As ambassador what is your plan of action this year to be developed in terms of strengthening the bilateral relationship between Chile and Mexico?
Relationships between Mexico and Chile are strong in all areas. Both Countries consider each other as strategic partners. Relationship-building is an intense activity, but pleasant at the same time, because both Mexicans and Chileans have mutual sympathy and admiration that enrich the relationship.
Both Countries are contributing to an increasing and impressive bilateral commerce that in 2011 ascended to US$4.4 billion. This was, in fact, an increase of 12% compared to 2010. One of my duties is just that, helping to create new opportunities. We have also deployed efforts as Embassy to move investors from one country to another, and we are giving a renewed impulse to the Chilean – Mexican Chamber of Commerce and dynamic new investment.
In the commercial and investment fields, there is still a generous stretch to go between Mexico and Chile. Countries like these maintain open markets and don’t use protectionist policies.
There is still more. This year Chile has been invited as “guest of honor” to the International Book Show in Guadalajara. This is an action that has reinforced an intensification of our cultural relationship. Also, Mexico invited Chile to participate in the G20 Summit. This is in itself deserving of support, besides being a kind of important recognition for a country that has been meeting its responsibilities quite well.
All this implies there will be very active assistance in all preparatory meetings at the Ministries level, and for the Under Secretaries, as well as for all the experts and Sherpa’s. This is certainly an exciting year of additional impulse in the relations between both countries.
AT THIS TIME HOW IS THE DIPLOMATIC RELATIONSHIP BETWEEN CHILE AND MEXICO DESCRIBED?
Diplomatic relations between the two Countries are splendid because Mexico and Chile share visions in terms of politics and international trade. And they agree on how to overcome conflicts and international tensions. They feel the same way in respect to human rights and strengthening institutions in the global community.
Both Countries collaborate in regard to international political affairs. They do this by consulting each other on issues requiring major involvement. Historically, the relationship between the two Countries has been excellent and this is a capital Plus for both countries to take pride in as they re-evaluate and expand a winwin relationship through on-going contact.
HOW HAS THE COMMERCE BETWEEN MEXICO AND CHILE EVOLVED IN THE PAST 5 YEARS?
The economic behavior of Chile and Mexico stands on a solid footing that has given it favorable development promoted in terms of international commerce. In a macro-economic manner, the Chilean economy grew 6.3% last year and the political and institutional stability position Chile as a very attractive country for business and investment.
The commercial relationship between Chile and Mexico is governed by the Free Trade Agreement that went into effect in 1999. This came as part of an expansion of the Economic Complementation Agreement (ACE) signed in 1992. Today 99.7% of the products traded and commercialized between the two countries are duty free.
Last year (2011), Mexico occupied the 7th place as receptor of Chilean products and this speaks to the complementarity of our economies and the importance of being strategic partners. The trade balance reached US$4.3 billion which represents a 12% raise with respect to 2010. Mexico for the second consecutive year had a surplus on the commercial trade side. The Chilean exports (FOB) to Mexico have increased as well.
In the year 2009 exports to Mexico reported US$1.47 billion being two years later in 2011 US$1.95 billion representing an increase of the 33%. However, the value of the imports to Chile has been higher. In 2007, Chilean imports (CIF) from Mexico recorded US$1.34 billion and for 2011 it was US$2.42 billion, which is a variation of the 80%. In this way I can point to the role that is played by our Commercial and Agro Aggregators who are from Chile in are working and living in Mexico who permanently promote and develop great business and all kinds of commerce between the two countries.
WHAT IS THE ROLE PLAYED BY MEXICO IN REGARD TO CHILEAN INVESTMENT IN NORTH AMERICA?
Mexico is one of the largest markets of the Region and a Country that imports and will keep importing an increasingly important amount of alimentary products. This is very attractive for Chile, being a food export leader. The total Chilean alimentary and forestry exports passed the US$18 billion in 2011 and this figure is expected to reach the US$20 billion yearly mark by 2015. By investing in Mexico, Chilean companies not only think in terms of the national market which is over 110 million inhabitants, but also what to do to reach the United States.
In addition to the U.S. we reach the Mexican market thanks to our free trade agreements. At this time we have signed 21 commercial agreements with 58 countries. This certainly must qualify us as being one of the most open economies in the world. Thanks to all this, our products reach many countries without barriers, as well as products entering Chile from the exterior.
