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London Business Matters

20 International February 2017 Mexico-UK trade – more important than ever Mexico is the second largest country in Latin America, has a population of over 120 million, and is positioned between the United States and Central and South America. It is the gateway to the Pacific Alliance, a trading bloc of Chile, Columbia, Peru and Mexico – the most advanced and open economies in the region. Alliance Britain has enjoyed a strong bilateral relationship with Mexico for centuries. The UK was the first European great power to recognise Mexico’s sovereignty following its War of Independence in 1810. Just 15 years later 130 Cornish miners sailed to Mexico to work the main Hidalgo mines bringing with them the latest technology and British culture. Today, British technology, expertise and culture is still highly valued in Mexico and the two countries have a strong alliance. The UK currently enjoys free trade with Mexico through the European Union. Recently, Mexico has been in the spotlight for less desirable reasons, with US President Donald Trump (as he now is) publically threatening protectionist trade policy. Consequently there are campaigns in Mexico encouraging consumers to look beyond their neighbours in the north. Furthermore, the UK and Mexican governments have both expressed a desire to establish a cutting edge bilateral trade agreement after the UK leaves the EU. Winners Mexico is very much open for business, with 12 Free Trade Agreements with 46 countries and an aggressive reform agenda that covers sectors including education, telecommunications and energy. The latter includes both renewables and oil and gas. Last year, the Mexican government launched its wholesale electricity market and held three auctions that were dominated by renewable companies. British Chamber member Zuma Energía, funded by UK based Actis, were one of the big winners in the most recent auction. In oil and gas Mexico has held several rounds of bids to develop various oil fields with private companies. Last December, BP won two VUHL: Mexico’s first super car: the car is Mexican, 50 per cent of the components are British blocks as part of consortia bidding for deep water projects in the Gulf of Mexico. The British government is now placing a high priority on trade with Mexico. The country was Lord Price’s first overseas destination as Minister for Trade and Investment to attend a meeting of the Senior Business Leaders Group, established during Mexican President Enrique Peña Nieto’s visit to the UK a year earlier. Mexico represents a vast area of opportunity, as only 0.7 per cent of Mexican exports ($4.3 billion) currently go to the UK. Opportunity Other areas of opportunity and synergy for British businesses in Mexico include: • The growing renewable energy sector in which Mexico has the ambitious target of sourcing 35 per cent of its energy from renewable sources by 2024 • Pharmaceuticals – one of the UK’s largest export industries to the country • Machinery and engines, both in the automotive and aerospace sectors, are growing thanks to government incentives and an affordable and highly-skilled labour force • Construction; Mexico spends about five per cent of GDP on infrastructure with extensive plans in place to invest over £65 billion in motorways, passenger trains, ports and airports. Confident In these times of change and uncertainty, British companies can be confident that the Mexican market will have opportunities open to them. While not always the first export market that comes to mind, the opportunities can be deeply rewarding. The British Chamber of Commerce in Mexico has been helping British companies open dialogue with Mexican firms for over 95 years and welcomes communication with UK firms to discuss how they can help in the market. Laura Atkinson is the manager of BritChaM Business in Mexico info@britishbusiness.mx www.britishbusiness.mx by Laura Atkinson On the runway A new airport in Mexico City designed by Mexican architect Fernando Romero, British architects Foster + Partners and Netherlands Airport Consultants is expected to open in 2020.


London Business Matters
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