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7. Foreign trade and investment

Rapid growth in international trade and foreign investments in recent years has made Spain one of the most internationally-oriented countries in the world.

With regard to the trading of goods, in 2019 Spain was ranked 16th in the world as an exporter and 15th as an importer; while in the trading of services it occupies 11th place as an exporter and 18th place as an importer15.

Spanish exports and imports of goods account for 1.8% and 1.9%, respectively, of the worldwide total, while Spanish exports and imports of services represent 2.6% and 1.5% respectively.

The breakdown by industry of foreign trade is relatively diversified, as can be seen in the following table:

Table 7

Capital goods19.8%Capital goods22.6%
Food19.6%Chemical products18.0%
Chemical products15.5%Consumer goods12.6%
Automobile industry14.8%Food12.4%
Semi-manufactured non-chemical products10,1%Automobile industry11.1%
Consumer goods9.5%Energy products9.8%
Energy products4.8%Semi-manufactured non-chemical products7.0%
Raw materials2.3%Raw materials3.1%
Other goods1.8%Durable consumer goods2.9%
Durable consumer goods1.7%Other goods0.5%
Source: Ministry of Industry, Trade and Tourism. January – December 2020 data.

As would be expected, the countries of the EU are Spain’s main trading partners. Accordingly, during 202016, Spanish exports to the European Union accounted for 60.5% of total exports and sales to the Eurozone represented 53.2%. Imports from the European Union accounted for 51.8% of the total and those from the Eurozone represented 43.9%.

Specifically, Spain’s leading trade partners are France and Germany. Outside the EU, Asia and Africa have displaced Latin America and North America from their traditional role as Spain’s main non EU trading partners.

The positive adaptation of Spanish companies to the new worldwide economic scenario, reflected mainly in the progressive diversification of the markets to which Spanish products and services are directed should also be underscored. Indeed, Spanish exports are to some extent being redirected from the EU to the rest of the world. In this regard, Spain’s share of exports to the EU dropped from 70.1% in 2007 to 60.5% of total exports in 2020.

As regards investment, Spain is one of the main recipients of investment worldwide.

Specifically, Spain is the 11th largest recipient of foreign investment worldwide in terms of stock (and 6th in the EU) with USD 751,510 million. Spain is the 13th largest source of FDI in terms of stock, with a volume equal to USD 606,549 million in 201917.

With a view to making the Spanish economy more competitive and boosting the contribution made by foreign trade to growth and job creation, the Spanish government has adopted a series of measures aimed at enabling Spanish businesses to access the financing required for their internationalization. Noteworthy among the financial instruments approved by the Spanish Government to provide official support for the internationalization of Spanish enterprise are the Foreign Investment Fund (FIEX), the Fund for Foreign Investment by Small and Medium-sized Enterprises (FONPYME) and the Enterprise Internationalization Fund (FIEM), as well as financing lines for investment in the electronics, information technology, communications and infrastructure concessions sectors, not to mention the 2020 ICO International Facility and the 2020 ICO-Exporters Facility.

In the context of the economic crisis caused by COVID-19, additional funding equal to 100 million euros was approved for the FIEX, with a view to making it easier for Spanish SMEs to obtain financing for their internationalization. The Official Credit Institute (ICO) has also processed a number of resources for enterprises and independent contractors, aimed at palliating the economic impact of the crisis through the approval of ICO-COVID-19 lines of security to be used as liquidity and investment instruments, with a budget of up to 100 and 40 billion euros, respectively. Lastly, the Ministry of Industry, Trade and Tourism has submitted a “crash” program to combat COVID-19 with measures whose objectives are focused on mitigating the impact of COVID-19 on foreign trade, promoting an image of Spain associated with competitiveness and excellence in production and keeping the markets open, influencing the EU and multilateral forums such as the OMC, inter alia, against the risks of protectionism and preference for national consumption.

Along these lines, the Spanish Economy Internationalization Strategy 2017-2027, together with the biennial Action Plans (for 2017-2018, 2019-2020 and 2021-2022) was approved. The “Internationalization Support Action Plan 2021-2022” forms part of the Spanish Economy Internationalization Strategy 2017-2027, and its priority objectives are focused on the following three lines of action: (i) to configure the foreign sector as a pillar of growth and employment; (ii) to achieve greater resilience in the production and export fabric; and (iii) to promote a structural change in internationalized enterprises toward digitalization and sustainable development.

By way of a summary of Spanish foreign trade, the balance of payments is set out below.

Table 8

I. Current account24,3897,301
Goods and services35,75316,698
Primary and secondary income-11,364-9,397
II. Capital Account2,8063,159
III. Financial Account24,37410,751
Total (excluding Bank of Spain)87575,430
Direct investment13,28611,689
Portfolio investment-51,94434,077
Other investment47,04233,491
Financial derivatives-7,509-3,827
Bank of Spain23,499-64,679
Claims with the Eurosystem28,860-83,428
Other net assets-6,10719,231

N.B.: A positive sign in the current and capital accounts means a surplus (receipts greater than payments) and represents a net loan from Spain to the rest of the world (increase in assets or decrease in liabilities), whereas in the financial account a positive sign means a net inflow of capital and represents a net loan from the rest of the world to Spain. A negative sign in reserves means an increase.

Source: Bank of Spain. Data from January to November 2019 and 2020.

15WTO “World Trade Statistical Review 2020”.

16Annual data published by the Spanish Ministry of Industry, Trade and Tourism. January – December 2020 data.

17According to the UNCTAD “World Investment Report 2020".