Judith Macgregor – United Kingdom Ambassador to Mexico

United Kingdom Ambassador to Mexico

WHAT IS THE CURRENT SITUATION OF THE DIPLOMATIC RELATIONSHIP BETWEEN THE UK AND MEXICO?

The diplomatic relationship between Mexico and the UK is excellent. We have a very close political relationship and a very close political dialogue on foreign policies issues. Mr. Peña Nieto, your new President, visited the UK in October and had conversations with David Cameroon, our Prime Minister and Mr. Nicolas Craig who is our Deputy Prime Minister. He also met with a range of top British businessmen based in London and those meetings pretty much reaffi rmed how similar we are on foreign policy issues.

Our two countries have worked extremely closely during the G20 Mexico´s Presidency which fi nished before Christmas. And we have also been working with a special focus on balance and employment for the world.

We have set our positions on the importance of open markets, the fl ow of free trade and we encourage not putting measures and barriers that stop the free fl ow worldwide. We have worked together very closely on international issues such as the United Nations and I would say that generally speaking, we don’t have any bilateral problems in our relationship…only bilateral opportunities.

WHICH AREAS OF OPPORTUNITY DO YOU SEE IN TERMS OF STRENGTHENING RELATIONS BETWEEN THE UK AND MEXICO?

When I speak to this I see a very big opportunity in the peopleto- people exchange where we can talk about custom services. But I was just reading about the opportunity that brings tourism to Mexico. Mexico is where we have 350,000 people coming to visit and over the long haul we have seen a lot of common effort between the two countries. Take, for example, that just from London to Cancun we have six scheduled fl ights a week and there are other non-scheduled fl ights.

Recently Aeromexico opened their line to London with three scheduled fl ights a week and British Airways continues operating three to fi ve fl ights to London. So this is an exciting opportunity for the people-to-people contact where we can capitalize on trade and exchange and investment and I see this trend increasing. And I’m referring to just one area of opportunity and expansion, because all of our fl ights are always busy.

We were also very active last year promoting the 2012 Olympic Games in London. This was an exciting destination for worldwide tourism and I think we have been very enthusiastic about Mexicans traveling to the UK–or thinking about traveling to the UK–which is a great destination for Tourism just like Mexico.

And let’s not forget about education and business. We have seen an increase in the number of Mexican students traveling to the UK, particularly in the post graduate sector. In fact, last February we had three education presentations in Mexico City, Toluca and Monterrey in order to promote educational opportunities in British Universities. There is still a wide potential to be explored and developed.

And then on the trade side, I think that we welcome the fact that we have increased trade in the past three years. We have talked about doubling our trade from 2009 over 2015 and I am confi dent that we will do that again and we welcome the increase in British exports to Mexico. Overall things are looking very good, but again I would want to emphasize that not only is there still a huge opportunity for more companies from the UK to come to Mexico, but also for Mexican entrepreneurs to come and settle in the United Kingdom.

We have had steady cases of success with Mexican companies investing in the UK. Grumma, for instance, is expanding investment in the UK. CEMEX is also well established in Britain and we have other companies like Mexichem and some restaurants from Mexico that have invested in the UK. But, there are also steady and increasing opportunities in the fi nancial services sector where we are very pleased with the increase of the presence of Monex in the UK. And many companies fi nd that the UK is a very business friendly environment in which things are fl exible, fast, and it is easy to establish, operate and set up a business in Europe.

It’s a place with many international connections which are really superb in London and we have heard news about innovative concepts like the London Tech City. This is a new series of digital companies specializing in electronic and innovative hi-tech. They will be based near the Olympic Park in London which is a sophisticated restored area. So with all this going on we are confi dent that we are now attracting Mexican investment to the UK. And we are certain there will be a lot more in the upcoming period.

At this time we would like to take the opportunity to strengthen our common infrastructure especially in Mexico. In the UK we are always open to invest more in our trains and railways and generally in those areas that other countries also need, especially where they are just emerging and where there are other areas of opportunity such as retail and services.

Back in Mexico our companies are expanding and one of those sectors is retail. This is where British fashion in particular has really signifi cally expanded and where we have companies like Burberry and Pink. They have boutiques, for example, in Palacio de Hierro and other parts of the Country where accessories have also entered the Mexican market. In general terms I can say there are more British goods, especially for young people, and also items from the luxury sector that have entered the Mexican market.

Also, there is a lot of British whiskey and beer being consumed in Mexico. So the fashion, food, music, and services all have a huge presence in the Mexican marketplace. But it isn’t just the consumer goods, but also alternative and aeronautical industries. This is where British suppliers are coming into Mexico in increasing numbers to work with your investment clusters and there are also other potential areas waiting to be developed. So it is all very encouraging and we will most certainly be looking to your Embassy for important trade missions in the near future.

HOW HAS COMMERCE BETWEEN THE UK AND MEXICO EVOLVED IN THE PAST FIVE YEARS?

We can say that in most of our sectors we are presently expanding. Energy is one example. In the past year and half, PEMEX has extended a number of contracts for exploration and production of oil and gas fi elds. And there is a British company that has been very successful in winning a large number of those contracts.

I also think there is a big area of opportunity in IT. Your company Softech is already established in the United Kingdom and a number of British companies are very active here in Mexico.

