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North & Central America and Caribbean
Mexico |
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Last reviewed: 10 September 2009 |
Country information
TRADE AND INVESTMENT
Trade and Investment with the UK
Mexico is the UK’s second largest export market in Latin America. UK exports of goods in 2008 were estimated at around £900m. Principal exports include automotive components, pharmaceuticals, power generating machinery and equipment. Good imports from Mexico in 2008 were estimated at around £785m.Mexico offers British business real opportunity, given the limited growth rates in traditional markets and the Mexican government and businesses' desire to reduce dependency on trade with the US. The past decade has seen sound management of public finances including continual economic growth and stable inflation.
UK Trade and Investment is the Government organisation that helps UK based companies succeed in international markets and assists overseas companies to bring high quality investment to the UK economy. Mexico is designated one of UKTI's priority High Growth Markets; the UKTI High Growth Markets Programme helps UK companies capitalise on major commercial opportunities in some of the world's fastest-growing markets. Mexico regularly ranks in the top 3 emerging markets in which to do business.
The UK is one of the top 10 investors in Mexico. Some of Britain's major investors include AstraZeneca, BAT, BP, Diageo, Glaxo Smith Kline, GKN, Shell, BT, BSI and Unilever. The most significant individual investment was the US$2bn purchase of a Mexican bank by HSBC in 2002. There have also been some important Mexican investments in the UK. In 2004 British RMC was bought by Mexican Cemex for US$5.8bn. Several other Mexican companies, including Grupo Gruma, also have significant investments in the UK.
A Double Taxation Agreement (DTA) between UK and Mexico was signed in 1994. A UK/Mexico Investment Promotion and Protection Agreement (IPPA) was ratified in 2007. The EU/Mexico Free Trade Association Agreement has eliminated all tariffs on EU-origin industrial goods.
What are the opportunities?
With a population of 111 million people, including a large and growing middle class, Mexico is a significant potential consumer market. It is the largest trading nation in Latin America and one of the world’s top ten.
Goldman Sachs and The Economist Intelligence Unit both believe that Mexico will be one of the five largest economies in the world by 2040.Demand for UK goods and services extends across the economy from sectors as diverse as education and automotive parts to food and drink.
The implementation of the EU/Mexico Free Trade Agreement signed in July 2000, led to the elimination of all tariffs on EU origin industrial goods on 1 January 2007. With no import duties, UK exporters can now compete on equal terms to US and Canadian exporters. Mexico may also serve as a useful basis for UK companies to manufacture given the free trade provisions of NAFTA, the North American Free Trade Area which means that Mexican manufactured goods can be imported free of tariffs to the USA and Canada.
The Mexican President launched a major National Infrastructure Plan in July 2007. Under the plan, a staggering $50 billion every year for the next 5 years will be invested in developing the country's ports, airports, roads and railways.
UK Development Assistance
The Department for International Development does not have a programme in Mexico.
The British Embassy runs the Strategic Programme Fund, with projects in the areas of climate change, human rights and economic reform. Interested NGOs and other organisations are welcome to approach the Embassy with details about objectives and draft proposals.
Information on the current priority areas for the Strategic Programme Fund activity in Mexico can be found on the Embassy’s website: British Embassy, Mexico City.
The British Embassy also runs the Sustainable Development Dialogue, funded by the UK’s Department for the Environment, Food and Rural Affairs. This Dialogue funds projects in six priority areas aimed at encouraging sustainable development: governance, climate change and energy, sustainable tourism, sustainable consumption and production, sustainable urban development and natural resources management.
