Friendship, Cooperation Help Tackle Automotive Challenges

Q: How are the Mexican and Japanese governments promoting trade between both countries?
A: Japan and Mexico have more than 400 years of friendship. In 2018, we will celebrate the 130th anniversary of the Treaty of Amity, Commerce and Navigation between both countries. Mexico was the first country to sign an equal-footing treaty with Japan and other countries have followed. Before this, Japan had discriminatory treaties with the US and European countries. Both the Japanese and Mexican governments have promoted people and cultural exchanges with each other, which added to Japanese immigrants’ hard work and support for Mexico’s development. This has also resulted in Japanese companies enjoying the trust of the Mexican people. The most significant trade-promotion project between both nations has been the Economic Partnership Agreement (EPA) implemented in 2005. I negotiated the EPA on behalf of Japan between 2001 and 2003. Since its establishment, trade volumes have doubled and investments have grown significantly. While Japan has always been the top Asian investor in Mexico, Japanese investments grew rapidly due to this treaty.
Q: What are your main objectives as the new Ambassador of Japan in Mexico, especially regarding the auto industry?
A: Our main objective is to further improve the business environment for Japanese companies so they can contribute to the development of the Mexican economy. Japanese players come to Mexico because of its macroeconomic stability and positive open-trade policies, as well as its young and skilled labor force. Business could still be improved by solving the challenges related to talent development, security and infrastructure and for that reason, the Japanese and Mexican governments created a committee under EPA to analyze these hurdles and how best to tackle them.
Q: What can Japanese OEMs and their local suppliers expect from NAFTA renegotiations?
A: Both the Mexican Minister of Economy Ildefonso Guajardo and the Mexican Minister of Foreign Affairs Luis Videgaray visited Japan in July and at the beginning of August 2017. They explained to Japanese companies that the objective of renegotiating NAFTA is to modernize the treaty. They pointed out that the Mexican government’s goal is to improve North America’s competitiveness, which is exactly what Japanese companies expect from this process. Japanese investors always invest following long-term perspectives. Once they decide to do so, companies come to stay. At the moment, there are over 1,100 Japanese companies in Mexico and while uncertainty stemming from NAFTA negotiations makes companies cautious, we have not observed any changes in the strategies of Japanese companies in Mexico.
Q: What is the Japanese government’s most important contribution to the development of Mexico's auto industry?
A: Development of human resources and local suppliers are key issues that need to be solved in the automotive sector. The Japanese government has made several efforts to help Mexico beat these challenges, fostering what we call “Supporting Industry” by sending experts and training Mexicans in Japan to develop domestic suppliers. We also support local players by matching them with Japanese companies in Mexico and working with local governments to create new academic plans that meet the demands of the private sector. The Embassy of Japan participated in the creation of a new course on automotive manufacturing in CONALEP San Juan del Rio, Queretaro, for example.
Q: How ready are Japanese companies to integrate local suppliers into their productive processes?
A: Japanese companies must work with local manufacturers to satisfy local content rules established by NAFTA. These companies are developing Mexican talent and working with local suppliers. As part of our academic exchange programs between Mexico and Japan, we send 50 Japanese youngsters to Mexico and receive 50 Mexicans in return. Approximately 4,000 students have benefited from this program.