Mexico is a major market for UK exporters. According to British government statistics, Mexico’s rapidly expanding population means that demand for British products is set to grow by 35% by 2035. The two countries are now progressing talks to finalise the details of a Free Trade Agreement (“FTA”).
A former secretary of the Mexican senate’s Committee on Foreign Relations for Europe explained, “Mexico is a key country for the growing health market; its location is an excellent entry point to the region and the US market. Additionally, Mexico has one of the largest economies in Latin America, making it a very attractive destination for UK companies to invest and do business.”
“Mexico is a key country for the growing health market; its location is an excellent entry point to the region and the US market.”
Former secretary, senate’s Committee on FR for Europe, Mexico
Indeed, the UK is Mexico’s 6th trading partner among the countries of the European Union and 18th worldwide. As of the entry into force of the FTA between the European Union and Mexico (“TLCUEM”), trade between Mexico and the United Kingdom increased 142.0%. The main products that Mexico exports to the United Kingdom are: crude forms of gold, emitting devices with a built-in receiving device, and malt beer.
The products that Mexico imports are: whiskey, gasoline (except jet fuel) and chemical elements for use in electronics. The United Kingdom is the 4th investor in Mexico among the countries of the European Union and the 6th worldwide. In 2011, 130 new British companies invested in Mexico.
An adviser to Mexico’s Secretariat of the Economy explained, “… the new trade agreement sought with Mexico is ambitious, it will include agreements and joint objectives on digitisation and the green economy in favour of combating climate change. These are two topics that can form new chapters in the bilateral relationship.”
“… the new trade agreement sought with Mexico is ambitious, it will include agreements and joint objectives on digitisation and the green economy in favour of combating climate change.”
Signs are already promising. Robert Fioroni, Financial director of Mexico’s GKN Automotive has invested in San Luis Potosí and Guanajuato and is now looking to strengthen its footprint in electromobility in addition to Mexico’s industrial heartland in Nuevo León. The company could benefit from British technical expertise. Mexico more broadly wants to develop its aeronautical sector and is looking to British companies such as BAE systems to do so; the presence of British aerospace in Mexico could expand significantly. Indeed, Mexico is looking to increase flight frequency from London to Puerto Vallarta.
Geopolitics is a factor in the negotiations too. The UK is keen to join the Comprehensive and Progressive Treaty of Trans-Pacific Association better known as “TIPAT”, an economic and political coalition of pacific rim countries. The UK’s candidature is already supported by a number of countries including Austria, New Zealand and Malaysia but will benefit greatly from Mexico’s support too. More broadly, it will allow London to develop more deeply its relations with Latin America and will allow the region to more easily court British investment in the mining sector and export greater volumes of agri-products.
A win-win at first glance, the devil as always, is in the detail.