Maximiliano Reyes Zúñiga
Deputy Minister for Latin America and the Caribbean
Ministry of Foreign Affairs
Expert Contributor

Looking South: Mexican Companies in LATAM and the Caribbean

By Maximiliano Reyes Zúñiga | Tue, 09/15/2020 - 09:14

The relations of Mexico with the countries of Latin America and the Caribbean are at an all-time high. Since the beginning of President Andrés Manuel López Obrador's Administration in December 2018, Mexico's leadership in the region has consolidated in all areas.

In the last three decades, Mexico has expanded its commercial exchanges in Latin America and the Caribbean. With this effort, Mexico has signed 16 bilateral trade agreements and four regional trade agreements with Latin American and Caribbean countries, and more than 200 multinational Mexican companies are investing in the region, making Mexico the main investor and trading partner for 20 LATAM countries, especially in Central America and the Caribbean. 

Regionally, trade cooperation mechanisms have progressively strengthened.  The Pacific Alliance comprising Chile, Colombia, Peru and Mexico, has expanded foreign trade, increasing business opportunities for Mexican companies. In recent years, Mexico exported around US$25 million within the Alliance. 57% of international trade between the member countries comes from this mechanism.

In 2019, the Ministry of Foreign Affairs (SRE) and the Ministry of Economy signed a collaboration agreement that provides a framework to support Mexican companies abroad through Mexican Embassies and to attract foreign investment to Mexico. Both Ministries created synergies to inform companies about export and investment opportunities such as Data Mexico –an online tool to provide trade information- and business matchmaking forums. Likewise, the Ministry of Agriculture and Rural Development provides information on the agricultural export offer for its promotion through Mexico's representations abroad. 

In order to materialize these efforts, the Deputy Ministry for Latin America and the Caribbean has encouraged the Mexican Embassies in this region to maintain close communication with Mexican companies and their subsidiaries in their countries. At the same time, they have the task of strengthening trade and finding business opportunities for Mexican products.

Therefore, the Embassies of Mexico in Latin America and the Caribbean carry out activities that promote business opportunities among companies and promote the Mexican export offer. Collaboration between the Embassies of Mexico and the bilateral chambers of commerce and promotion agencies makes possible for companies to participate in seminars and matchmaking rounds, for example, the Pacific Alliance’s Business Matchmaking forum -better known as Macrorrueda- or Expo ALADI. More than 400 Mexican companies participated in the 2019 Business Matchmaking Forum held in Arequipa, Peru.

Milestones have been achieved; México and Brazil reached a final agreement within the Economic Complementation Agreement 55 (ACE 55 by its Spanish Acronym) between Mexico and MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) to grant preferential treatment to the trade of heavy commercial vehicles; the Free Trade Agreement with Uruguay has doubled bilateral trade since its implementation. Likewise, negotiations are underway to deepen, expand and modernize the ECA between Mexico and Argentina (ACE6), as an excellent economic and commercial opportunity for both nations. Finally, the negotiation of a Free Trade Agreement between Mexico and Ecuador is also moving ahead with the aim to integrate Ecuador as a full member of the Pacific Alliance.

The relationship between Mexico and Argentina is a clear example of trade consolidation and a development axis throughout Latin America, including the agreement to manufacture a COVID-19 vaccine for distribution in the region, taking advantage of the capacities already installed in the region to provide social well-being. This effort was accomplished thanks to the Mexican Pro Tempore Presidency in the Community of Latin American and Caribbean States (CELAC) in 2020 and its proposed work plan to promote efficient cooperation through actions of mutual benefit. 

It is important to highlight the strength that Mexican corporations have shown in international markets, thanks to their adaptability to all kinds of macroeconomic environments and the creation of alliances and synergies with local partners, obtaining favorable results. Their efforts to diversify business and sustain their investments have been supported by Mexico's representations abroad.

At the same time, with the entry into force of the Agreement between the US, Mexico and Canada (USMCA), last July Mexico ratified its role as a platform to the North American market for all countries, including Latin American and the Caribbean of course.

Today, all countries face difficult economic challenges. In light of this situation, we must take advantage of the synergies created between companies and Embassies to strengthen coordination, generate new business opportunities and reduce the pandemic impact working together.

Mexico draws a new horizon in its relationship with Latin America and the Caribbean, not only through trade and the efficient use of economic agreements but also by promoting unprecedented cooperation and integration to create a common front in favor of our people.