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03|10|2017

US bets on Spain as key ally over the next few years

According to a study signed by Jaime Malet, Chairman of AmChamSpain, in September 2017, Spain has a unique position, given its location, economy, and international relationships, to serve as a key ally to the United States in the coming years.

Currently, approximately 1,000 American firms operate subsidiaries and branches in Spain. These companies employ more than 150,000 Spaniards, notably in the automotive, chemical, manufacturing, pharmaceutical, consumer goods, IT, and services industries.

This situation offers great opportunities for collaboration for the future in different sectors of interest such as oil, gas or finances.

Oil and gas
As a solid partner to the U.S., Spain can play an important role in the oil and gas sector. If, as demanded by the EU, France finally opens up its gas connection with Spain, Spain, which receives gas from Algeria, can play a role in securing the currently overly Russian dependent European gas supply. The U.S. could soon become one of the largest exporters of LNG with a production capacity of 60 million tons per year, which presents a unique trade opportunity with Spain. Given that Spain has a larger regasification network than any European country with a large coastal presence, it can grow into one of the largest importers of American LNG and provide access to European gas networks. In fact, in 2016 Spain received its first LNG shipment from Louisiana.

Africa
Spain can operate as an investment and logistics hub for American SMEs looking to grow and establish their foothold in European markets in a safe, business-friendly platform. But Spain is not only a good gateway for Europe, the American Chamber of Commerce in Spain has been backing a plan to use the Spanish Canary Islands, the most southern European territory, as an FDI hub for U.S. firms spreading into West Africa (port and airport logistics, specialized banking, call centers, etc.).

The role of Spain as a gateway to the rest of Europe and Africa is further exemplified by the recent implementation of a high-speed undersea data cable spanning from Virginia to the Basque Country.

This initiative, led jointly by Facebook, Microsoft and Telefónica, is the fastest cable of its kind to cross the Atlantic Ocean (a bandwidth of 160 terabits per second—more than 15 million times the bandwidth of an average home internet connection). Its Installation was meant not only to improve connectivity between the US and Spain, as well as the rest of Europe, but also to allow for future connections with other undersea cables in order to reach areas of Africa, the Middle East and Asia.

Spain’s appeal
The U.S. since 1960, has been the single, largest foreign investor in Spain. According to the report, Spain provides an attractive playing field and business friendly environment for American subsidiaries.

The country has a well-educated and skilled work force (3 of the 20 top business schools worldwide are Spanish) and excellent infrastructures. It also has a relatively large domestic market of 46 million people supported by an annual inflow of more than 65 million tourists, being one of the top three tourist destinations.

Furthermore, many U.S. businesses in Europe – especially financial ones - are looking for an alternative to the UK after Brexit. Large U.S. asset managers, like Blackrock and Fidelity, are among the biggest investors in the major, publicly traded Spanish companies (IBEX 35). Managers of these firms know that major Spanish cities have stable business environments and highly developed financial systems with unparalleled quality of life.
 

Last updated: 03|10|2017

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