Clearly we look ahead to potential changes and structural reforms in Mexico. The legislative plan that your new Government has set out in the communication, energy and education areas is very promising. We see all these areas as the ones where we can best cooperate, especially with more of a market for our goods and we see many more opportunities that we can’t wait to actualize.

But, we are not waiting for change to happen. We are already active and in the banking system as you can see right now, there is a big new investment from HSBC. The bank is offering Mexico one of its worldwide headquarters and the investment is being increased by a half billion U.S. dollars. This is a measure of the trust that HSBC has in the market here.

But many other companies in other sectors like the Pharmaceuticals are expanding their footprint in Mexico in order to serve the domestic market. However, they are also looking for opportunities throughout Latin America and in the U.S. since it is such a large market. So, as I talk about the diversifi cation, expansion and general intensifi cation of our trade, there is still room for more. And another thing, we are very active in this respect with a number of trade missions coming up during the fi rst half of 2013. And we can already see that these areas of British expertise and services can be very effective.

At the same time we are beginning to be more active in promoting the English language because it is clear that this language is important for international trade. So in order to deepen and broaden this effort we are aggressively starting to teach the teachers, professionals and workers to have better English.

WHAT IS THE ROLE THAT MEXICO PLAYS FOR BRITISH INVESTMENT FOR NORTH AND SOUTH AMERICA?

Mexico is now, I think, increasingly seen as a greater market. But lately it has been considered as an even bigger and more effi cient manufacturer, producer and player in the export supply chain for North America, Canada and the United States. Not only there but also to Latin America.

Our suppliers are working in the construction and production of their own machinery, as well as electronic products to serve the North and South American Market as well as in Asia. The work is progressing on the Trans Pacifi c Partnership and there is also great dynamism in the Asian Pacifi c Alliance to create markets and increase access between them. This is because of our Free Trade Agreement with Mexico; and the European Free Trade Agreement with Mexico which is now 11 years old. Basically we have good opportunities to take advantage of Mexico as a “through port” for reaching many other global markets.

WHAT IS THE LEVEL OF SATISFACTION AMONG BRITISH COMPANIES WITH THEIR OPERATIONS IN MEXICO?

British Companies are pretty much satisfi ed. The companies that have been operating here have found issues that are involved with the Mexican Government. Sometimes it’s pure bureaucracy; sometimes it can be complex regulations that are affecting everything, For example, the importation of food products into Mexico. And sometimes it might have complex, diffi cult procedures. I think the British in Mexico are very pleased in general terms with the access and availability of their products in the market and the good will of their Mexican partners.

I think people are obviously looking to change structurally. The new labor reform which was approved last year will actually benefi t British companies, as well as their Mexican counterparts who will now not only be able to recruit in a fl exible manner, but also handle aspects of recruitment in a more positive way.

I think British companies look for further reforms, but in general terms I anticipate optimism regarding infrastructure changes. Clearly there are areas of opportunity for improvements in Mexico’s excellent system of ports. And there is also the need to further develop important rail links and improve the roads and highways that are clearly so important for British Companies wanting to promote their goods throughout Mexico.

IS THERE ANY ADDITIONAL BRITISH INVESTMENT IN MEXICO TO BE EXPECTED IN THE NEAR FUTURE?

That is something that we have commented on in general. I mentioned HSBC as one of these and I am fully aware that companies are investing right now in addition to the upcoming months. In fact, you will fi nd most British Companies, which number about 200–and most of them, are expanding their operations.

GKN in Celaya is a good example. They opened a new plant there last summer and they will continue to increase their investment. Morgan Crucible, a company that has presence in Hidalgo and in the State of Mexico has also expanded its activity.

Other companies in the north of Mexico are working on engineering projects. JJ Churchill for instance, has announced that in the summer that they will be opening a new plant in Sonora. I’m thinking in general terms, as I said, but I am aware of many new projects. ERM is a Company with many years in Mexico. They have now opened a new offi ce for increased expansion in Mexico. Currie and Brown, is another fi rm which has worked for many years on projects in Mexico and they just opened a new offi ce last year to further expand activities.

So I think I can give you a general number of companies, but there will probably be a considerable increase of British investment in the period just ahead. The companies are active in the market and ProMexico has given every consideration to the UK. So we are quite confi dent that there will be an increase in the near future.

WOULD YOU LIKE TO ADD A LAST COMMENT FOR THE MEXICONOW SUBSCRIBERS?

I think the main thing that I want say is that I would encourage Mexican businesses to look very closely at the opportunities in the UK. This is because there is an environment in Europe where we have more opportunities for partnership than there were in the past. I would encourage people to continue visiting the UK. I think London and many other cities offer huge opportunities for Mexican businesspersons and with careful planning they can do both high and low cost alternatives when they come to visit.

It is worthwhile for Mexican students to look at the many Universities offering very competitive deals. Remember, UK universities are featured among the world’s best institutions of higher learning and graduation from the UK will always give tremendous opportunities.

And fi nally, I would like to give a little promotion to a competition to attract brilliant Mexican entrepreneurs. They are invited to participate in a competition and become candidates for a visit to the UK. The idea is for them to come and visit and learn more about Tech City. This is the project mentioned earlier. It is an initiative for companies working in this fantastic new digital IT tech software area. So we are inviting a number of young people to take part in the competition. The challenge is for people who are working in innovative areas and this is a great platform for getting started.