This government has made a huge push to improve trade in Latin America but so far UK plc seems to be underperforming. What more can you do?
There is no doubt that historically we have underperformed. However, in recent years UK trade with Mexico has grown by about a third while Colombia is one of our fastest-growing export markets. Of course we want more and the reason that the Deputy prime minister and myself are here is that we are trying to push British businesses to get involved in the region. Mexico is Latin America’s most open major economy already and the current batch of reforms will throw up exciting opportunities for UK firms in construction, energy and education. We want businesspeople to realise the opportunities in Latin America. Of course many have been aware of Brazil’s potential for a long time now, but they have been a bit slower to look at other interesting areas. In addition to Mexico we think that the other Pacific Alliance members of Colombia, Peru and Chile also offer a lot for UK firms.
Here in Mexico, at a micro level, we have opened the business centre, which will complement what the British Chamber of Commerce is already doing to help British companies. On a macro level we would like to see an update of Mexico’s trade agreement with the EU. Britain and Mexico already have a strong relationship but we make up just 1% of each other’s trade. That’s not good enough for either country and both will be working to improve it. I believe that Mexico’s strong economic growth – it could grow at up to 5% per year – and the package of reforms will help to attract serious investment from British companies.
What about the challenges? Many companies complain about corruption or security issues – do you think that they will be a problem for British firms?
I think the first thing to recognise is that corruption is a problem in many parts of the world. Fortunately here we can see that the new administration is making an effort to tackle it. Do I think that corruption in Mexico prevents business opportunities? No – Mexico is absolutely a place you can do business in.
It’s also worth remembering that the UK has strong anti corruption laws that apply outside and inside the UK. And when we help firms to do business here, we help them to do good, non-corrupt business. The British companies already here understand the corruption law but we also give training sessions to companies coming here for the first time to make sure that they – and their local suppliers – understand it.
“Mexico is Latin America’s most open major economy already and the current batch of reforms will throw up exciting opportunities for UK firms in construction, energy and education…”
As for security, I think we should acknowledge that it has improved a lot. For example I didn’t have a security detail when I was walking around here and that’s not always the case when I go on these visits. The fact is the vast majority of Mexico is safe. In some areas there may be problems but then British global companies, especially in the oil and gas sector, will encounter them in other countries too.
I think with these issues it is very important that UK firms look at the Mexico of today and tomorrow, not the Mexico of five or ten years ago. Mexico today is a fast-growing economy, vying with Brazil to be the largest in the region and it is already the biggest trading nation in Latin America. For many British firms the problem is perception. There is still an outdated view of Mexico that doesn’t take account of the tremendous opportunities here.