Duncan Taylor, United Kingdom Ambassador to Mexico

Editor’s Interview

Please tell us how close is the relationship between Mexico and the UK?

AMBASSADOR TAYLOR. - The relationship between our countries is fantastic. The Dual Year of the UK and Mexico last year generated enormous goodwill and gave excellent impetus to relations between Mexico and the UK. From the very highest levels (TRHs Prince Charles’s and Duchess of Cornwall’s visit in November 2014, President Peña Nieto’s State Visit to the UK in March 2015 and a number of flagship events throughout the year) to a multitude of grassroots activities which engaged the general public in both countries. 

I believe the year was a great success. Over twelve months, the two countries strengthened existing ties and collaboration in arts, education, science, innovation, trade and investment. Together with the Mexican government, we established the foundations for a lasting, positive legacy that will last way beyond 2015.

What is the current situation of the diplomatic relationship between UK and Mexico?

Excellent. We have a clear programme to build on the success of the Dual Year with a wide variety of programmes and visits.

We are waiting to deliver a significant boost to our Trade and Investment relations. Our attention will focus on the key sectors and strengths of both countries: bringing innovative oil and gas companies to Mexico to help ensure the success of the energy reform as well as new British luxury and fashion brands, as with the arrival of Hamleys in 2015; UK companies also have all the skills and experience to make a positive contribution to the construction of the new airport in Mexico City, the most important infrastructure project in the Americas; and we are awaiting the arrival of the first Alexander Dennis double-decker buses, which will circulate on a new metrobus route along the Paseo de la Reforma; we also will encourage high-value investments in the UK from Mexican companies.

The Newton Fund will continue to promote collaborations to scientific research in Mexico through capacity building programs in technology transfer, communication, and science teaching, as well as promoting the use of innovation and research for solving problems in sectors such as health, climate change and agriculture.

Meanwhile, in basic and higher education we will work to strengthen relations between institutions in both countries, through interdisciplinary educational research projects and case studies in areas such as the evaluation of education, citizenship and social leadership. 

What is the current situation of the commercial relationship between UK and Mexico?

Mexico is the world’s 15th largest economy, according to the International Monetary Fund (IMF) and is predicted to return to the top ten economies in the world by 2050. In 2015 goods traded between the UK and Mexico was worth USD 4.3 billion. Many large UK companies operate in Mexico, including HSBC, GlaxoSmithKline, AstraZeneca, Unilever, BAT and the Intercontinental Hotel Group, to name just a few. Incentives for UK companies exporting to Mexico include the size of the market a population of over 120 million, a free trade and a double taxation agreement with the EU and the great goodwill, which exists towards the UK.

How do you grade the competitiveness of Mexico for Foreign Investment?

Mexico has the second largest economy in Latin America, after Brazil; and has a higher GDP per capita than any of the BRICS (Brazil, Russia, India, China and South Africa). But is also an open economy; and was ranked 38th on the ease of doing business ranking for higher than any other country in Latin America as the World Bank Group published. 

Which are the areas of opportunity that you see in terms to strengthen relations between UK and Mexico?

As for the main areas of opportunity in Mexico, there is quite a range. I would say the area where we have interest is engineering and mainly in manufacturing. I will mention the energy sector where there is an energy reform, so Mexico has steepened up in Energy and the country has opened up the market for foreign investors. That process has already been implemented and this is particularity an exciting opportunity for the UK, because we have one of the leading energy sectors in the world, with global leader highly developed companies that can do what is needed in Mexico and as a result, we have an important business sector in the North Sea, with some of the best operations of the world for this sector. I think exploration is a very exciting area for the next few decades. 

Besides energy, there is another area where the UK also is strong, which is renewable energies with hydropower, solar power and other areas of expertise where we have taken along with Mexico a demanding climate change role.

I want to mention three other areas and one is infrastructure, where we have quite an expertise, specifically in terms of consultancy and financing, as well as design and engineering. To give you an example, for the new airport to be built at Mexico City, which is one of the largest infrastructure projects of Latin America, a British company is involved in the development of the master plan with designs from British architects. We have some expertise to support this project. 

Financial Services is another area where the United Kingdom is competitive with banking and insurance services, but mostly we have financial instruments to help to find subsidies and emission bonds for the renewable energies, to get what we call clean bonds, where London is world leader in financing several of this development projects. 

Finally I will mention luxury retail, which is large in Mexico. We have seen a number of British brands coming to Mexico in the past few years. For example we had the arrival of Hamleys to Mexico, which is its first store in Latin America.

What is your plan of action at the Embassy in terms to strengthen the bilateral relationship between UK and Mexico?

We have been extremely good, last year we celebrated the year of UK in Mexico for the whole year and that was a very well organized program across the country. We were promoting the art and the culture, but we were also actively covering education, innovation and business. Our plan is to have more culture, more friends but mostly to have more business together in the coming years. 

We are both members of the G20 and we work with a like-minded relationship in most international issues. The UN is another international institution where we work closely. Among the issues that we share have to be with the financial system to reduce opportunities in corruption. Another example is that we have developed an extremely close relationship working with climate change.

What is the current situation for bilateral investment between UK and Mexico?

Mexico has a very large import market. As we see the statistics, Mexico imports more than Brazil and imports more than Spain. We have a good trade relationship with Mexico, but we have a very modest market share. As the UK focuses more on China, Asia and the Middle East, I think we have to put more attention in Latin America and mostly in Mexico. 

We recognize that it was a mistake and we want to promote initiatives to improve our relationship with Latin America, including Mexico, to double our exports and to double our bilateral trade during, at least the next five years. 

The question shouldn’t be about how to increase trade, but to increase the level of interest of small, medium and large British companies. We are working very hard and constantly with British companies to make them understand that Mexico is an important market with a very open economy with free trade agreements signed with many countries, including the European Union and more recently with the signing of the TTP. It is a very open economy and most of the countries see this positive situation of Mexico. 

In term of doing business, Mexico ranks 38 in the World Economic Forum, which is by far one of the best from the Latin America Countries. This is a good reason to come and do business in Mexico, so companies that are trying to pursue and control the global market, are impressed by how Mexico has worked with the United Kingdom and look at all the opportunities. It is a diversified economy and represents a lot of opportunities. 

We have a new trade Minister who already requested a visit for four days in Mexico and for me this sets up the role to open the market to Mexico to the British Companies that are looking to come to Mexico and also it helps to generate and stimulate that interest to recognize that this is a good place to do business. 

What is the role that Mexico plays for investment from the UK for the NAFTA Market?

The fact that Mexico is part of NAFTA increases in a significant way the interest from manufacturing companies to establish operations in here, where the cost of labor is highly competitive, so there are opportunities to establish low cost manufacturing opportunities, connected to the US and that is certainly an attraction. But Mexico has an important market itself to begin with. So the question shouldn’t be answered only because of the fact that Mexico has an open market, bus also an internal market with high value. British companies are considering visiting Mexico because of the fact of having an enormous market in NAFTA. 

What is the level of satisfaction of British companies with their operations in Mexico?

I think that in general is very good. Mexico is such an open economy, with extremely good will to the UK. Companies are very well received and respected and that comes at the top. What I hear from British companies is that they are very pleased with their operations in Mexico. 

Any last comment for the MexicoNOW subscribers?

I only would like to say that the perception of Mexico sometimes could be dominated by issues related by organized crime, which is a challenge for Latin Countries, but I think we can take Mexico to another context. In business there is not a particular issue and British companies are very positively surprised with too much value about the impression that they got here and the opportunities that this country has.