In recent years the bilateral bonds between Mexico and Spain have been characterized by an exciting dynamism. At this time, Spain is Mexico’s second largest trading partner and the main investor among European Union member countries. This is reflected in new terms of cooperation in diverse fields of action. And, it is certainly reinforced by the Free Trade Agreement signed between Mexico and the European Union in 2000. The outlook and expectations are very positive regarding the collaboration between the two countries in their respective political, economic, commercial, scientific – technological, academic and cultural agendas.
Other agreements between Mexico and Spain include the Industrial, Energy and Mining Cooperation Agreement in effect since 1979. There is also the General Treaty of Friendship and Cooperation from 1991. Next is the Convention for the Avoidance of Double Taxation in place since 1994. In addition, we have the New Agreement for the Promotion and Reciprocal Protection of Investments which was approved in April 2007. Add to the list the Tourism Cooperation Agreement (1996) and the Air Transport Agreement that was approved in April 2007 by the Mexican Senate.
In June 2008, a labor cooperation agreement was signed. This “Developing of Pilot Experiences in the Field of Management of Migration Flows” aims to develop management experience jobs in Mexico for Mexican citizens who will one day be serving somewhere on Spanish territory in all fields of economic activity.
Exhibit 1 summarizes the Trade Balance between Mexico and Spain. It shows that commerce between the two countries reached its maximum level in the year 2012. This bilateral commerce has experienced many up and downs. This is mostly reflected by the global recession during the years 2008 and 2009, but more recently it has again recovered in a satisfactory way following a path of continuous growth since 2010.
Several important factors in the trade balance between Mexico and Spain are revealing.Take, for instance, the fact that during the 13 year time span from January 1999 to December 2013, total exports from Mexico to Spain rose from US$943 Million to US$7.2 billion (+663%). And at the same time, imports from Spain to Mexico also showed a 226% growth.
Total commerce between the two countries and reciprocal action brought in US$11.5 billion during 2013 in trade between the two partners and showed important improvements. This has been especially true of the period since 2012. This was when for the first time that the total commerce “stats” were available identifying the US$11 billion. In fact, the period 1999 to 2013 represents a 408% growth rate in total commerce between the two nations. And another interesting detail is that in 2013 there was a 3.65% increase in commerce (US$11.5 billion) in comparison with (US$11.1 billion) 2012.
Spain represents the 2nd largest commercial partner with Mexico among all the members of the European Union. Spain also reflects 17.7% of the total commerce between Mexico and the European Union.
Exhibit 2 shows Spanish Investment in Mexico. Spain is the largest investor in Mexico among the EU members with over 40% of the accumulated total and is the 2nd largest investor among all the countries in Mexico. During the period from January 2000 through March 2014, companies with capital from Spain invested US$42.9 billion in Mexico.
There are 4,225 companies with Spanish investment in Mexico, according to data from the Ministry of Economy (September 2012). The main sectors with private Spanish capital in Mexico are financial services, communications and transport, and manufacture.
The main Spanish companies investing in Mexico are BBVA Bancomer, Santander, Iberdrola de Mexico, Telefonica and Gas Natural Mexico. There are also Armani, Union Fenosa Mexico, Inditex de Mexico, plus Mapfre. Add to the list Aernnova, Industria de Turbopropulsores ITP, Abengoa and Gruas GH. They all have an important presence in Mexican territory.
Aernnova has successfully landed operations in Queretaro for the production of carbon fiber aircraft structures. Airbus, Boeing, Bombardier, Eads, Embraer, Eurocopter and Sikorsky are just some of the names featured in the client portfolio of Aernnova. This company manufactures metallic and composite parts, in addition to providing engineering, repair and product support services. Aernnova projected that it would channel US$100 million into its Mexican operations between 2009 and 2014, a figure that has since risen to US$140 million.
According to Expansion, there are 10 Spanish companies among the 100 Largest Foreign Companies in Mexico, and in the Top 10 in position #4 is BBVA Bancomer.