Czech Republic Sees Greater Business Potential in Mexico

Q: The Czech Republic has an open and export-driven economy. How are Czech businesses doing in Mexico? 

A: The Czech Republic is one of the region’s most prosperous economies and one of the most industrialized countries in the world. As a member of the EU, our economy is highly integrated into European value chains, with Germany as our top trading partner. 

Similarly to Mexico, our long-term aim is to diversify our foreign trade. In that sense, I am pleased that Mexico is by far our main export market in Latin America. Our companies appreciate Mexico for its enormous internal market and as a hub both for the Northern American market and for other Latin American countries. In short, we are doing well but at the same time there are still many opportunities to be explored.  

Q: How does the embassy support Czech companies wanting to enter the local Mexican market?

A: There is a lot going on right now. For a fourth consecutive year, the Czech Business Support/PROPEA program is successfully helping Czech companies achieve a soft landing in the Mexican market. The embassy is also organizing trade shows, presentation seminars or business missions to bring Czech production closer to Mexican clients and vice versa. I just returned from a series of seminars in the Czech Republic about opportunities and doing business in Mexico. Our CzechTrade promotion agency office in Mexico is also doing a fantastic job in providing B2B services and export counseling services to particular companies interested in the Mexican market.

Q: What are the main areas of interest for Czech businesspeople?

A: Overall, we see great potential across sectors and several Czech companies are expanding their presence in Mexico. The scope is wide but the automotive, airspace, defense and health sectors are of particular interest. We also see the rising demand in the area for sustainable production technologies, green mobility, ICT and fintech.

Finally, the energy sector will grow and modernize in the coming years and our providers are keen to be on board with this process.

Q: Which products and services from the Czech Republic have high potential in Mexico? 

A: Mexico is our most important commercial partner in Latin America and second-most important in both Americas, just after the US. Our bilateral trade has been growing at a rapid pace and the good news is that last year, trade volume surpassed US$2 billion.  

Mexico has a huge and vibrant internal market and diverse demand. Goods and services that have high-added value are favored by many local clients. That is the niche where high-quality Czech products are appreciated and competitive with the top-end offer on the market. This is a cross-cutting phenomena that we observe from innovative machinery and green technologies to the design and construction industries.

Q: How have you collaborated with Mexican groups to grow trade between the two countries? 

A: Cooperation with Mexican partners is crucial to our work. They help us to shape strategies in order to penetrate the market efficiently and are indispensable partners in executing our commercial projects in the country. We have close relationships both with the private sector, business chambers and industry leaders, as well as with the federal and regional governments. 

In the recent past, we intensified ties with academia and R&D infrastructure, especially in areas closely linked to our priority areas, such as biotechnology, advanced manufacturing or information and communications technologies (ICT). 

The same is true for specific commercial cases: a good local partner is a key to success for a foreign company in Mexico. It is no surprise then that the most demanded service in our support work is matching Czech entrepreneurs with a reliable local partner.

Q: How have the existing trade agreements, and those in progress, generated greater trade links between the Czech Republic and other countries in the Americas?

A: One of the main reasons that helps our companies to export and invest in Mexico is without a doubt the EU-Mexico Global Agreement. It simplifies the import procedure and removes the majority of tariff duties. It has boosted our bilateral trade enormously and incited Czech companies to choose Mexico over other Latin American markets when considering their export strategy in the region.

The agreement is currently in a process of modernization with the aim to further liberalize trade between the EU and Mexico and open new opportunities for investment. We see potential especially for industrial processes (car parts and medical equipment), food exports, services (ICT, transport and tourism) and government procurement. 

The Czech Republic and Mexico further have a bilateral agreement on the mutual protection of investment and an agreement to avoid international double taxation. The Czech Republic is also a major player in the aerospace industry, mainly as an ultra-light aircraft manufacturing hub. 

Q: What opportunities do you see for both countries to strengthen their cooperation in the aerospace sector?

A:The Czech Republic has a long aviation tradition and is known for its outstanding quality, reliability and innovation in the industry. Recently, the traditional Czech producer Aero Vodochody introduced a new light jet aircraft: the L-39NG, which could be of interest to the Mexican Air Force. Other Czech planes, such as the ZLIN Z-242, are already being used by the Mexican Navy. The latter plane was recently on display in Mexico at FAMEX 2023 in April.

As the industry becomes more and more globalized, I see many opportunities for bilateral joint programs and technological partnerships that would take advantage of the unique Czech know-how and the fast-developing aerospace industry in Mexico. 

Q: What is the expected outcome and the purpose of the call for service contractors for the PROPEA program for 2023?

A: As in previous years, we help Czech companies willing to establish in Mexico with the initial processes, be it establishing a branch, finding the best location for their production or protecting their intellectual property rights. We do not prioritize any sector but focus on the competitive advantages and the exporter’s or investor’s readiness. The past few months have been definitely marked by higher interest in exploring manufacturing possibilities in Mexico and entering the local supply chain. 

Q: In which ways could Mexico and the Czech Republic take advantage of the nearshoring success to have more projects together? 

A: The trend of nearshoring is gaining strength in response to recent supply chain shocks from the Russian aggression in Ukraine or COVID-19 containment policies. Mexico’s strategic location is highly attractive for Czech companies that aim to relocate their operations closer to their main destination markets in North America. The most obvious benefit of moving production to Mexico is the savings in transportation costs and times. But Czech producers eye Mexico also for its qualified and affordable workforce and, in recent turbulent times, also for energy and commodity prices.

Zuzana Stiborová began as a human rights lawyer in the Ministry of Foreign Affairs of the Czech Republic. She later became the head of the deputy minister’s office and is now the head of the economic and commercial section of the embassy.