How do you grade Mexico’s competitiveness for Foreign Investment?
According to the World Competitiveness Report Mexico ranks 53rd out of 144 countries. Mexico has an attractive business environment, one of the world’s largest free trade agreement networks, as well as highly developed sectors that produce at very competitive costs. The country is developing its infrastructure to turn into a world class logistics platform and is working on deregulation to simplify business operations.
The significant investment Mexico has received in recent years demonstrates that it has been and continues to be very attractive for business opportunities.
As Ambassador, what is your plan of action for developing and strengthening the bilateral relationship between Switzerland and Mexico?
We are working along two complementary tracks. On the one side we have to detect, analyze and develop possible future areas of bilateral cooperation and deepen the current ones. On the other side, we have received specific instructions from our government, particularly in regard to the so called “global themes”. They includes climate change, human rights, arms control and all kinds of issues dealt with in multilateral forums, such as the UN or maybe even state party conferences. Let me tell you that we have excellent and close relations with our Mexican colleagues regarding these “global issues”. We also want you to know that in many areas Mexico is our closest partner in Latin America.
Here “in the field” we have been working on a set of issues over the last two years. However, given our limited human resources, we have set our priorities in two main areas: Trade and human rights. Regarding the first topic, we consider that the room for maneuver given by the free trade agreement between Mexico and the EFTA countries– among them Switzerland–has so far not been fully exploited.
Although there exist a variety of opportunities for small and medium Swiss companies to engage in the Mexican market and to enter into a productive business relationship with Mexican companies, these have not yet been exploited. Since there is no Swiss-Mexican Chamber of Commerce, which would, for example, provide legal services or it could develop market surveys for Swiss companies. Despite this the Swiss government decided to open a Swiss Trade Office in May 2012. The first results have been very encouraging and the Trade Office will become a Swiss Business Hub in March 2014.
The Hub will be the official representation of Swiss Global Enterprise, the Swiss equivalent of ProMexico. We are convinced that more Swiss SME will be in a position to come to Mexico in the future. Meanwhile, we have also been working on the political level. Our Minister of the Economy, Federal Counselor Johann Schneider-Ammann, paid an official visit to Mexico in February 2013. And his Mexican counterpart, Secretary of Economy Ildefonso Guajardo, travelled to Bern in May this year.
In the field of human rights, we help fund local NGOs, for instance, with the goal of implementing specific projects. These might include a house for abandoned young carriers of HIV/SIDA. They might sponsor a forensic analysis of mortal remains found along the U.S. border. Or, they might develop a training program for workers and volunteers who are active in migrant housing. There are projects like the Human Rights Film Festival in the Federal District, or maybe even financing seminars and meetings of Human Rights specialists. These are just a few to mention some typical examples. This kind of effort really contributes to the advocacy of human rights and at the same time we very much hope that it works to alleviate the suffering of many victims.
For the future, we hope to further develop two very promising areas of cooperation: Culture on the one hand and “training and education” on the other.
Think about it. Mexico offers an attractive stage for Swiss artists in the visual arts, theatre, music and dance. There already exist, of course, many different forms of cultural exchange. Swiss troupes, for example, perform in different venues in Mexico. It was Switzerland in 2012, along with Austria and Poland, who were the foreign country Guests of Honor at the Festival Internacional Cervantino.
Swiss musicians are regularly invited to Morelia’s renowned Music Festival. . But we strive for a more frequent and “institutionalized” cooperation and for this, we are engaging in a dialogue with the sponsors of different Mexican festivals and cultural institutions. At the same time we are talking to Swiss cultural actors in order to facilitate this important exchange of information. We hope to build a sort of “marketplace” where festivals, artists, institutions and sponsors can “meet” at least virtually, and “find a match”.
Concerning “training and education”, we have just started to present to the federal authorities the Swiss model of “dual education”. This consists essentially of a vocational education based on practical training in a company for three days a week and on a theoretical level, a program including general education in a professional school during the remaining two days of the week. After three or four years, depending on the trade chosen, and after passing practical and theoretical exams, the young women and men will receive their Federal Certificate of Capacity. This certificate is recognized nationwide as well as in other European countries.
If the candidates have the required abilities and wish to further deepen their knowledge, they have the possibility to enter a Professional High School and obtain a degree in engineering.
What is the current status of the diplomatic relationship between Switzerland and Mexico?
As you can deduce from your previous question, our bilateral diplomatic relations are very good and continuously expanding and developing. But, perhaps I should stress the following: The new Mexican Administration of President Peña Nieto has underlined the necessity that our excellent economic and commercial relationship could and should be upgraded in the political field.
