RUDOLF KNOBLAUCH Switzerland Ambassador to Mexico

Congratulations Mr. Knoblauch for your recent appointment as Ambassador of Switzerland in our Country. What is your plan of action as Ambassador to develop and strengthen the bilateral relationship between Switzerland and Mexico?

I do not yet have a complete view of Swiss-Mexican relations.

But I think it’s obvious that the strengthening of bilateral relations in all fields and especially in the field of trade will be at the top of my list. Besides trade, the fields of cultural and scientific cooperation between my country and Mexico are certainly going to be top priorities, as well.

What role does Mexico play for Swiss investments in North and Central America?

Swiss firms are well established in Canada and the United States and are normally independent of investments made in Mexico. But at the same time they may use the NAFTA agreement in order to facilitate their operations in North America. On the other hand, some Swiss companies use Mexico as an operational platform or springboard to the rest of Latin America, mostly Central America.

How successful has the Free Trade Agreement (FTA) signed between Mexico and the European Free Trade Association (EFTA, Iceland, Lichtenstein, Norway and Switzerland) been in terms of increasing Swiss investments in Mexico?

The FTA has been in force since July 2001 and trade with Switzerland accounts for 90% of the total. The FTA has facilitated the access of Swiss products and services to Mexico and has increased the flow of Mexican merchandise (pharmaceutical and agro-food products to Switzerland). The agreement has also helped Swiss investments in Mexico.

Nevertheless, I feel that the existence of the FTA is not sufficiently known by economic actors in Mexico, as well as in Switzerland. We should, therefore, do more to promote trade exchanges between the two countries under the existing FTA. On the Swiss side we would also be ready to negotiate an extension of the FTA to those sectors that are not yet included.

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

In general terms, Swiss firms are satisfied with their operations in Mexico. There are Swiss firms which have been operating in the country for 75 years! In recent years they have continued strengthening their presence in Mexico. It is well acknowledged that, with proper training, the Mexican work force can be as productive as their European counterpart and at a significantly lower cost.

What is your outlook for Swiss trade and investment in Mexico?

Switzerland is among the 10 most important investors in Mexico. From 1999 up to 2009, Swiss investments added up to US$3.9 billion. In terms of trade, Mexico is Switzerland’s second commercial partner in Latin America, following Brazil. In 2009 the trade balance was CHF789.59 million in favor of Switzerland.

In 2009, total Swiss exports to Mexico valued CHF1.2 billion, mostly made up of pharmaceuticals (drugs, vitamins, bio tech) plus chemical products, machinery and watches. Meanwhile, Swiss imports from Mexico amounted to CHF234.17 million being mainly pharmaceutical and raw chemical products, vehicles, agro-food products and non-electrical machinery. As I said before, I think that there is still a great potential for trade between both countries, above all for Mexican products in Switzerland.

Is there any additional Swiss investment in Mexico to be expected in the near future?

Most investments in recent years were reinvestments. Nevertheless, the pharmaceutical sector inaugurated new facilities in Toluca, in the State of México, in 2007 and I know that the concrete sector will shortly open a new plant in Hermosillo, Sonora.

But I am confident that there could be additional investments with the condition that the business climate in Mexico does not get any worse. Among other things, I think that security - or the lack of it - certainly is a factor to be evaluated when companies decide on future investments.

Are there specific sectors targeted by Swiss companies?

believe that Swiss Clean Techs have a great future in Mexico. Swiss know-how covers, for instance, water, air and waste treatment. We also specialize in alternative energy generation, recycling and urban development. Switzerland offers a broad range of “niche” solutions that could help Mexico mitigate its un-resolved pollution problems.

What conditions are needed in Mexico to increase Swiss investments?

Swiss firms need the same conditions that Mexican companies do in order to expand their activities in Mexico, for instance, legal security, more flexibility from the labor market, as well as access to better services and infrastructure. And as mentioned, there is an on-going need for adequate public security almost everywhere in the country.

What is the future of Switzerland and Mexico in their bilateral relations?

Switzerland will continue its strong cooperation and institutional exchanges with Mexico. We are doing this in order to promote trade and eliminate any possible obstacles. Furthermore, both countries will maintain strong ties and collaborate very closely in multi-lateral forums, among which the fields of human rights, migration and environment are central.

What is your opinion on the Mexican economy?

Mexico has done its homework in the 90’s and now enjoys working in a strong macro-economic environment that helps the country overcome the recent financial crisis. Nevertheless, Mexico might look at what the BRIC nations have done in order to increase investments and reduce unemployment. And finally, to get even more stability, Mexico should diversify the destination of exports to develop new markets using its broad free trade agreement network and this would mean being less oriented towards the U.S.

Any last comment for the Mexico- NOW subscribers?

I am thrilled to be in Mexico and to represent my country – Switzerland – in this exciting, but at the same time challenging country. The possibilities of Mexico to be one of the leaders of the emerging world economies are intact, but must be pursued further. Switzerland is part of the so called “Old World”, but has a booming and very innovative economy. Switzerland and Mexico are competitors in many fields, but the possibilities for cooperation in those fields where our economies are complementary are manifold. This is what I see as the future of our bilateral relations.