It is an exciting time for Mexico and its trading partners. Last month was the fruition of an unprecedented reform program aimed at improving the country’s productivity and competitiveness, rendering it capable of playing a more active role in the global economy.
According to Mexican ambassador José Ignacio Madrazo, the reforms will prove to be highly significant for his country’s economy and will enable Mexico and Denmark to improve their already successful trade relations.
‘Landmark’ reforms
“Over the past two years, the government has negotiated with the opposition parties to pass a series of laws resulting in a landmark constitutional reform,” he explained.
“The reforms will affect areas such as the labour market, education and telecoms, but the most significant is the energy reform.”
Restrictions lifted
Mexico is one of the richest oil countries in the world, but for decades, a state monopoly has meant that the energy sector has also been one of the world’s most closed to private and foreign companies.
“It was difficult for oil companies to invest and therefore impossible, for example, to do deep-sea drilling. Technology and capital is needed from the private sector,” said Madrazo.
“The energy reform will facilitate private investment and an oil fund will be established – similar to the one in Norway.”
New opportunities
Danish companies will particularly benefit from the new opportunities for private participation in the Mexican oil and gas sector.
“Companies, such as Maersk, Welltec and many others have been supplying services to the Mexican energy sector for many years. They will now be able to play a greater role,” Madrazo said.
And the reorganisation of the energy sector will have influence beyond the extraction of fossil fuels.
“Another very important sector is green energy,” continued Madrazo.
“Denmark is a leader in this sector and there is huge potential in Mexico, especially for wind and solar power.”
Danes already there
Many Danish companies already take advantage of opportunities in Mexico.
“Relations between our two countries are already very good. Last November, the Crown Prince and Crown Princess visited Mexico to promote trade and investment and Dansk Industri has opened an office in Mexico City to help Danish companies there,” Madrazo pointed out.
Lego has one of its largest plants in the world in Monterrey. Vestas, Maersk, FLSmidth and Arla are also heavily invested in the country and there is a huge market for the pharmaceutical industry. Novo Nordisk is involved in tackling the diabetes problem in the Mexico.
Ambassador optimistic
But Madrazo emphasises that the trade and investment are very much bilateral. “There is also significant Mexican investment in Denmark,” he said.
“Three and a half years ago, the packaging company Envases Universales bought the Danish Company Glud & Marstrand, including all its plants in Denmark. Mexico and Denmark also co-operate on climate issues and recently signed a bilateral climate and energy agreement.”
Madrazo is optimistic that the reforms will pave the way for even more co-operation to the mutual benefit of the two countries.
“At the embassy we can already see there is more interest from companies wanting to do business in Mexico or expand their activities in Mexico,” he said.
FACTFILE: MEXICO
- Mexico’s population is 118.4 million
- The capital, Mexico City, has a population of 8.6 million (urban area: 21.2 million)
- The GDP of Mexico is 6,901 billion kroner
- Mexico will have the seventh biggest economy in the world by 2020
- The value of exports from Mexico to Denmark is 1 billion kroner per year
- The value of imports from Denmark to Mexico is 2.5 billion kroner per year
Sources: Dansk Industri and the Mexican Embassy
