This potential has been recognised by both countries’ governments through a series of memoranda of understanding agreed over the last decade. These cover agriculture, mining, education and training and energy as well as health cooperation and formalising of political consultations.

In 2006 Australia and Mexico initiated a process aimed to strengthen trade and investment between the two countries, which included the mooting of a free trade agreement and a jointly hosted Joint Trade and Investment Commission in Mexico City in April 2010.

Established exporters

In the last 10 years bilateral trade between Australia and Mexico has increased by almost 200 percent and Australian export in trade and services is now valued at approximately $803 million.

Coal is the most significant export, having more than tripled since 2007 and accounting for over half of the total value of exports. “Beyond coal there are important opportunities in the energy sector,” says Radek Divis, Austrade’s trade commissioner in Mexico. “One of those is in engineering and consultancy services. Another area of opportunity is in the sale of mining equipment, technology and services.”

Other Australian exports include primary industry exports such as live animals, meat, dairy, wool, leather and wine; building products, IT and electronic technology; professional and financial services and tourism.

In spite of its dependence on the United States as its major trade partner, which meant the Mexican economy took a king hit with the global economic crisis, in 2010 the banking system remained strongly captalised at around 15-16 percent and infrastructure investment reached a historic maximum, providing a positive environment for continued growth for exports in these areas. “There’s major investment going on in improving infrastructure in roads, airports and ports,” Divis reports.

Existing exporters

The Mexican government has pursued an agenda of modernising the energy sector since 2000, with large budgets assigned to the three leading federal agencies for traditional energy sources. Mexico has also aligned itself with environmentally focused initiatives and is a potential market for liquified natural gas, while the oil industry continues to generate demand for related equipment and technology.

Similarly, the long established mining industry (silver, bismuth, lead, tin and copper) is well regulated, attracting investment and direct participation from entrepreneurial Australian companies as well as technolgy and service providers.

Mexico is Australia’s fifth largest market for education and training, with increased demand for training to increase productivity and skills across the major energy, mining, agriculture and food processing sectors anticipated as a flow-on effect from current governmental reforms intended to boost the economy.

“Mexico is looking to increase its proportion of liquified natural gas in its supply and in its energy mix. In the next few years I think there will be opportunities for Australian suppliers of LNG exports and the whole area of clean or alternative energies which is also expected to increase as part of Mexico’s energy production,” Divis predicts.

“While only 19 percent of businesses exported to Central and South America in the past 12 months, almost two-thirds of those surveyed expect to increase their orders to the region in the next year,” noted Gary Edstein, senior vice president for Oceania at DHL Express. He said the results show Australian exporters’ resilience and nimbleness in targeting emerging economies early to boost flagging profits.

Tim Harcourt, chief economist for Austrade adds that Brazil has joined Asia as a key engine of growth in the global economy, attracting the focus of Australian exporters and investors.

“Brazil has strong macroeconomic management under the administration of President Lula and approximately 20 million additional middle class Brazilians are expanding their purchasing power at home and abroad, making it an attractive destination for Australian exporters,” he said.

The annual survey found that exporters are optimistic for the future with 53 percent forecasting an increase in orders in thenext three months and 69 percent in the next 12 months, equaling the highest recorded confidence in the survey’s eight-year history. The last 12 months left exporters with lower than expected sales; only 38 percent of the 60 percent surveyed recorded an actual rise.

“In 2009, world trade contracted by the largest amount in 70 years and Australia was the only industrialised country to achieve positive export volumes; a remarkable achievement by Australian exporters,” said Harcourt.

These results show that exporters are looking beyond the recent global economic downturn and are just getting on with business. The exchange rate is now their biggest concern, although “exporters are learning to compete overseas even with a high dollar,” he said.

Exporters are still cautious, acknowledging that selling overseas still has its challenges.

“As more Australian companies look to expand their business into emerging markets, programs that provide financial and on the ground support for exporters are critical,” said Edstein.

A mechanism exists under the Patent Cooperation Treaty (PCT), administered by the World Intellectual Property Organisation (WIPO), whereby applicants can make international patent applications, however this merely simplifies the process to make national applications in each PCT member state (of which there are over 125) and protects the applicant’s rights to a national application for a limited power of time.

Similarly with trade marks, international registrations can be made via the Madrid Protocol (to which there are currently 84 member states, but of Latin American countries, only Cuba is a member state) and the Paris Convention (to which there are over 100 members), however there is no mechanism in place that provides international ‘blanket’ patent/trademark protection.

