals that Spain is a
net creditor to the USA
• Financial linkages (in terms of stocks) are also strengthening
• Bilateral FDI stocks are increasing (mainly in the financial sector)…
• … as well as portfolio investment stocks and (consolidated) cross border
banking claims
2
3
FLOWS TRADE DEVELOPMENTS
SOURCE: Departamento de Aduanas.
• In the last years, bilateral trade flows of goods have grown above total Spanish trade
-30
-20
-10
0
10
20
30
08 09 10 11 12 13 14 15 16 17 18 J-Nov19
To Total world To USA
SPANISH EXPORTS OF GOODSNominal rates of change
%
-30
-20
-10
0
10
20
30
08 09 10 11 12 13 14 15 16 17 18 J-Nov19
From Total world From USA
SPANISH IMPORTS OF GOODS Nominal rates of change
%
4
BILATERAL TRADE EXPOSURE
1,8
1,6
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
EXPORTS TO USA IMPORTS FROM USA
% o
f G
DP
SPAIN: FOREIGN TRADE WITH USA (2018 % of GDP )
GOODS SERVICES GOODS AND SERVICES
0.11 US GDP
0.12 US GDP
SOURCES: INE, Banco de España, BEA, IMF and US Census Bureau
• Spain direct trade exposure to US is significant: total goods and services exports are
close to 2% GDP while for the US is much smaller: around 0.1% GDP
• The market share of exports of goods to the USA and Spain has remained quite stable
Trade
partnership
ranking
Spanish
exports of
goods and
services in
% of GDP
2001-2010 2011-2017 2018 2018 2018
Total world 1,9 1,7 1,7 34,0
France 7,4 7,4 7,3 1 4,7
Germany 2,8 2,9 2,9 2 3,8
Italy 4,5 4,8 5,0 3 2,3
Portugal 28,2 29,8 27,3 4 2,0
United Kingdom 3,2 3,2 3,2 5 3,3
USA 0,5 0,6 0,6 6 1,8
Trade
partnership
ranking
2001-2010 2011-2017 2018 2018
China 4,8 7,6 7,2 1
Canada 21,9 18,8 18 2
Mexico 13,0 14,8 15,9 3
Japan 6,1 4,3 4,5 4
European Union 20,9 17,7 19,1
Spain 0,8 0,7 0,8 26
Spanish exports shares
USA exports shares
5
STRUCTURE OF SPANISH EXPORTS TO THE USA
SOURCE: Departamento de Aduanas y Ministerio de Asuntos Económicos y Transformación Digital.
• Spanish exports of goods to the USA consist mainly to intermediate goods (energy,
chemicals and mineral products) and consumption goods (food)
• In 2019, the Spanish exports growth was positive for all categories of products
(automotive components, machinery), except for energy
Food 11,3%
Cars 4,9%
Other consumer goods 11,4%
Capital goods 10,5%
Mineral, metal and electric products
20,8%
Chemicals 11,7%
Automotive components 6,8%
Other intermediated products 9,6%
Energy 13,1%
SPANISH EXPORTS OF GOODS TO USA 2018 STRUCTURE (%)
-10
-5
0
5
10
15
2015 2016 2017 2018 2019 J-Nov
% a
nd p
p
SPANISH EXPORTS TO USA Rates of change and contributions by products
Energy
Other intermediatedproducts
Automotive components
Chemicals
Mineral, metal andelectric products
Capital goods
Other consumer goods
Cars
Food
total
6
STRUCTURE OF SPANISH IMPORTS FROM THE USA
SOURCE: Departamento de Aduanas y Ministerio de Asuntos Económicos y Transformación Digital.
• Spanish imports of goods from the USA also consist mainly of intermediate goods
(chemicals, followed by automotive components and energy)
• In 2019, positive growth in Spanish imports was recorded in all product categories (energy
and automotive components), except for transport equipment
Food 6,1%Cars 0,8%
Other consumer goods 4,9%
Capital goods 8,5%
Mineral, metal and electric products
14,6%
Chemicals 26,3%
Automotive components 13%
Other intermediated
products 12,2%
Energy 13,6%
SPANISH IMPORTS OF GOODS FROM USA 2018 STRUCTURE (%)
-15
-10
-5
0
5
10
15
20
25
30
2015 2016 2017 2018 2019 J-Nov
% a
nd p
p
SPANISH IMPORTS FROM USA Rates of change and contributions by products
Energy
Other intermediatedproducts
Automotive components
Chemicals
Mineral, metal and electricproducts
Capital goods
Other consumer goods
Cars
Food
total
USO INTERNO 7
RELATIVE WEIGHT IN SPANISH TRADE OF BILATERAL FLOWSBY PRODUCT
SOURCE: Departamento de Aduanas y Ministerio de Asuntos Económicos y Transformación Digital.
