A New Transatlantic Relationship

Spain in the 18th century had a major role in fashioning the genesis of the United States. Today it is necessary to deepen relations with the North American country, a strategic place for any company with global aspirations.

Last September, King Felipe VI made his first official visit as head of state to the U.S., where he met with President Obama. The visit marked the 450th anniversary of the city of St. Augustine, Florida, the first European and Spanish settlement in that country.

The visit had a historical and cultural depth that is not always apparent on both sides of the Atlantic but that shows the depth and character of our transatlantic link.

During the four-day visit, the king presided over the presentation of the Bernardo de Galvez Award, which recognizes the work of individuals and institutions who, through their work, have promoted cooperation between Spain and the United States. This year the prize was awarded to Ford Motor Company in the person of Mark Fields, CEO of the company, to recognize the importance of the Almussafes factory in the industrial development of Valencia and the components industry. From 2011 to 2015, Ford invested a total of 2.3 billion euros – approximately $2.5 billion at today’s currency exchange rate – thus creating 3,000 new jobs.

The life of Bernardo de Galvez serves to illustrate the importance Spain had in the creation and subsequent development of the personality and character of the U.S. and the close link between the two countries. Appointed governor of Louisiana in 1776, he played a key role in the American War of Independence, negotiating Spanish financial support and also actively participating in some of the key battles of the war, including his decisive intervention in the Battle of Pensacola in 1781, where Galvez, outnumbered, defeated the Royal Navy with the motto “Follow me he who has honor and courage.”

This battle made him a Spanish and an American hero. Such was his influence and recognition, legend has it, that during the military parade of July 4, Galvez marched on the right-hand side of George Washington. This honor was recognized last year by the U.S. Congress, which granted him honorary citizenship and placed a portrait of him in the Senate, recognition granted to date to only eight people, including Winston Churchill, Mother Teresa and Lafayette.

In Spain the great influence exerted by our country in the history of the U.S. since the formation of the first settlements to Spain’s role in the War of Independence has gone unnoticed. In this regard, our strong historical, linguistic and cultural ties are elements that play a role in our favor and would be a good idea to promote. In a letter published by the Philadelphia Press on July 20, 1883, the 333rd anniversary of the Spanish settlement of the city of Santa Fe, New Mexico, the philosopher and poet Walt Whitman noted that the U.S. was not formed exclusively by the influence of the British Isles but “to that composite American identity of the future, Spanish character will supply some of the most needed parts. No stock shows a grander historic retrospect — grander in religiousness and loyalty, or for patriotism, courage, decorum, gravity and honor.” This is a powerful latent positioning that we must learn to take advantage of.

It is necessary to recover the historical and cultural position of our country in negotiating the Transatlantic Trade and Investment Partnership.

But what do Spain and the United States have in common, these celebrations and awards, and the TTIP? These historical and cultural ties must, in addition to illustrating the importance that Spain had in the genesis and subsequent development of the personality and character of America, strengthen and revitalize, through the TTIP, the close bond that unites us.

But this must happen not only by opening up new investment opportunities for Spanish companies but also by offering new markets such as Asia, where Spain is underrepresented and where the opportunities provided by the Trans-Pacific Partnership, if they can take advantage of them, are enormous. Therefore, in the endless discussions about the problems and benefits of TTIP it is necessary to delve into certain indirect benefits. If they know how, Spanish companies can open up new opportunities for export and direct investment.

In the areas of trade and investment we are still far from reaching our potential. In 2014, sales from Spain in the U.S. accounted for just 4.4 percent of the total, far from the clout of the U.S. market in the world economy. Despite efforts to diversify our export mix, in recent years nearly half of our exports were concentrated in just five trading partners, comprising France, Germany, Portugal, Italy and the U.K. With the advent of the crisis, Spanish companies have made an effort to strengthen and diversify its exports.

This low presence of our exports in the U.S. is also related to the low investment presence in that country. Again, despite the strong growth in investment flows from the complicated experience in 2008, and despite the fact that they have increased by 56 percent in sectors such as banking, construction and franchises, the fact is that today only one in every $57 invested by foreign investors in the U.S. is Spanish-owned, an unequivocal sign of great potential.

The United States has many features that make it an extremely attractive place not only to sell but also to invest. In fact, the first is very difficult to achieve without the latter. It has great market potential, and its political and institutional strength as well as its high level of competitiveness and ease of doing business make it a strategic country in which to locate investments and from there, approach other markets in Latin America and the rest of the Pacific basin now that it has signed the TTP.

This treaty adds up to be attractive to the Spanish subsidiaries in the U.S. who will see their sales and investments in the countries of the Pacific community facilitated. The next TTIP in full European negotiation is a strategic piece that can give momentum to the Spanish investments in the U.S., favoring a more diversified mix of our exports, which in the future should be a source for anti-fragility of the Spanish economy and for improving our risk profile.

The United States is a strategic place for any Spanish company committed to being a global company, or at least to being international, because of the United States’ powerful domestic market and position as a support platform to reach other markets. In this sense, we can recover the historical and cultural position of our country in negotiating the TTIP through the European Union to develop a new transatlantic relationship, with a renewed personality that tightens and strengthens the bond that unites us. No other European country has a better historical heritage with the United States. Also, our economic structure has a prime recipient: medium enterprises that take advantage of it.