Within the framework of the official visit by President Enrique Peña Nieto to Germany, Memorandums of Understanding  were signed today between the German Ministry of Economy and Energy and its Mexican counterparts, to promote economic relations and, above all, to foster mutual investment between the two countries.

“Relations between Germany and Mexico are undoubtedly based on friendship and understanding, as well as on a broad, growing economic exchange.”

In 2015, bilateral trade between Mexico and Germany  exceeded 15.75 billion Euros, 21 percent more than the previous year.  In the past 16 years, cumulative Foreign Direct Investment from Germany has exceeded nine billion Euros.

There are 1,800 thousand companies in Mexico with German investment, which create 120,000 direct jobs. Companies such as Audi, Bayer, BASF, BMW, Mercedes Benz, Henkel, Osram, Siemens and Volkswagen, among other major global companies of German origin, have a presence in Mexico.

”The goal now is to maintain and increase these economic exchanges. Today, Mexico offers specific opportunities in the automotive, aerospace and electronics industries as well as in strategic sectors in infrastructure, telecommunications and energy.”

Germany and Mexico have a promising future, especially because two key conditions have coincided: The first is the size, strength and dynamism of the German economy. The second is macroeconomic stability and the transformations Mexico is undergoing.

Both conditions are complemented by the upcoming update of the overall agreement with the European Union, which has the support of Germany. Together, these circumstances are creating an ideal environment to bring bilateral economic relations to unprecedented levels.

Competitive advantages of Mexico

First. Mexico is a productive platform with global reach. It has a privileged geographical location and it is a bridge between North America and Latin America and between the Atlantic and the Asia-Pacific Region. It is the fourteenth largest territory worldwide , and has great biodiversity and a growing logistics infrastructure.

Second. Mexico is a stable, reliable country, in both the institutional political sphere, and in the macroeconomic order. It is a democracy that is becoming consolidated. It has over 80 years of political stability, and constantly evolving public institutions.

Economically, there is a strong commitment to sound public finances; monetary policy is autonomous; inflation is at historically low levels, the exchange rate is flexible, and it has a robust banking system.

Third. Mexico has great human capital. It has a population of over 120 million, it has the world’s  eleventh largest population and it is also one of the youngest: half of Mexicans are 27 years old or less. In Mexico, more than 100,000 engineers and technicians graduate every year, making it possible to have qualified personnel to engage in high value-added activities.

Fourth. Mexico is an open, competitive economy and on the rise. The economy is the 15th largest worldwide. In 2015, it grew 2.5 percent, becoming the fourteenth economy that grew most among the 34 OECD countries, and is expected to grow between 2.6 and 3.6 percent  this year.

It has 11 free trade agreements offering preferential access to a potential market of more than 1.1 billion people. From 2014 to 2015, Mexico moved up two slots in the World Trade Organization’s exports ranking to become the world’s thirteenth largest exporter.

Fifth. The transformations Mexico is undergoing, as a result of the structural reforms achieved through a broad consensus between the main political forces in the country.

·        Labor Reform, which makes the job market more flexible, making it much easier for women and youth to engage in productive activities.

·        Financial reform, designed to extend credit levels in our country and make this credit cheaper, which it has already begun to achieve.

·        Telecommunications reform, which has reduced telephone charges and is driving new investments in this sector, precisely to avoid monopolistic practices and encourage greater competition within it.

·        Anti-trust Reform, which has encouraged and is designed to create a regulatory body that will be strong enough to combat monopolistic practices and open markets to new competitors.

·        Fiscal reform, which, as with any reform of this nature, is not always popular, but which is making it possible to strengthen public finances and help depetrolize the Mexican State’s income .

·        Energy Reform, which has reduced energy costs and opened up participation to the private sector throughout the value chain of hydrocarbons and in the electricity sector.

“This framework of transformations is complemented by an economic policy in favor of stability, the development of cutting-edge infrastructure and the implementation of new generation public policies, promoted by the government of my country.”