• Exports of goods to the USA reach 4.5% of the total. The highest relative weights
correspond to energy products, machinery and metal products (although in no case the
weight exceeds 10% of each heading).
• Imports of goods from the USA amount to 4.1% of the total. The share of US products is
higher for chemicals, automotive components and transport equipment (but below 9% of
each heading).
4,5
0 2 4 6 8 10 12
Food
Cars
Other consumer goods
Machinery
Transport equipment
Mineral products
Chemicals
Metallic products
Electrical products
Automotive components
Other intermediated products
Energy
TOTAL
%
SHARE OF EXPORTS TO USA IN SPANISH EXPORTS BY PRODUCTS (2018)
4,1
0 2 4 6 8 10
Food
Cars
Other consumer goods
Machinery
Transport equipment
Mineral products
Chemicals
Metallic products
Electrical products
Automotive components
Other intermediated products
Energy
TOTAL
%
SHARE OF IMPORTS FROM USA IN SPANISH IMPORTS BY PRODUCTS (2018)
USO INTERNO 8
RELATIVE WEIGHT IN US TRADE OF BILATERAL FLOWS BYPRODUCT
SOURCE: World Bank
• Exports of goods to Spain reach 0.8% of the total. The highest relative weights
correspond primary products, chemicals and fuels
• Imports of goods from Spain amount to 0.7% of the total. The share of US products is
higher for primary products and chemicals.
0 1 2 3
TOTAL
Minerals
Vegetable
Chemicals
Fuels
Wood
Food Products
Transportation
Miscellaneous
Metals
Mach and Elec
Plastic or Rubber
Animal
Footwear
Hides and Skins
Textiles and Clothing
Stone and Glass
SHARE OF EXPORTS TO SPAIN IN US EXPORTS BY PRODUCTS (2018)
0,8%
%0 1 2 3
TOTAL
Vegetable
Food Products
Minerals
Chemicals
Hides and Skins
Stone and Glass
Animal
Fuels
Metals
Footwear
Plastic or Rubber
Wood
Miscellaneous
Transportation
Mach and Elec
Textiles and Clothing
SHARE OF IMPORTS FROM SPAIN IN US IMPORTS BY PRODUCTS (2018)
0,7%
%
9
TOURISM INFLOWS FROM THE USA
SOURCE: INE.
1,2
-1,9
-2,1
-1,6
3,6
13,4
3,7
-6 -4 -2 0 2 4 6 8 10 12 14 16
TOTAL
UK (22,3%)
GERMANY (13,8%)
FRANCE (13,7%)
ITALY (5,3%)
USA (3,6%)
RESTOF THE WORLD (41,3%)
2018 Jan-Nov 19
TOURIST ARRIVALS TO SPAINRATES OF CHANGE (%)
(In brackets, percentages of total arrivals in 2018)
• Tourist arrivals from the USA have grown remarkably in the last years and contributed to
offset the weakness in other markets (UK, Germany).
10
CURRENT ACCOUNT AND INTERNATIONAL INVESTMENT POSITION
• Spain maintains a positive trade balance with the USA: the bilateral deficit in goods is
offset by the surplus in services
• Spanish net IIP with the USA turned positive in 2015 and stood at 0.9 % of GDP in 2018
Source: Banco de España and Coordinated Portfolio Investment Survey (IMF)a. Spanish portfolio liabilities are derived from information on portfolio assets reported by US (securities held as reserve assets are not available)
-3,0
-1,5
0,0
1,5
3,0
-30
-15
0
15
30
13 14 15 16 17 18
BILLIONS OF EUROS % SPANISH GDP (RHS)
SPANISH ECONOMY'S NET INTERNATIONAL INVESTMENT POSITION WITH THE US (a)
EUR bn %
-0,1
-0,1
0,0
0,1
0,1
0,2
0,2
0,3
2013 2014 2015 2016 2017 2018
% o
f G
DP
TRADE BALANCE OF GOODS AND SERVICES WITH USA (% Spain GDP)
11
FOREIGN DIRECT INVESTMENT POSITION
• Bilateral FDI flows between Spain and the USA have increased during the last years
• In 2018, FDI into Spain from the US accounted for 4.6 % of the country’s inward position,
while FDI into the US from Spain represented 2.2 % of total FDI in the USA
Source: Banco de España and Coordinated Direct Investment Survey (IMF)a. Directional principle basis, organised according the direction of the direct investment for the reporting economy (taking account of control and influence)
2
3
4
5
0
10
20
30
13 14 15 16 17 18
BILLIONS OF EUROS
% OF TOTAL FDI IN SPAIN (RHS)
FOREING DIRECT INVESMENT IN SPAIN FROM UNITED STATES (a)