Significant benefits arise from these international treaties/conventions, however many applicants and/or patent/trade mark owners misunderstand their international IP rights. Depending on the status of any patent/trademark application with IP Australia, further applications can leverage off those IP Australia applications courtesy of these treaties/conventions.

All Australian businesses that currently operate, or intend to operate, in the Latin American market should review their current IP rights in relation to the region.

IP applications in Latin America

National applications need to be made in each individual country in Latin America and in some countries, for instance Brazil, the process can take a minimum of three years until final registration. In general, however, the process takes approximately two years from application until final registration, presuming that no objections are raised by the authorities or the public.

All applications need to be filed in Spanish, except Brazil, which requires that the IP Rights in Latin America application is filed in Portuguese, and those translations need to be certified.

The applicant may choose to have a local representative in that country of application, and that relationship will need to be evidenced in the form of a power of attorney from the applicant to the agent.

Just like those applications in Australia, the application will need to include designs and/or drawings (in the case of patents), logos, descriptions of those goods/services in which it seeks to protect its trademark and so forth.

Applications are reasonably straightforward, however the authorities can take a hard line on accepting some trade marks in the event of the prior registration of a same and/or similar trade mark, and even in some cases where the chances of there arising confusion in the market are minimal. Any objection raised by the authorities, can be appealed by the applicant.

Practical Tips

It is common to see Australians come to Latin America and market their product and/or service, for example through various trade shows, set up, trade and then realise they have no protection, or even worse are in infringement of a third party’s IP rights.

Before setting up, ensure your IP rights are protected and check whether you can use your IP. This can be achieved by conducting quick and inexpensive searches.

From a business perspective, we have found that clients that have had their IP in order send a good message to the marketplace as they are strategically and effectively able to transact with their buyers, especially in the case where the buyer is a large multinational, which in some cases require that you are the owner of the IP rights prior to entering into a purchase contract.

In most Latin countries, the rule of law is adhered to and strictly enforced, regardless of whether or not you are a foreigner, so protection of one of your business’ most valuable asset is a worthwhile cause.

—Harris Gomez is the managing principal of Latin American specialists, the Harris Gomez Group (hgomezgroup.com)

“Latin America has tremendous potential as a regional trading partner for Australia,” he said. “I will be pursuing opportunities for Australia in mining, energy and clean energy during this visit.”

In Mexico, Crean will participate in a high-level meeting of the Joint Trade and Investment Commission with his Mexican counterpart, Gerardo Ruiz.

In Chile, Crean will visit an earthquake reconstruction site as the first Australian minister to visit Chile since the devastating earthquake of February 27. The Australian Government has provided $5 million in emergency and reconstruction assistance.

His Argentina stop will involve the promotion of Australia’s capabilities in clean energy and mining technology in conjunction with a Clean Energy Business Mission organised by the Council on Australia Latin America Relations, which will also carry through to Brazil.

Of all the four BRIC (Brazil, Russia, India and China) economies, Brazil is the country that is the closest to Australia from a cultural and social perspective. Brazilians share many of the same passions as Australians—the beach, sport, football, the great outdoors and a warm and sunny climate—and this provides a great start for those looking to engage with a country of 180 million people, which is rapidly growing in confidence as an emerging economic power.

Brazil’s traditional strengths are in mining and agribusiness and in some ways resembles Australia as a leading exporter of commodities, notably orange juice, coffee, soy, beef, and chicken, and resources, particularly iron ore. I remember last year standing on the quay of China’s largest steel producer Baosteel in Shanghai watching the large tankers arriving from Australia and Brazil full of iron ore and wondering whether we should view Brazil as a friend or competitor.

My answer to this is that our opportunities to engage with Brazil, a country that will during this century dominate the global economy, far outweigh any competitive threats.

New exporters

As with all of the BRIC countries, future economic growth in Brazil depends on strong local domestic consumption, as opposed to exports to the cash-strapped developed world, and the Brazilian Government has introduced measures to boost domestic spending via lower interest rates, an easing of capital requirements to Brazil’s banking system, designed to stimulate housing and car loans, and reducing unemployment via a range of spending initiatives.

Brazil’s aspirational population of more than 180 million is the sixth largest in the world, and the largest in Latin America, growing at approximately 1.3 percent per year. Its population is relatively young, with 42 percent under the age of 20, and the youngsters have a strong appetite for Western-style consumer goods, brands, fashion labels, technology and gourmet foods.