The Swiss Government shares this view. This is because we believe that Switzerland is an interesting partner for Mexico. Not being a member of the European Union, Switzerland’s international agenda is not conditioned by “political instructions” coming from Brussels.
Swiss positions tend to be much more flexible in many fields. In spite of all the differences in size, population and their respective geopolitical positions, Mexico and Switzerland are like-minded on many global issues. Although cooperation between our two countries has been very close in the past, it is likely to be considerably strengthened in the future.
What is the current situation of the commercial relationship between Switzerland and Mexico?
The relationship between Switzerland and Mexico is excellent. Switzerland remains one of the top six foreign direct investors in Mexico.
Mexico is the second most important market for Switzerland in Latin America with aspirations of reaching the first place. According to the Swiss statistics of 2012, Swiss exports to Mexico accounted for US$1.5 billion, while Mexican exports to Switzerland totaled an estimated US$952 million.
As a result of this promising relationship, the Swiss Embassy, along with the official Swiss Foreign Trade Promotion Agency for Small Size and Medium Enterprises, (Switzerland Global Enterprise, SGE) opened a Swiss Trade Office in May 2012. This will become a Swiss Business Hub next year. The main objective is to strengthen trade relations between Switzerland and Mexico, particularly through a search for business opportunities, information exchange and it will generate great new strategic business contacts. The Swiss Trade Office and future Swiss Business Hub in Mexico is part of a network of 19 Swiss Business Hubs for promotion of Swiss trade and investment.
What are the areas of opportunity that you see in terms of strengthening relations between Switzerland and Mexico?
To Upgrade the existing EFTA-Mexico Free Trade Agreement to public tenders; Swiss-Mexican cooperation on a dual system to improve the professional background of students in order to meet the requirements of the entrepreneurial sector; elimination of import taxes on protected goods; and the official opening of the Swiss Business Hub in 2014.
What is the current situation for bilateral investment between Switzerland and Mexico?
Switzerland is one of the most important foreign investors in Mexico, with an accumulated FDI of US$7.6 billion since 1999. An agreement concerning promotion and protection of investments between both countries has been in force since 1995. According to the Mexican Ministry of the Economy, approximately 400 companies with Swiss capital are established in Mexico. In fact, Swiss presence in Mexico can be traced back almost 80 years. All Swiss industrial branches are present in Mexico. This includes pharmaceuticals, chemicals, machinery, construction, food, watches, financial services and others.
Swiss companies are currently expanding activities in the country and thereby strengthening their confidence in Mexico’s economic future.
What areas of opportunity do Swiss Companies see for investment in Mexico?
Based on a consistent, solid and stable macro-economic framework, Mexico is seen by Swiss companies as the right country in which to invest. Given the outstanding development and growth in the automotive, aerospace and medical device sectors, Swiss companies find the main opportunities really are in Mexico.
The outlook for reforms in Mexico has improved significantly. Labor, educational, telecommunications and energy reforms are being seen as opportunities to invest in for new companies.
Mexico is considered by Swiss companies as a significant and growing international trade hub. This is due to the Free Trade Act’s signed with the world‘s leading economies. The point is not only to serve the internal market, but also to serve the external market as a dynamic production site for exporting finished goods.
What is the level of satisfaction for Swiss companies with their operations in Mexico?
In broad terms the level of satisfaction is high. Mexico offers great opportunities for investment. All Swiss companies which have established themselves as successful players in the Mexican market have stood by the country and they have always remained here, even when things were getting pretty bad.
Security continues to be an issue, but the hope is that the situation will improve in the coming years.
What is your impression of Mexico’s economic situation during the first year of Government under Enrique Peña Nieto?
The reform agenda of President Peña’s Government is essential for Mexico and for foreign investors. It has to be recognized that the President has been very courageous to launch a certain number of reforms in fields that have been taboo for decades. But time is pressing and everybody is keen to see the first results of these reforms.
The education, labor, telecommunication, energy and fiscal reforms, just to mention some of them, are very important and I might even say inevitable if Mexico ever expects to project itself into the XXI Century. In terms of macro-economic parameters, Mexico has a good record: inflation, public debt and deficit are under control. Monetary reserves cover twice the external debt. And Mexico, if we consider the number of free trade agreements, is one of the most open economies worldwide. However, the extreme poverty experienced daily by half of the population, the important informal sector, the poor public education system, not to mention the security issue–constitute an important burden that could slow down Mexico’s “take off”. . The above mentioned reforms are crucial for the country. The political will to go ahead seems to be there and the “Pacto por México” represents an excellent basis for the country to leap forward.
Any last comment for the MexicoNOW subscribers?
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