20 Years, 20 Ideas: CEG’ Vision for Mexico’s Next Chapter

Q: What initiatives are you planning to implement during your tenure at the head of CEG?  
A: This year marks CEG’s 20th anniversary. Given the changes in government in Mexico and the United States, and the potential USMCA revision, this is a pivotal time for businesses in Mexico. We have worked with CEOs from our 60-member companies across 20 sectors to identify key issues relevant to all industries. The new Executive Committee is focusing on implementing a defined strategy, broadening the reach of our messages, and amplifying our plans and ideas. These efforts are encapsulated in the 20 Ideas for Mexico document, which focuses on five key topics: talent development, infrastructure, energy transition, effective governance, and security. 

A significant part of our work will involve opening a dialog with key government players and bringing forward arguments and best practices from our companies. Our goal is to improve the country’s conditions so that investment can come in and remain. We will also engage in discussions with other business organizations, whether domestic or binationals, such as the Business Coordinating Council (CCE), the American Chamber (AMCHAM), the Confederation of Industrial Chambers (CONCAMIN), and the German Chamber. This approach allows us to have a clear narrative on the key points we consider important for developing public policy in the country.

Q: What are the non-negotiable ideas that must be implemented to guarantee Mexico's success?
A: All of the issues mentioned in the 20 Ideas for Mexico document are priorities, which is what makes this text important. We worked to identify what is truly crucial to attract investment to Mexico. Some issues may be more pressing in the short term, while others might take longer to resolve due to their nature. For example, talent development is critical. No investment in Mexico can be sustained without the most important asset: people to operate that investment. This includes training and creating a talent pool through institutions, universities, and dual programs, which are common in the European Union and help flatten the learning curve when students transition to the industry. Finding the skilled people we need has been a challenge, and if we envision a future with more investment and growth, talent can either drive or limit that progress.

Infrastructure is another key area, which involves roads, ports, airports, customs, and all aspects of connectivity, both physical and digital. We cannot ignore the need for significant investment in infrastructure, especially to foster more development in the central and southern parts of the country. All our companies have commitments, whether for 2030 or 2050, related to climate change, sustainability, and balancing available energy sources.

Effective governance is also essential because no investment makes sense without a well-functioning government. Regulatory processes need to accommodate innovation and new technologies, and legal certainty is essential for attracting investment. Finally, security cannot be overlooked. It has deteriorated over the past two decades and is a top priority that needs to be addressed now. This is often at the forefront of board members’ concerns. 

Q: How does CEG plan to engage with the incoming administration to convey its proposals for economic development? 
A: The CEG has historically been a proponent and a voice that brings ideas and proposals to the table. We strive to remain impartial, transparent, and technical, minimizing political bias. The 20 Ideas for Mexico document was well received by Minister of Economy Raquel Buenrostro, as we share a common goal: a Mexico with growth opportunities, development, equity, and equality. We also had an opportunity to discuss these issues with former Foreign Minister Marcelo Ebrard. We plan to continue these conversations with the Ministries of Infrastructure, Communications and Transport (SICT), Labor and Social Welfare (STPS), Energy (SENER), and Public Security (SSPPC).

We are still organizing the best approach to engage with key players, but our fundamental goals are to build bridges, debate ideas, bring forth arguments, and ultimately find the best path forward. There are undoubtedly many ways to achieve this, and that will be the core of our discussions. Our approach will focus on transparency and empathy as we move forward as a council.

Q: What contributions do CEG companies offer, and how does Mexico's strategic position enhance these opportunities?
A: CEG members represent 10% of GDP and generate 8 million formal, well-paid jobs in the country that offer growth and development opportunities. CEG companies prioritize diversity, inclusion, and the highest ethical standards in the workplace. Many of us have had a strong presence in Mexico for over 100 years, which gives us a deep knowledge of Mexico’s landscape.

For companies, Mexico's geographical advantage is undeniable thanks to its extensive border with the world's largest market. Since the inception of NAFTA, we have been integrating value chains across industries, which has made the three countries increasingly interconnected. This integration means that every dollar, euro, peso, or yen invested in Mexico has a higher return potential compared to other countries.

Q: What skills is the market demanding, and how can the public and private sectors collaborate to achieve the necessary level of preparedness?
A: There are several different areas to consider. Companies must remain committed to training, development, and clearly understanding the skills required for the future of nearshoring and the digital era. Most CEG members are industry leaders and lead our suppliers and business partners to engage in similar activities. Our ability to influence the government to support STEM programs is also crucial. Over the past three years, we have worked on dual education and promoted STEM careers. While these are not the only areas the country needs to address, they are important due to the nature of our companies, often centered on innovation, engineering, and manufacturing. We have prioritized these roles within the talent pool.

We also engage in extensive mentoring work with universities, even those without a dual education program. While these initiatives are a cross-industry effort, the specific needs vary greatly between sectors, whether it is financial, automotive, food, or pharmaceutical. 

Q: What opportunities is nearshoring unlocking in Mexico?  
A: The most crucial metric is FDI, and we need to measure it constantly and objectively. The CEG has historically accounted for 40% of FDI in the country, and investment has continued. As an example, Bosch recently inaugurated a new plant in Nuevo Leon. While nearshoring offers an additional opportunity for investment, it does not come without challenges. We must do our part, send the right signals, and respect the guarantees and obligations we have as a country in international treaties. As a country, we must provide these basic guarantees to attract foreign capital.

Q: How does CEG estimate its potential impact on Mexico’s FDI? 
A: We typically conduct an exercise at the beginning of each administration to estimate how much each company plans to invest over the next six years. We will be doing this exercise for the 2024-2030 period in 4Q24, aiming to have a consolidated figure by January 2025 so we can make an announcement with President-elect Claudia Sheinbaum.

Q: How might the results of the US elections impact companies, and what reasons might there be for both concern and optimism?
A: It is challenging to predict the outcome of the upcoming elections and the USMCA review in 2026. Over the past 20 to 30 years, Mexico’s geographic advantages have benefited all three USMCA countries, enhancing the strength and resilience of our value chains. This underscores the mutual benefits of continuing with the USMCA, regardless of whether the US administration is Democrat or Republican.

The approach for the Mexican government might differ depending on the political climate in the United States, but our work as industry partners focuses on identifying pain points and sensitive areas for each country to enhance the USMCA. The goal remains to improve the agreement for all three nations, as it has been beneficial for everyone involved. While negotiations may change based on political shifts, the overall objective remains aligned across the board.

From my personal perspective, it would be detrimental not to continue with the USMCA. All CEG members have significant operations in the United States and Canada and are invested in the agreement's continuation. 

Q: What are CEG’s priorities for 2024 and 2025? 
A: Our membership includes a little over 60 companies, and our Executive Committee plans to grow to around 70 or 75 members. This expansion will help us cover industries that are underrepresented. We look for companies with global operations, with headquarters outside Mexico, and preferably publicly traded on their country’s stock exchange, although we also accept private companies. Our focus remains on relevance rather than nationality, prioritizing companies that rank among the Top 3 in their sectors within Mexico.

Being a top player usually means having an established presence in the country, except in newer industries like e-commerce. We prioritize having the most significant and relevant companies in each industry regardless of their origin, such as Mercado Libre, the largest e-commerce company in Mexico. 

The Global Companies Council (CEG) groups above 60 multinational businesses from over 20 sectors, accounting for 40% of FDI in Mexico,  10% of the country’s GDP, and 8 million jobs. CEG aims to promote a better business environment and push Mexico’s competitiveness to make Mexico an attractive investment destination.