U.S. Embassy: ‘Proud of a Strong and Growing Economic Relationship’
U.S. Chargé d’Affaires Marc Dillard discusses the state of the American-Hungarian bilateral relationship, growing business sectors, the end of “reflexive offshoring” and what the embassy does to help trade links.
BBJ: How strong is the bilateral trade relationship between the U.S. and Hungary? What are the numbers?
Marc Dillard: We’re proud that our economic relationship is both strong and growing. As the country with the largest economy in the world, the United States has a market full of opportunities, as it boasts one of the best business environments in the world. Hungary possesses a strategic location in Europe, access to EU markets, a highly skilled and educated workforce, and a sound infrastructure, which have attracted companies such as GE, Arconic, BlackRock, UPS, Coca-Cola, National Instruments, Microsoft, and IBM. There are also opportunities in the large number of connections between our two countries in the high-tech and startup fields. Our two-way trade is now valued at USD 7.23 billion, with the United States exporting around USD 1.92 bln to Hungary and Hungary exporting about USD 5.31 bln to the States. Moreover, we are the second largest investor in Hungary, after Germany. That means U.S. firms in Hungary employ more than 105,000 Hungarians.
BBJ: What are the most significant sectors, both for U.S. imports from Hungary, and U.S. exports to Hungary?
MD: Of course, all the different sectors that make up the trade relationship with Hungary are important to the Embassy, because they contribute to the livelihood of businesses and individuals in both countries. Some of the larger sectors include transportation, chemicals, and technology. In addition, these sectors also account for some of the most significant growth. If we look more closely at the U.S. exports to Hungary, we see that, for example, computers rose 30%, by USD 94.5 million to USD 410.3 mln. We see that aircraft engines and engine parts rose 17.44%, to USD 190.5 mln. These are significant numbers.
BBJ: Has this been fairly static, or has it changed over the years? Are there any upcoming new sectors?
MD: The overall trend has been for increased trade over the years, with some variation in the proportion of the sectors. The numbers above illustrate the fast growth that certain sectors have enjoyed. On new sectors, from both an economic and security perspective, we think there is potential for further growth for U.S. firms in the energy sector. It is vital for countries to have diverse sources of energy, and we think it is particularly important that our NATO allies bolster their energy security. Already, U.S. companies are some of Hungary’s largest domestic oil and gas producers. We also believe that U.S. firms can provide important options for Hungary. For example, renewables, liquified natural gas (LNG), small modular reactors, and unconventional drilling could all help boost Hungary’s energy security and drive down energy costs for consumers.
BBJ: How has COVID-19 impacted the figures? When do you expect trade will pick up and get back on track?
MD: There is a lot of uncertainty today, and the embassy is certainly focused on doing what it can to help in these difficult times for us all. COVID-19 has affected nearly every country and every sector, and U.S.-Hungary trade is no different. I have no specific prediction on timing, but I am an optimist. U.S. companies are the world’s most innovative, and we see that financial relief bills passed by Congress and signed into law by President [Donald] Trump are helping both U.S. consumers and businesses. I believe that the creativity and resilience of the U.S. private sector – and partners around the world – will adapt to new realities. Already individuals and businesses are using technology in new ways to work and reach their goals, and we expect to see the same kind of resilience play out in the U.S.-Hungary economic relationship.
BBJ: Do you foresee any long-term changes in bilateral trade as a result of the pandemic?
MD: The pandemic has in the short term changed many things, such as impacting travel between the countries. However, over the long-term, our trade relationship will continue to be an important part of our bilateral relationship. But one thing the pandemic has shown is how fragile our supply chains can be, especially for crucial medical supplies. As the United States Trade Representative Robert Lighthizer said in an New York Times op-ed on May 11, this reevaluation of trade means the era of “reflexive offshoring” is over. This is why transparency, a favorable business environment, highly qualified labor and stability are important considerations before an investment decision is made.
BBJ: Are there any outstanding trade issues between the two countries? What is the latest position with U.S. travel visas for business people from Hungary?
MD: While we don’t have any trade issues with Hungary, we have shared one area of concern more broadly, which is the building of the 5G network. Chinese practices as regards key infrastructure investments also raise national security issues. The Chinese government can order Chinese companies to share data with them, and if these networks are used for national security-related purposes, classified information of various countries can easily become accessible to the Chinese government. That’s why we have raised this concern with the Hungarian government. It is important for us that Hungary, a NATO ally, preserves its sovereignty.
Regarding visas for business travel, while there are currently travel restrictions in place for residents within the Schengen zone, we see improvements in the area. We will resume routine visa services as soon as possible, but are unable to provide a specific date at this time. We understand this is a challenging situation for the international business community; again, we hope the current visa suspension is resolved in the near term.
BBJ: What do you offer Hungarian business folk thinking of expanding into the U.S. market, or U.S. businesses looking to move into Hungary?
MD: U.S. Embassy Budapest is fortunate to have a U.S. Commercial Service Office, whose responsibilities include both of these areas. The U.S. Commercial Service is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Its more than 200 foreign commercial officers lead a worldwide network of trade and investment professionals, focused on supporting American jobs by helping U.S. companies create new market opportunities. They work with foreign companies to invest in the United States and hire American workers.
U.S. Embassy Budapest offers services to Hungarian companies, and brings U.S. companies to Hungary as well. For example, last year Ambassador [David] Cornstein led a delegation of 17 Hungarian business people to the SelectUSA summit. At this summit, Continest, a Hungarian company, even won an award. Another example is that late last year we brought seven U.S. companies interested in franchising to Hungary; we hope to have results from that tour later this year. Please contact the Commercial Service Office for any inquiries at Office.Budapest@trade.gov.
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