The population is 80 percent urban, with approximately 30 percent living in the 10 principal metropolitan areas, including São Paulo and Rio de Janeiro which have populations of around 19 million and 12 million respectively. Some 14 other metropolitan areas have populations of more than 1 million. This makes it relatively easy to access the retail markets due to the high levels of concentration in urban centres.

Also, Brazilians are generally keen to spend rather than save, as evidenced by the large numbers of new shopping malls, outlets, hypermarkets, supermarkets and convenience stores offering the usual wide range of services—restaurants, coffee shops, fitness centres, beauty parlours, shoe repairs, post offices, bank services and dry-cleaners—and providing entertainment with cinemas, cyber-cafés and play areas for children.

There is also a rapid rise in the middle class, with a growth rate of more than eight percent of people per annum becoming increasingly affluent and upwardly mobile. Being one of the world’s ‘Big Rapidly Industrialising Countries’, Brazil’s growing middle class presents opportunities across the board for Australia’s retailers, from food and beverage, cosmetics and clothing to some of our more premium products, notably gourmet food and wine.

The exports of Australian wine to Brazil lags our success in other countries and represents only one percent of our total wine exports. While strong, traditional and tariff-free competition exists from Brazil’s South American neighbours, particularly Argentina and Chile. Australian wine producers can and must compete in the more prestigious, high value, niche sectors of the market where there is a strong appetite for our premium labels.

While virtually every Australian winemaker is currently focused on the burgeoning Chinese wine market, some unique and lucrative opportunities exist in Brazil for those brave enough to cast the net more widely.

Existing exporters

With Brazil’s primary strength as a resource and agricultural based economy, similar to ours, leading Australian companies offering high value-adding services to the agribusiness and resource sectors, including technology, software, engineering and consulting services, are highly sought after by Brazilian producers looking for greater efficiency, increased production and yields from their existing activities.

Brazil has a vast land mass, much greater than ours, and much of its arable land is available for farming activities and there are new sites under exploration for mining; Australia has much to offer Brazil as it seeks to modernise and upgrade its land economy.

In addition, while Brazil’s construction industry has been hit by the global economic slowdown, the government’s Growth Acceleration Program launched in 2007 is committed to supporting investment in infrastructure projects. With Brazil’s large fiscal stimulus package—US$254 billion, representing a significant 19 percent of gross domestic product—there is widespread activity across many infrastructure projects including road, rail, power and the construction of low income housing.

In addition, housing, commercial and tourism construction is also set to receive a sizeable boost from the preparations for the 2014 FIFA World Cup, which is estimated to inject a further US$43 billion into the infrastructure sector. With Australia’s Olympic experience in designing, constructing and fitting out sporting venues, opportunities exist in many areas for Australian architects, builders and landscapers.

Gary Edstein, DHL Express’ senior vice president for Oceania, says this is largely because new exporters tend to be small businesses that are more nimble than their seasoned counterparts.

“They’re identifying the opportunities, they’re a lot smaller so they can react faster, and my belief is that they can manoeuvre from one market to another whereas a larger exporter with deep roots in Asia or the USA can’t respond to such a significant crisis as quickly,” says Edstein.

The results showed 64 percent of new exporters, those exporting for less than five years, expected an increase of profitability in the next 12 months against just 34 percent for established exporters of more than 20 years.

Edstein was pleased with the amount of optimism shown in the results, particularly with regard to those smaller exporters: “I’ve always found that Australian exporters are quite resilient. I look at the large ones that continue to perform but it’s good to see the small exporters seem to be more positive this time around.”

Middle East, not Asia
Exporters also turned toward the Middle East as a market destination, with 56 percent of respondents confident of increasing sales to the region in the next 12 months. China slipped from first to fourth position on the ranking, falling nine percent from last year.

New exporters saw the most opportunities in the Middle East, Europe and Africa, whereas seasoned exporters still looked to Asia for sales.

“The Middle East may be a little more protected regarding this financial crisis,” explains Edstein. “It has hit hard the USA, Europe, within Asia, but the Middle East, with its wealth in oil, seems to be a bit more protected. It’s a strong market for exporters.”

Money too tight
Exporters also expressed a lack of access to trade finance as a barrier, with 60 percent indicating difficulties. Two in three exporters use advance payment as an alternative to finding finance.

“It’s hard to get finance these days and banks are being a little bit more cautious as to what they lend out,” notes Edstein.

