European countries bet on Mexico

MEXICO - The Netherlands, Belgium and Germany are reinforcing their interest in Mexico, reflected in a growth of foreign direct investment (FDI) in the country.

Among these, the Netherlands leads the increase with an investment of US$1.9 billion through the third quarter of 2024, which represents a 238% growth compared to the same period of 2023, according to data from the Ministry of Economy.

Belgium also increased its participation, reporting an investment of US$1.5 billion, an increase of 101%. For its part, Germany registered an FDI of US$3.8 billion, marking an increase of 34.2%.

The National Council of the Maquiladora and Manufacturing Export Industry (Index) notes that Europe is also focusing its sights on Mexico in terms of how to set up companies and how they can join the value chains, becoming suppliers to be incorporated into production lines and then export to the United States.

But Index points out that it is not a matter of triangulation, as is thought of Chinese companies, because there has to be a change in tariffs and a transformation in the product.

The data indicate that in all cases they are concentrated in the manufacturing sector, in the case of the Netherlands and Germany they are directed to the automotive sector.

From January to September 2024, the Netherlands registers an FDI of US$1.4 billion for the manufacture of transportation equipment, being the most representative; in second place, with a more conservative value, is the beverage industry, with US$204 million.

Germany focuses its investment in the manufacture of cars and trucks, with US$1.4 billion, and in auto parts, with US$1 billion.

Belgium's record, for said period, only shows that it is for manufacturing industries; however, in the information of the commercial relationship of the Ministry of Foreign Affairs, an investment in beverages and tobacco is identified.

Regarding the type of investment, from January to September 2024, intercompany accounts, which are transactions originated by debts between companies established in Mexico and other related companies residing abroad, represent 71% of the total; reinvestments, with 28.3%; and new investments, with only 0.3%.