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Article based on an interview with Ildefonso Guajardo, Minister of Economy.
Q: How will Mexico take advantage of the renegotiation of NAFTA to boost the country’s manufacturing competitiveness in the auto industry?
A: The automotive industry in North America is a key driver of economic growth, job creation and global competitiveness for the region. There is the possibility to assess if we can enhance NAFTA’s competitiveness by increasing the region’s value add. Nevertheless, such an evaluation should be based on the importance of preserving the integration achieved over the past 23 years among the sector’s value chains and which has promoted cost-effective production for automakers in all three countries. Mexico and its NAFTA partners can explore additional means to increase competitiveness by collaborating on safety standards, infrastructure improvements to border facilities and by streamlining customs procedures.
Q: What strategies is the Ministry of Economy following to ensure that Mexico remains a competitive destination for FDI despite international uncertainty?
A: Mexico is one of the most open economies to international trade and investment. The structural reforms carried out by President Enrique Peña Nieto’s administration have helped attract domestic and foreign investment in strategic sectors. Specifically, the Ministry of Economy has implemented several actions to simplify doing business in Mexico. First is the easing of regulations to facilitate investment in sectors where FDI was previously restricted. Second is increased accessibility and transparency of the Public Registry of Commerce and Property. Third is the creation, with the support of Congress, of a new corporate figure called Simplified Joint Stock Company, which allows for the creation of an online business at no cost and at any time when annual income is below MX$5 million. Finally, the use of electronic platforms to ease processes related to FDI registry, as well as access to the required national standardization procedures and applicable standards or technical regulations.
Q: What are the government’s priorities regarding the establishment of commercial agreements with Asian and Latin American countries?
A: The Asia-Pacific region is a priority for Mexico. Over the last four years, we have followed different routes to strengthen the country’s commercial ties with these countries. In late 2012, Mexico joined TPP negotiations. However, since TPP’s entry into force is uncertain, Mexico is exploring additional paths to approach the region. For instance, in March 2017 in Viña del Mar, Chile, the Pacific Alliance established the “associate state” category, with the goal of signing trade agreements with Asia-Pacific countries, mainly targeting other TPP hopefuls. Within the framework of APEC, leaders of the Pacific Alliance engaged in dialogues with Asian economies in which they explored common cooperation areas, namely SMEs and trade facilitation.