HOW HAS THE CHILEAN INVESTMENT IN MEXICO EVOLVED?
We have favorable figures for recent years. Many Chilean companies have presence in our immediate neighboring countries, and we are now sure that the Chilean companies are increasing their interest in the Mexican market. We know that Chilean companies have achieved excellent results here and they keep on expanding.
Many of them have really grown in Mexico even more than in Chile… in a very short period of time. The Chilean products are everywhere seen in Mexico as a symbol of quality and trust.
WHAT IS YOUR OUTLOOK FOR CHILEAN TRADE AND INVESTMENT THIS YEAR (2012) IN MEXICO?
I feel optimist. Even though we are experiencing a global crisis, everything indicates that both commerce and the industry will keep on growing. Chile maintains its policy of an open market and clearly observes with open eyes the deep respect that Mexico gives to this principle. Mexico not only respects this principle, but the country is also an international advocate working to build respect for this practice, especially, for instance, as it has been seen in the G20.
Free commerce has been a key for my Country in all of our macroeconomic achievements, which comes with a GDP growth of 5% for the year 2012 and an income per capital of over US$15,800.
WILL ELECTIONS FOR THE PRESIDENT IN MEXICO AFFECT THE COMMERCIAL RELATIONSHIP BETWEEN THE TWO COUNTRIES?
We constantly communicate with the different political and economic factors in Mexico and our impression is that whatever the result might be in the elections this year, Mexico won’t experience variations in the commerce area. I estimate that Mexico will continue growing, because the country is already a giant exporter and there are demands in the markets that come with no restrictions and the economy just keeps on growing. The process involves utilization of updated technologies, creating jobs for new employees and ultimately reaching prosperity. In this way we are on the same boat as your great nation is.
IS THERE ANY ADDITIONAL CHILEAN INVESTMENT IN MEXICO TO BE EXPECTED IN THE NEAR FUTURE?
The Mexican mining sector offers an investment platform open for entrepreneurs from Chile. Seventy percent (70%) of the territory remains unexplored and there are opportunities to offer things like: services, machinery, technology and inputs for projects of exploration and exploitation. The Chilean investment in Mexico in the mining industry adds to US$51 million and Chile features the necessary elements to participate in the exploration of new mining areas it is well-established that 41% of the exports from Chile are related to mining.
At the same time, we still expect an increase of Chilean investment in the Mexican agro machinery market as well as all of the services referred to by IT.
ARE THERE SPECIFIC SECTORS TARGETED BY CHILEAN COMPANIES?
The alimentary sector is really relevant because it features the main commercialized products in Mexico. Among them are garlic, peaches, grapes and plums. Also, there is salmon from the Pacific, and chicken and turkey are among the great variety of food products that fall within the scope of Mexico. Another element is the excellent quality of our wines.
In the mining sector the selling cooper, aluminum, iron and steel pipes is really highlighted. At the same time the forestry sector keeps positioning itself with raw pine and wood from conifers as well as producing boards and other derivative materials.
WHAT IS YOUR OPINION OF THE MEXICAN ECONOMY?
The influence of international economic volatility has been complex for many countries. The commercial concentration in Mexico with respect to the giant U.S. market is a two-faced coin.
For example, it is favorable when the global economy moves and sensitive when it falls. I believe that Mexico, without abandoning their strong presence in the U.S. should look more to diversification of their exports and the southern zone offers over the long term a very attractive opportunity. The national reserves of Mexico have increased. This happened at the same time the stable credit environments had been forecasted. It was pegged to the consumer price index. This stood inside the goal range set by the Central Bank and guided an inflation fluctuating between 3-4% since 2011.
All of the statistical factors, as well as the efforts of the Government and the international organizations looked toward supporting and maintaining economic stability. This allows for a lot of development in different countries. These macro-economic figures are generally stable and allow for minimizing the effects of the crisis by promoting the economic and social development of each country.
ANY LAST COMMENT FOR THE MEXICONOW SUBSCRIBERS?
Chile has challenges in terms of growing their relationships in all fields, cultural, economic or social. I want to invite all the MexicoNOW subscribers to be part of the future that we are building together. At the same time, I want to invite everyone to take the opportunity of the great potential that exist between the two countries and together we will be able to exploit the great advantages of the agreements signed in terms of cooperation between Chile and Mexico and everything pointing to the positive trend that exists between business and investment. Chile and Mexico are at the beginning of a great relationship and we will be sure to continue a long way together.