Ireland and Mexico should be natural business partners as both promote themselves as “gateways” to their larger single markets – the European Union and the North American Free Trade Agreement, according to Mexico’s economy minister.
Ildefonso Guajardo was in Ireland this week to take part in the Dublin Mexico trade conference.
Mr Guajardo says that since the signing of a free trade agreement between Mexico and the European Union in 2000, Europe has become a main target for Mexican economic growth.
This is because it is the second biggest trade partner and source of foreign direct investment, after the United States of America.
“Ireland is a natural gateway to Europe for us, and the Irish experience in IT is something we have to look at closely, given the position Mexico holds in that field in the Americas”, he told RTÉ News.
Mexico has the sixth largest electronics industry in the world, and claims to be number one in the manufacturing of TV sets and number three for PC manufacturing.
It also has some 450,000 students enrolled in electronic engineering courses and last month overtook Japan to become the second biggest automobile exporter to the US.
Mexico exports a range of manufactured goods to Ireland including medical products.
It imports a wide range of goods and services from Ireland, from technology support to dairy industry plant. However Mr Guajardo would like to see more investment by Irish firms into Mexico, the attraction being to use it as a base to sell into the entire NAFTA region – USA, Mexico and Canada.
“Since the signing of NAFTA 20 years ago it seems obvious that a very good way to enter into the North American market is to do business in Mexico”, he said.
As for the current Transatlantic Trade and Investment Partnership trade deal under negotiation between the US and the EU, Mr Guajardo said it would have been better to have an EU-NAFT deal rather than three separate agreements.
Canada has agreed a deal with the EU, Mexico is starting on an update of the 2000 free trade agreement.
However when TTIP is complete he expects to see a convergence between all three deals.
He also stressed the importance for European firms doing business in Mexico of the rules on local product content in any TTIP deal, which he said must recognise any North American product as a US product - so as to not throw up new trade barriers.
Mexico’s own economy is forecast to grow by between 3% and 4% this year, according to the Central Bank of Mexico, and Mr Guajardo says after weak growth of around 1% last year, growth should pick up strongly from the second quarter of this year.
He said strong reforms introduced by the administration of President Enrique Pena, who came to power in 2012, will pay off over the medium and long term.
He said a strong increase in FDI into Mexico was indicative of confidence among investors in the country and the reforms it was introducing. FDI last year was $32 billion, compared with an average of $19 billion a year between the signing of NAFTA and 2012.
An economist by training, Mr Guajardo has spent a large part of his career as a trade diplomat before entering politics.
He has been an associate professor of economics at Wharton Business School at the University of Pennsylvania.