EUR bn %
0,0
0,5
1,0
1,5
2,0
2,5
3,0
0
15
30
45
60
75
90
13 14 15 16 17 18
BILLIONS OF EUROS
% OF TOTAL FDI IN UNITED STATES (RHS)
FOREING DIRECT INVESMENT IN UNITED STATES FROM SPAIN (a)
EUR bn %
12
FOREIGN DIRECT INVESTMENT POSITION BY ECONOMIC ACTIVITY
• In Spain, the financial sector receives the bulk of the FDI coming from the USA, followed
by the industry
• Similarly, in the USA most of the FDI coming from Spain goes to the financial sector
0
20
40
60
80
100
13 14 15 16 17 18
OTHER SECTORSREAL ESTATE AND OTHER SERVICESFINANCIAL SERVICESCOMMERCEINDUSTRY
FOREING DIRECT INVESMENT IN SPAIN FROM UNITED STATES (a)
%
0
20
40
60
80
100
13 14 15 16 17 18
OTHER SECTORSREAL ESTATE AND OTHER SERVICESFINANCIAL SERVICESCOMMERCEINDUSTRY
FOREING DIRECT INVESMENT IN UNITED STATES FROM SPAIN (a)
%
Source: Banco de España and Coordinated Direct Investment Survey (IMF)a. Directional principle basis, organised according the direction of the direct investment for the reporting economy (taking account of control and influence)
13
PORTFOLIO INVESTMENT POSITION
• Bilateral portfolio investment position has increased during the last years, but it is
asymmetric
• In 2018, Spain received 12.2 % of its portfolio investment from the US, whereas the
USA got around 0.4 % from Spain
Source: Banco de España and Coordinated Portfolio Investment Survey (IMF)a. Data are derived from information reported by the holders of the securities (creditor information) and exclude securities held as reserve assets
2
4
6
8
10
12
14
0
20
40
60
80
100
120
140
13 14 15 16 17 18
BILLIONS OF EUROS
% OF TOTAL PORTFOLIO INV. IN SPAIN (RHS)
PORTFOLIO INVESMENT IN SPAIN FROM UNITED STATES (a)
EUR bn %
0,0
0,1
0,2
0,3
0,4
0
15
30
45
60
13 14 15 16 17 18
BILLIONS OF EUROS
% OF TOTAL PORTFOLIO INV. IN UNITED STATES (RHS)
PORTFOLIO INVESMENT IN UNITED STATES FROM SPAIN (a)
EUR bn %
14
CROSS-BORDER BANK CLAIMS
• By mid-2019, Spanish banks concentrated 14.6 % of their (consolidated) cross-border
claims in the US, while US banks had 1.2 % of their international claims located in Spain
Source: Consolidated banking statistics (BIS)a. Consolidated positions (including claims of reporting banks' foreign affiliates but exclude intragroup positions) compiled by immediate counterparty.
0
4
8
12
16
20
0
50
100
150
200
250
13 14 15 16 17 18 19Q2
BILLIONS OF EUROS
% OF TOTAL SPANISH BANKS' CROSS-BORDER CLAIMS
CROSS-BORDER CLAIMS OF SPANISH BANKS ON UNITED STATES (a)
EUR bn %
0,0
0,5
1,0
1,5
2,0
2,5
0
10
20
30
40
50
13 14 15 16 17 18 19Q2
BILLIONS OF EUROS
% OF TOTAL US BANKS' CROSS-BORDER CLAIMS
CROSS-BORDER CLAIMS OF US BANKS ON SPAIN (a)
EUR bn %
15
SPANISH AGRI-FOOD INDUSTRY EXPOSURE TO US TARIFFS
• US administration increased in 2018 and 2019 the tariffs applied on some Spanish agri-
food products. Goods affected amount to about 0.3% of total exports of Spanish goods.
• This increase would entail a decline in the sales of these products to the USA of at least
12% (Gutierrez and Martín, 20191). This impact is equivalent to 0.01% of Spanish GDP.
• It is worth bearing in mind that this estimate is based on an aggregate exports elasticity to
tariffs and does not incorporate non-linear effects related to the magnitude of the rise in
tariffs.
• 1 Boletín Económico de Banco de España 4/2019 “Las medidas proteccionistas arancelarias y las exportaciones de bienes
españoles”
OLIVES, OLIVE OIL, WINE AND CHEESE 2.5 0.3 7.4 14.0 OLIVE OIL 1.1 0.1 3.2 14.0 WINE 1.0 0.1 2.3 11.0
WEIGHT IN
AGGREGATE
SPANISH EXPORTS
WEIGHT OF SALES
TO USA
IN AGGREGATE
SPANISH
WEIGHT IN
SPANISH
EXPORTS TO USA
WEIGHT OF SALES
TO USA
IN SPANISH EXPORTS
OF EACH GOOD
FUENTE: Departamento de Aduanas.
GOODS AFFECTED BY TARIFFS INCREASE
%
USO INTERNO
THANK YOU FOR YOUR ATTENTION