The historic visit of the Prime Minister of the Slovak Republic to Brazil represents an unquestionable boost to relations not only with Brazil, but also with the entire region. Government delegation Signed by inter alia, an intergovernmental agreement on defence cooperation, on the exchange of classified information, a protocol to the double taxation treaty and a memorandum of understanding in the field of police cooperation. As part of defence cooperation, Slovakia is interested in the new C-390 Millennium military transport aircraft from Brazil’s Embraer, and is expected to start formal procedures to acquire three C-390s in the first quarter of 2025.
Brazil’s population is 7. the largest state and by area 5. the largest country in the world. In 2023, it reached 9. ranks in the GDP ranking in the world. Brazil was also this year’s G20 presidency, and the summit took place a month before the arrival of the Slovak Prime Minister.
If there has been any mention of Latin American states in strategic foreign policy documents over the past thirty years, it has usually been as the last region of interest. Within the region, however, the focus has been on the largest countries, such as Brazil, Argentina and Mexico. However, this was in contrast to the real policy, which in the form of foreign visits from Slovakia focused particularly on Cuba, which was surprisingly the most visited country in Latin America during the thirty years (26% of government visits, including ministers and secretaries of state). The only visit of the Prime Minister of the Slovak Republic to Latin America was also to Cuba in 2015. Brazil, Mexico and Argentina accounted for 16%, 15.6% and 11% of government visits from the region.
Although the geographical distance between Slovakia and Latin America is high, this need not be an a priori barrier to trade. The development of economies and purchasing power are particularly important. For example, Tokyo is about the same distance from Bratislava as the capital of Brazil, but imports from Japan are 8.5 times larger than from Brazil and Slovak exports to Japan are 2 times larger than to Brazil.
Slovak embassies are currently located only in Brazil, Argentina, Mexico and Cuba. In the past, back in the 1990s, we also had a presence in Chile, Costa Rica, Nicaragua, Peru and Venezuela. In order to strengthen our representation in the EU Member States, we had to gradually close these offices by 2004.
Overall, of the 59 bilateral agreements signed with Latin American countries, Cuba accounted for the largest number (up to 32% of the region’s total), followed by Brazil at 13.5%. Although the government signed a double taxation treaty on its last visit to Brazil, a more important treaty was reached on 6. December itself, the European Union with MERSOCUR (Brazil, Argentina, Paraguay, Uruguay), which has been negotiated for 25 years.
Trade relations largely replicate the marginality of political relations with Latin America. Slovak exports with the entire Latin American region are in percentage terms on a par with exports to Croatia or Serbia. Also, imports are on a percentage level with all imports from Turkey. This creates considerable scope and potential for the development of trade and investment relations.
The Slovak Prime Minister’s visit comes at a time when the entire Latin American region is the focus of attention from the EU or China itself. In November, the G20 summit is held in Brazil. Chinese President Xi Jinping arrived Brazil with hundreds of businessmen and concluded more than 40 cooperation agreements worth billions of dollars. A few days earlier, the Chinese President inaugurated the port of Chancay in Peru, which became the first Chinese-funded port in South America. The port is part of China’s broader One Belt, One Road initiative, which aims to strengthen trade links between Asia and Latin America and more easily connect logistics routes and import critical minerals (such as lithium), among others, which the Latin American region is rich in. In addition to the Chinese president, the crown prince of the United Arab Emirates Signed by with the Brazilian President on the establishment of a joint mechanism aimed at promoting Emirati investment in strategic sectors in Brazil.
In early December, the European Union signed an agreement with MERCOSUR countries to cut tariffs on more than 90% of goods, creating a new market for 700 million people, with the region exports more than 60 000 European businesses, half of them small.
However, the MERCOSUR agreement still needs to be approved by the European Parliament and ratified by the Member States, several of which – France, Austria, the Netherlands, Italy and Poland – have expressed their opposition to the agreement. However, despite the agreement, easier EU access to critical minerals in the region may continue to be complicated by China’s rapid acquisition of rights to extract these minerals in the region. For example, in November, China Nonferrous Metal Mining Group bought Brazil’s Mineração Taboca. For the EU, therefore, a free trade agreement may not be an automatic route to rapid diversification of its supply chains in critical minerals.
Interest in Latin America is growing globally. The key will be how Slovak business circles will establish and subsequently develop further cooperation with partners in the region. This step, after the actual opening of the doors by the Prime Minister, is the next phase in the development of export-investment opportunities.
Author Filip Šandor, Faculty of Natural Sciences, Comenius University Bratislava, EXPORT ANALYTICA
