Intervention EU Head of Delegation at the event: Poland Gate to European Commission Mexico-Poland Economic Forum 2 October 2012 Dear ladies and gentlemen, First of all I would like to thank my colleagues Ambassador Anna Niewiadomska - for the kind invitation to participate in this important seminar. Always a pleasure to participate at an event organised by one of our EU Member States, in casu Poland, a key player within the EU and also with third countries.. My topic will pull you away from Poland temporarily, in order to give you the larger picture of how all 27 member states together trade with Mexico. (Why is the EU interested in Mexico?) WE are Strategic Partners: Mexico is a strategic partner of the EU as the EU is a strategic partner of Mexico.. The reasons are: o Political - role of Mexico in the region and globally. o Close cooperation between the EU and Mexico at they multilateral level e.g. close cooperation EU and Mexico on Climate Change; G20 etc. o But also economically. Economic importance: o Mexico is an important emergent country both from the regional and global perspective. o It is the 13 th economic power in the world, with promising perspectives. o It has a strategic geographical situation: gate to US and gate to Latin America.
o It has all the essential ingredients to compete in an increasingly globalised world. o It has a highly competitive manufacturing sector, o It is an open economy which has demonstrated in the past few years its capacity to recover fast thanks to its ambitious economic reforms and its sound macro-economic management. These are but a few reasons as to why the EU sees in Mexico a trade partner with enormous potential. o This is why we negotiated and put in practice an ambitious free trade agreement (more then 12 years ago) which at the time was avant-garde and then a model for other EU FTAs. o It was the first FTA that the EU concluded in this continent. Since it entered into force in 2000, the FTA has enshrined our bilateral trade relations in a preferential framework and has helped to enhance our bilateral economic ties. Results are very positive: Bilateral trade has increased over 150% since 2000, reaching some 40 billion Euros by last year. Partial figures for 2012 indicate a continuing and strong increase in spite of the difficult economic situation world wide. Reasons of success: From my point of view, the capacity of the Mexican industry as well as its internal market are two very important factors, which help explain the growth that our trade relations have experienced in the last few years.
More potential? - Yes. - Current FTA should be upgraded similar to ambitious FTA we concluded with countries in the region, such as Columbia and Peru - Especially, progress need to be done in sectors (revision clauses) such as services and investments. - More competitively in some sectors - such as energy are needed. (EU-MEXICO trade in numbers) It is true that the trade balance favours Europe, but when looking closer, we see that this is because Mexico imports inputs and machinery from the EU, which are then used to produce final goods exported mainly to the US. Mexico enjoys huge assets and a great potential to increase its productivity, promote its exports to the EU and embrace even deeper sustainable development. Mexican exports to the EU include industrial goods mainly (70%), including transport equipment and machinery. This is very different from the rest of Latin America, which mainly exports primary goods (90%). One example of success story is car exports which witnessed a 240% increase over the last 12 years. Another is optical and photographic material, exports jumped from 180 million to over 1.3 billion Euros over that same period, a 590% increase. All these elements show how Mexico's industrial production is rapidly becoming more specialised and focusing on added value. EU Cooperation programmes in Mexico to support PYMES o EU has very successful programmes to assist, Mexican Small and Medium Enterprises, to enter the EU; to enter European markets such as Poland.. o Assist them with innovation and more competitive.
o PROCEI Programme - assisting 3500 PYMES. European Investment in Mexico Besides allowing significant growth in bilateral trade, the FTA has also acted as a powerful incentive for investment flows. The EU is Mexico's second biggest source of FDI, with 35 to 40% of total accumulated FDI since 2000, more than 100 billion USD. Some of the most recent examples of significant EU investments in Mexico include Audi's well publicized 1.3 billion dollar investment in Puebla, Moller-Maersk's 900 million USD investment in the harbour of Lazaro Cardenas and Ferrero's 200 million new plant in Guanajuato. Having said this, it is also interesting to note that Mexico's outward investment flows have been regularly increasing over recent years, to such extent that in first semester 2012 they exceeded for the first time the inward FDI flow. Allow me in this context, to highlight the strengths of the European market for investment by Mexican enterprises: o Despite the current difficulties in Europe, the real economy in Europe is very strong. o The EU is the largest economy in the world, the first exporter and importer of goods and services and the first origin and destination of foreign direct investment. o When entering the EU, products enter in the biggest, most competitive integrated market of the world. o It is a market of 500 million citizens, with free movement of goods, services and capital. o In other words: a great place to invest!
(Conclusions) As you can see, the way in which our bilateral trade relations have evolved highlights the success of our trade agreement. What we now need to concentrate on is how to deepen our relations within the framework of the FTA (ex.: liberalise trade in services). Trade-wise, Mexico and the EU have a lot in common, and we have been working together in various international fora such as the G20 and the WTO in order to fight rising protectionism. The EU applauds Mexico's anti-protectionist attitude, especially at a time when the global economy is going through some tough times. And we are confident that - despite the current difficulties which the EU is facing, - our bilateral trade and investment will continue to be strengthened. Mexico's export competitiveness, particularly for value-added exports and services. 2 October 2012