The UK Government Department, UK Trade & Investment (UKTI) works with UK-based businesses to try and ensure their success in international markets and to encourage the best overseas companies to look to the UK as their global partner of choice.
UKTI considers Mexico to be a country of huge potential, largely arising from its demonstration of predictable and stable economic growth over latter years. They have also identified Mexico as a dynamic market, presumably having noted analysts’ predictions that Mexico’s economy will be the world´s seventh largest by 2050 (at which point it is predicted to have overtaken the UK!).
Mexico is the largest trading nation in Latin America and one of the world’s top 15 trading nations and as the Mexican economy has grown, so too has its demand for imports, resulting in an increase of UK exports into Mexico.
Mexico was the first Latin American country to become a member of the Organisation for Economic Co-operation and Development (OECD) and is also a founding member of the World Trade Organization (WTO).
EU-Mexico Economic Partnership, Political Cooperation & Cooperation Agreement
Mexico was also the first Latin American country to sign a partnership agreement with the EU (1997). This agreement, called the EU-Mexico Economic Partnership, Political Coordination and Cooperation Agreement, entered into force in 2000 and has considerably strengthened bilateral relations between the EU and Mexico.
This agreement established a Free Trade Area (FTA) between the EU and Mexico, which over the years has helped to enhance their bilateral trade relations and economic ties.
UK-Mexico Cooperation Agreement
Following a meeting between Deputy Prime Minister Nick Clegg and Mexican President Enrique Peña Nieto on the 17th June last, Mr. Clegg made reference to his 2011 visit to Mexico where he spoke of the need for the UK and Mexico to strengthen their ties. Mr. Clegg further stated that it is the UK’s aim to double UK trade with Mexico to £4.2 billion by 2015.
Accordingly, in recognition of Mexico’s expected economic growth, and the UK’s desire to capitalise on same by doubling trade, the UK and Mexico entered into a cooperation agreement on 19 June last which sets out how the responsible agencies in the two jurisdictions will cooperate in the field of export credits.
Bancomext & The Export Credits Guarantee Department
This agreement between Mexico’s National Bank of Foreign Trade known as Bancomext and the UK’s Export Credits Guarantee Department (ECGD) which acts under the operating name ‘Export Finance’, is intended to stimulate and increase trade between the two countries.
From a Mexican perspective, it is intended that the agreement will specifically support small and medium-sized export companies, to which Mexico’s President Peña Nieto has said his administration is giving particular support.
Mexico’s Emerging Market Status
Mexico is becoming recognised as an ‘emerging market’ heavyweight, therefore the act of entering into new or enhanced cooperation agreements should be viewed as ‘good business’ from a UK perspective.