Interview with António Martins da Costa, President of the American Chamber of Commerce in Portugal (AmCham Portugal)

António Martins da Costa, President of the American Chamber of Commerce in Portugal, talks about AmCham Portugal and the path followed since it was established, seven decades ago, up to the present day, having become a true two-way highway. With the primary objective of boosting American investment and trade in Portugal, it began at some point supporting also Portuguese trade and investment in the USA.

AmCham Portugal main purpose is to develop and facilitate economic and commercial relations between Portugal and the United States of America (USA). How is this support provided?

AMCHAM positions itself as a platform that facilitates and promotes business development between the two sides of the Atlantic. And it does so through its information dissemination, training and counselling actions – carried out in conjunction with its associates -, promotion of networking events and launching and monitoring business missions in both countries.

In order to respond to the challenges of the present world, this Chamber is organized into focus groups, which address some of the most relevant current issues for the business world: Digitisation, Sustainability, R&D and Education, Healthcare and Tourism.

How is the relationship between these two countries today?

Excellent. Based on the traditional historical ties between the two nations – remember that Portugal was one of the first countries to acknowledge the independence of the USA -, on the strong presence of a successful community of Portuguese descendants in America, the geostrategic position of Portugal in the world – assisted by the fact that Portugal is a founding member of NATO – economic have been reinforced throughout the times. More recently, the inter-Atlantic flow of academic and management staff, the latter more closely linked with the investments that have been made in both countries, has helped to consolidate this path.

This year marks the 70th anniversary of AmCham Portugal. What is your assessment of the company’s activity and what are its major achievements?

AMCHAM was established after the end of World War II, in 1951, by a group of American businessmen who wanted to stay and invest in Portugal. If, on a first phase, the Chamber focused rather on the management and promotion of American investments and trade in Portugal, after a certain time started also supporting Portuguese trade and investment in the USA. The current path was thus expanded, transforming it into a two-way highway.

At present, AMCHAM accommodates, and in particular, on its board, the large American companies operating in Portugal, as well as the largest Portuguese investors in the USA.

During the year 2021, is there a specific program planned to mark this date? Coinciding with the Portuguese Presidency of the European Union, will there be any interaction with AmCham Europe to enhance economic relations in Portugal, the European Union and the USA?

In 2021 two facts coincide: the 70th anniversary of the Chamber and the Portuguese Presidency of the EU, during the first semester. And to this end, we decided to prepare a program consisting of a set of five webinars, carried out in conjunction with our counterpart AMCHAM Europe, on the theme of the Portuguese Presidency, and with the participation of prominent figures from the European Commission and the US administration. We will also be hosting a “Transatlantic Business Summit”, at the beginning of the second semester, focused on the geo-strategic and macroeconomic perspective of the inter-Atlantic relationship, as well as the already traditional “AMCHAM Tributes” gala event, aimed at awarding companies and personalities that stand out when it comes to the intensification of relations between both countries.

What are the main characteristics that make Portugal an appealing country for American companies?

Several factors make Portugal an appealing country to establish commercial relations with and to invest in, as stated in the Annual Competitiveness Report of the World Economic Forum. Among them, the following stand out: the quality of infrastructures, healthcare services, higher education, R&D initiatives and the availability of qualified engineering and management staff. Adding up to this there’s also hospitality, security, fluency in English, cost of living and, in some cases, national or local incentives for investment. Macroeconomic stability – Portugal has no history of financial default, despite the many economic and financial crises the country has experienced – and its political and social stability, making the country also and appealing destination to do business.

According to the second edition of the “Barometer of American Companies in Portugal”, compiled by AmCham and PwC, American investment in Portugal, between 2014 and 2019, amounted to $ 1,176 million (about € 967 million), corresponding to about 4% of the total investment made in the country.
How many companies are currently operating in Portugal and what are the main focus areas?

The number of investments is even more significant if we consider that it represents 11% of all Foreign Direct Investment (FDI) in Portugal. We are talking about 1,000 companies employing 50,000 people, 50% of whom have been in Portugal for more than 10 years (28% for more than 20 years), and whose total sales represent 4.5% of the Portuguese GDP. More than 3/4 of sales are originated in the wholesale trade sectors (46%) – pharmaceutical products, computer systems, tobacco, machinery and equipment, cars -, in manufacturing industries (19%) and information and communication activities (12%). Also fairly relevant is the fact that 59% of the investment in Portuguese startups comes from the USA.

Portugal was recently awarded second best Country Brand in Europe at the “Country Brand Awards”, based on the analysis of factors such as the manner how the health crisis caused by Covid-19 was managed, during the first wave, and the ability to create a tourist brand and an economic brand. How does the United States see this recognition?