He says Austrade’s Export Market Development Grant (EMDG) scheme was a key confidence booster, especially for new exporters in difficult markets. The Barometer findings revealed that more than three quarters of Australian exporters supported the use of grants to assist with their exporting activities.

“The Barometer shows that new exporters are reluctant to enter Asian markets. China and India offer tremendous opportunities but also provide significant barriers and export support programs especially those directed at new exporters are critical,” says Edstein. “The initial support is good when you’re trying to build your market.”

Future of Australian exports
Edstein says export confidence was well founded, with volumes due to pick up after the global financial crisis affected demand late last year.

“Inventory levels are way down because when this GFC hit last September, a lot of businesses decided to reduce their inventory holding,” he explains. “They now need to replenish those stocks.”

Other elements such as the fluctuation Australian dollar may pose a challenge, but the outlook is mainly positive, he believes, with online exports making businesses more flexible and quicker to react to opportunities.

“Australian exporters seem to be using e-commerce and they’re sourcing new markets, not just the traditional markets. They’re being smart and using the power of the web to export,” says Edstein.

“Seasoned exporters have traditional markets and sometimes they rely too much on those traditional markets whereas these new exporters seem to be more savvy and more flexible and they can respond quicker. With this huge opportunity online they can go to the world and with our type of distribution capability we can take them to any part of the world.”

He says lessons from the Asian Financial Crisis will hold Australia in good stead for this GFC: “Australia seemed to weather that quite well. What we saw back then was a similar pattern where exporters moved quickly from one market that may have been deteriorating, to another market opportunity.”

And even in this global crisis there are opportunities, he adds: “With this being a global financial crisis, which markets have those? What we’re seeing in this survey is the new exporters see the Middle East and Africa and to a lesser extent South America as places with opportunities.”

The DHL Export Barometer collated responses from more than 850 Australian exporters.

Emerging economies will outpace industrialised countries, growing 0.7 percent this year and 4.1 percent in 2010.

“Some real economy indicators are improving, anticipation surveys of investors and consumers are pointing up and financial players are showing a renewed appetite for risk,” said François David, chairman of Coface.

The agency has maintained its lowered ratings for most European countries but has downgraded Austria, the Netherlands and Finland and put Portugal, Slovakia and the Baltic countries on negative watch as the global recession begins to affect their economies.

And while Latin America has remained steady, Central America has shown some damage from exposure to the North American downturn.

The most positive signs come from the Asia-Pacific region with China and India the strongest in recovery. However, Coface has retained the negative watch placed on China’s A3 rating in January 2009 due to recurrent problems of private sector companies, where the default payment risk is the highest.

DESA’s report noted: “At present the stimulus is very unbalanced. Eighty percent of the stimulus is concentrated in developed countries, while most developing countries lack the fiscal space to provide social protection and counteract the consequences of the crisis.”

A more balances response would mean an additional $500 billion for development finance in emerging economies, it suggested.

Developing nations currently struggle with the crisis because investors shy from ventures they view as more risky and they tend to produce commodities for which global demand has dropped.

The department also reported that more than 100 million could stay or fall into poverty as the global economy contracts, up to 80 million from Asia, another 16 million in Africa and 4 million in Latin America.

The $4.5 billion will support technology and jobs in the cleantech sector and is designed to stimulate economic activity in this area as well as help Australia reach its future emissions targets. Coal, solar and technology research were the big winners in this space.

The government’s trade strategy will focus on linking businesses to global commercial opportunities through inbound investment and exporting.

“Australia has the potential to become a world leader in clean energy and related technologies,” said Minister for Trade Simon Crean.

“With the global recession creating a more competitive market for investment attraction, the strategy will lift Australia’s profile as a destination for investment in clean energy.”

The strategy will be implemented by Austrade, encompassing renewable energy, carbon capture and storage, energy efficiency, water technologies, sustainable urban design, and waste management, to export markets such as China, India, ASEAN, Latin America and the Middle East.

The $106.5 million in extra funding will target three key areas: diplomacy and national security; trade; and protection of Australians abroad.

The Government has allocated another $106 million over four years “to enhance national security and commercial interests through further engagement with countries and regions of growing economic, security and strategic importance for Australia including India, Pakistan, Africa and Latin America,” said Minister for Foreign Affairs, Stephen Smith.

Two new Australian Embassies, in Jakarta, Indonesia, and Bangkok, Thailand have secured funding, and the department will look at an Australian Embassy in Kabul, Afghanistan.