Portugal - USA relations are strong and have great future ahead

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Portugal - USA relations are strong and have great future ahead
Published on 27th January 2020
(7min read)

The relations between Portugal and the United States of America started as early as the USA itself, as an independent country. Following the American Revolutionary War, also known as the American War of Independence, Portugal was the first neutral nation to recognize the United States of America as an independent country and establish diplomatic relations between both entities. 

United States-Portuguese relations started with the foundation of the country

After more than two centuries of bilateral relations between the countries, the Portuguese Minister of Economy, Pedro Siza Vieira, said that they are now at an all-time high. The current standing of United States-Portuguese relations, which he referred to as at a “high-point in our economic history” the minister said a significant part of Portugal’s economic success in recent years has been based on export growth and on the trade relations between the two countries.

Portugal was one of the first countries in the world to recognize the United States, the two have long-established diplomatic relationships, and the connection with the United States is on a par with the one Portugal has with the United Kingdom. The relationship is also one of the three strategic pillars on which Portugal’s geo-economic and geo-political policy is built — the Atlantic, the EU, and the Portuguese-speaking PALOP countries.

Portuguese exports based on the automotive sector and technology

Looking at why Portugal’s exports have grown and what had happened to encourage Portuguese companies to be much more export-orientated, the minister said it was clear that traditional industries and sectors had grown in value through the incorporation of “innovation, knowledge and scientific research” with the ability to “transfer that knowledge and technology” as a major factor explaining why “we have not only improved our traditional activities such as agriculture, textiles, and other products but also how Portugal has developed new activities which were non-existent 20 years ago.

For example, regarding the automotive sector, now the largest in the country, and which didn’t exist in Portugal 20 years ago, last year Portugal joined the “club” of the biggest producers of cars and car parts in the world.

We have attracted new activities such as in the aircraft industry and space, which are growing and which has been the result of the investment Portugal had done in educating its people and developing its technological and scientific sector,” said Pedro Siza Vieira.

The Minister said that Portugal had become a much more open and export-orientated economy with a volume of trade compared to GDP that has gone from 60% to 90% in the past few years and trade relations with the United States have been part of that. “If you look at the trade relations between the US and Portugal over the last five years, the growth has been tremendous, we practically doubled our volume of trade. We have a trade surplus and truly the United States has been a significant part of the way we have grown out of a crisis,” said Pedro Siza Vieira.

The European Florida and San Francisco

Portugal has become a retirement haven in the latest years for European and non-European citizens, through its Golden Visa and Non-Habitual Resident programs, great tax exemptions on pensions and special tax regimes for retirees

Portugal has been considered by many around the world as the European Florida, in a sense that both share warm weather, gorgeous sandy beaches, lively nightlife and focus heavily on the tourism industry. 

Alongside similarities to the State of Florida, the Portuguese capital city, Lisbon, draws some similarities to San Francisco, with its tech start-up scene in Oeiras, for instance. Furthermore, Lisbon is known as The City of Seven Hills, which brings to memory San Francisco’s irregular grounds. Beyond geological characteristics, both cities share the same cable cars and one of their bridges is very similar between each other. We are talking about the 25 de Abril Bridge in Lisbon and the Golden Gate Bridge in San Francisco, of course.

Portugal is great for foreign citizens

A centuries-old bilateral economic relationship also promotes demographic dynamics. Many Portuguese citizens have emigrated to the US in search of their dream life. However, this is not a one-way street and we’ve seen that Portugal also collects interest in more and more American citizens. Maybe because of the affordable prices or good healthcare, together with healthy food and rich gastronomy, a very safe environment, and a soft climate, Portugal is becoming one of the TOP destinations in the world.

Through the Portuguese Golden Visa and NHR programs, Portugal attracts more and more US citizens, different European nationalities (French, Dutch, Belgians, etc…) and also from the Asian countries, mostly from China, Vietnam and Hong Kong. This translated into a growth of wealthy immigrants looking for a safe lifestyle, fresh and healthy food in good climate, beautiful beaches and clean nature in Portugal.

It’s true, salaries in Portugal are not as high as in the US, Germany, Australia, and other countries. But, on the other side, the costs of living in Portugal are much lower than in the US, which offers people a good quality of life.

In the case of Portugal, citizens are protected in different ways and the social politics of Portugal’s latest governments is amongst the best in Europe. Together with the fact that Portugal is one of the safest countries in the world today, this means a big deciding factor when making a decision about emigration. It can also be said that investors from Brazil, the United Kingdom, France, the USA, and China represent half of the amount invested in Portuguese real estate.

Endorsed by the famous

Portugal is on the up and up, becoming a more famous destination to buy a place in the sun. Celebrities are also getting in on the act, buying up property in Portugal left, right and center, so if you go and live here you’ll be in good company. 

Scarlett Johansson recently bought an apartment in the trendy Príncipe Real neighborhood of Lisbon. Also in Portugal’s capital are actors Michael Fassbender and Monica Bellucci, and designer Christian Louboutin

One of Madonna’s many properties worldwide is the Quinta do Relógio mansion in Sintra, a 7.5-million-euro, seven-bedroom, seven-bathroom estate that was falling into disrepair before Madge scooped it up in 2017.

Also in the popular and sunny Algarve coast of Portugal is the ‘Total Eclipse of the Heart’ singer, Bonnie Tyler, who has enjoyed hanging out in the area since the 1970s and is surely the trendsetter for the rest of the celebs.

While his main residence is in Massachusetts, John Malkovich has been one of Portugal’s main cheerleaders in recent years, investing in businesses like the Lux club and one or two haute-cuisine restaurants.

Going Forward

Portugal’s Government needs to continue to improve the conditions that will allow its population and companies to thrive and to grow. Portugal needs to become more productive, innovative, able to deliver products, goods, and services which are of a quality that merits the preference of overseas clients.

In order to secure this Portugal needs access to capital and this means continuing to be attractive to foreign investment. “We need to make sure that we create more wealth in the country to be reinvested.

The United States can help Portugal by continuing to progress its trade relations and the US offers Portugal the ability to find a market in which Portuguese companies can grow. If the US continues to be the great partner it has been in terms of higher education and scientific development.

The US is a partner that is important and it is important to make sure that it continues to be the anchor of the transatlantic relationship it has been over the past two centuries,” concluded the Minister or the Economy Pedro Siza Vieira.

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Source: Essential Business
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