Certainly in a very positive manner. Not only do the investment and trade figures reflect this, but also the increase in the flow of American tourists in our country is an expression of such a vision: it increased 23%, before the pandemic, reaching a record number of 1.2 million visitors. In this regard, the work carried out by AMCHAM’s main partners, with emphasis on the American Embassy in Portugal, FLAD and AICEP, has been of the utmost importance.

At the same time, the USA is currently the fifth largest destination for Portuguese exports (and the first outside the European Union) and the second non-EU country to visit Portugal. What could be the reason for such a good relationship between Portugal and the United States?

In addition to the American investment in Portugal, it’s important to highlight the position of the USA as a relevant export market for Portuguese companies. At the moment, they are the fifth-largest destination for Portuguese products and services (worth almost € 6 billion), and the second outside the EU (it was the first before Brexit). In addition to the aforementioned factors – history, culture, alliances – the dynamics generated by the process of globalisation of economies and information, cleverly used by entrepreneurs, has undoubtedly assisted in consolidating these ties. And we should also acknowledge the role of both countries’ diplomacy, which has played a significant role to establish such a good relationship.

What attracts Portuguese companies to the American market? In which sectors are there better opportunities?

It’s difficult to single out a particular sector. The USA is “The Market” par excellence, with a consumption capacity above any other country, with very strong competition between players, and a permanent focus on innovation and more efficient use of resources, to achieve the best outputs with the least use of inputs. It is also worth mentioning the sophisticated machines of financial, legal, commercial, communication and marketing services offered by this country presents. Hence the importance, for those wishing to enter this market, to perform appropriate market studies in advance, design strategies and try to find local partners to assist the development of their business. But there are undoubtedly sectors where opportunities are now greater than others, such as everything relayed with the energy transition and digital transformation, but also in the healthcare sectors, now accelerated by the pandemic crisis, or infrastructure, needing huge investment.

In your opinion, what can American companies teach Portugal, in terms of trade, business, tourism and skills training?

The American business system has taught the world a lot, even with the mistakes that have been made and the solutions found to repair and correct them. The business model developed in the USA has been taught for long in the best international Business Schools – where the Portuguese schools also stand out – and where topics such as market efficiency, financing systems, regulation, corporate governance (now included in the broader concept of ESG, Environment, Social, Governance), compliance, risk management and the principle of sustainable value creation are studied and disseminated as best international practices.

The large Portuguese companies are familiar with these issues, they apply them in the most appropriate way to the markets and societies they operate in and so therefore it’s essential to extend these practices to a larger number of companies, particularly SMEs.

AmCham recently promoted the conference “5G, Cybersecurity and Digital Transformation”. The US already has the first commercial 5G offers. Portugal is lagging at this level. Do you think we can lose competitiveness at a technological level?

Portugal is lagging in this matter. And the adopted principle of increasing competition through auctions – which is always healthy – in this case seems to go in the opposite direction to what other EU countries are following, promoting the integration of operators, to guarantee an investment capacity able to cope with the current advances in the USA and China. It is, therefore, necessary to make an additional effort articulated between operators, companies and the State, to ensure that there will be no loss of competitiveness in the country.

What role can 5G play in promoting global trade? What new opportunities could arise?

As an example, even before the pandemic, 60% of Black Friday sales in the USA were made using mobile devices. With the pandemic, this trend has accelerated. Since 5G is a technology that offers greater bandwidth, lower latency and an exponential connection capacity of equipment in a given area, its effect on consumption will be of great impact. We will see a significant change in the consumer experience, with the incorporation of virtual and augmented reality solutions in mobile equipment, and with the use of artificial intelligence engines in the analysis and advice of purchasing behaviours. This will have also an effect on the production and distribution logistics chains, adapted to the new processes, thus ensuring greater efficiency and shorter product development and delivery times.

How are American companies helping Portugal in the pandemic?

The best way to visualize the support of American companies in dealing with the pandemic crisis in Portugal will be by watching the set of testimonies, in the form of short videos, on AMCHAM’s website and many social platforms, under the title “We Stand Together”. These are reports from some relevant AMCHAM member companies, many from its Board, from pharmaceutical, technological, industrial or consulting services, which illustrate what has been and is being done, either individually or as a whole, for the benefit of Portuguese society. The Embassy was a co-promoter of this initiative.

What are AmCham Portugal’s main challenges for 2021?

Keep supporting member companies in this difficult period of pandemic and economic crisis, helping them to find solutions for the future, through the services we offer, with particular emphasis on hosting webinars and other events as mentioned above. At the same time, we seek to expand our service offer and try to increase our membership base, always bearing in mind the principle that strong economic relations are an important factor in strengthening broader relations between two countries. In this case, between these two nations, of a reputed history and which respect each other, with aligned views as regards the challenges mankind faces today.