TBY talks to Luis de Guindos, Spain’s Minister of Economy & Competitiveness, on economic relations between Spain and Mexico.
THE BUSINESS YEAR Spain is the leading European investor in Mexico, while Mexico is the fourth most important destination for Spanish investment. How does the new Spanish government assess economic relations between the two countries?
LUIS DE GUINDOS Mexico is certainly a strategic economic partner for Spain. On a commercial level, today it is our first export market in Latin America and fifth worldwide, if we exclude Europe. In 2011 about 10,000 Spanish companies exported to Mexico. In terms of investment, Spain has long been established as the second largest investor in Mexico after the US, with investments of more than $40 billion made over the last decade. This investment is also very diversified; it has been distributed in virtually all industries and services across all the states of Mexico. In fact, Mexico is our third most important destination outside the EU, just behind the US and Brazil. This kind of investment creates competition, facilitates technology transfer, and creates jobs across the country. In fact, Spanish companies are perfectly integrated into the economic and trading structure in Mexico, a country that is also a major investor in Spain. Large Mexican companies have invested over €4 billion in our country over the last decade. Our aim is to further strengthen our economic ties and boost investment from Mexican companies; we are an ideal platform for them to enter the European market.
Why is Mexico such an attractive destination for Spanish investment?
Mexico is the 14th largest economy in the world and the second largest in Latin America, and it is very attractive for foreign investment, according to the latest UN Conference on Trade and Development (UNCTAD) figures, which position Mexico as the second best destination for FDI in Latin America, just behind Brazil. The size of the Mexican economy, its population of over 112 million inhabitants, its income per capita, economic stability, and economic openness established through an extensive network of free trade treaties are just some of the factors that explain the extraordinary attractiveness of the country. Along with all these elements, I would like to emphasize that in our particular case, there is a long and extraordinary relationship that unites both countries. Spanish companies see Mexico as a natural commercial destination, where the brand Spain is highly recognized and welcomed. All these factors have encouraged a strong presence of large Spanish companies in Mexico, and are also attracting many SMEs.
How has the free trade agreement between the EU and Mexico stimulated relations between Mexico and Spain over the last decade? What impact will the Joint Executive Plan of the Mexico-EU Strategic Partnership have?
The entry into force of the agreement between the EU and Mexico opened, without a shadow of a doubt, new perspectives in our bilateral relationship. From an economic and trade point of view, the EU-Mexico free trade treaty has significantly improved the access of goods and services to both markets, considerably increasing trade figures in recent years. For example, at the end of 2011 the EU exported $37.5 billion to Mexico, which represented an increase of up to 45% since 2005, whereas Mexican exports to the EU in the same period grew by 108%. Within the EU, Spain is Mexico’s first customer, and in 2011 Mexico purchased goods and services worth $4.9 billion: a figure only behind the US, Canada, and China. We are also the third biggest European provider for Mexico with sales of $3.85 billion in 2011, just behind Germany and Italy. The Joint Executive Plan approved in 2010 will be another step in bilateral relations between Mexico and the EU, incorporating many priority issues on the international agenda such as climate change, human rights, and security issues.
In your opinion, how will Mexico’s presidency of the G20 this year improve its international image?
Mexico holds all the prerequisites and conditions for its presidency of the G20 to be a complete success. Consistency of macroeconomic management and experience in crisis management provides it with extraordinary credibility. I’m sure it will demonstrate its leadership and its capacity to build a tangible and beneficial consensus to the international community.
This interview was published in 'The Business Year: Mexico 2012'. To subscribe please e-mail us at email@example.com
© The Business Year - June 2012