Investment Is Key to Take Advantage of Nearshoring: Mignot

In the context of the celebration of the European Union Day,  Gautier Mignot, EU Ambassador to Mexico, discussed the importance of private investment in Mexico to achieve the country’s 2030 energy goals.

Mignot talked about the importance of private investment and the challenges investors face in the country, which could hamper further development of renewable energy. He also highlighted a decrease in private investment in the renewable sector. The ambassador expressed respect toward Mexico’s autonomy and policy management but underlined certain challenges that the country needs to address for which private investment is necessary. “We understand and respect the will of the Mexican government to strengthen the leading role of CFE in this matter. We also find very positive that CFE invests in renewable energy, but private investment will be required,” mentioned Mignot.

He also mentioned the potential for nearshoring in Mexico, highlighting a foreseeable increase in energy demand, especially clean energy. “We need to find a way to encourage foreign direct investment and open up to private investment to meet the demand for green energy from the influx of new investments resulting from the nearshoring trend,” he said.

Mignot expressed concern over the violence and attacks against journalists, as well as the high number of disappeared people in the country. He mentioned that the EU offered technical assistance to some states in identifying missing people.

Regarding the free trade agreement (FTA) between the EU and Mexico, Mignot mentioned that the EU is searching for a way to expedite the ratification of the treaty, bypassing the parliaments of all member states to prevent delays in the process.

Although Mexico and the EU conceptualized the modernisation of their FTA over a decade ago, the process began years later. Both parties supposedly reached an agreement four years ago regarding the treaty. However, they have not yet signed its renewed version. According to the Financial Times, Mexico was resisting the signing of this agreement back in January 2023 due to changes proposed by Brussels. That same month, Reuters reported that the EU had intentions to speed up the process of five FTAs to reduce its dependence on China regarding raw material supply.

Mexico’s energy and mining policies have hampered investment, seeking to strengthen state control over both industries. Experts have underscored the challenges this could impose to develop the industries to their full potential, especially in light of the opportunities that nearshoring could bring to the country.

In July 2022, the Transnational Institute published a letter urging parties to refrain from ratifying the FTA between the EU and Mexico. According to the institute, despite the age of the original agreement, both parties had failed to fulfill the FTA's promises, resulting in negative consequences primarily for Mexico. The institute’s publication discussed that the treaty was developed without civil involvement and was agreed during a moment of global crisis due to the pandemic. Furthermore, it also discussed that the agreement mostly protected foreign investors, jeopardizing urgent changes in favor of the climate, environment and people.