Welcoming Remarks C

German-Mexican Economic Relations in the light of the Mexican G20 Presidency
Mr. Wenn,

Ambassador González Díaz,

Undersecretary Torre Medina,

Governor González Zarur,

Ladies and gentlemen:

I. Introduction

German-Mexican economic relations are strong and are characterised by a lively interest in one another, by friendship and by shared values.

It does not come by surprise that the “Bilateral German-Mexican Business Summit” – put on by ProMéxico – is taking place for the second time in just a year - here in Cologne, today.

II. Facts: German-Mexican economic relations

Germany and Mexico are economically similar but also complement one another at the same time. This is why they are good partners.


 * Both Germany and Mexico are advocates of open world markets [Bilateral trade rose from $7.3bn to $17,1 bn from 2000-2011]. They are members of the WTO, OECD, NAFTA (MEX), EU (GER) and the EU-Mexico Free Trade Agreement.


 * Mexico offers easy access to the US market/NAFTA, is the largest exporter in Latin America, offers skilled workers, low taxes, has the largest network of bilateral FTAs and has a young population eager to learn and grow.


 * Germany offers a hub to the rest of Europe, is the largest exporter in the European Union, has core expertise in such areas as car manufacturing, pharmaceuticals, and chemicals, as well as electronics, renewables, energy efficiency and the aerospace industry.


 * Mexico needs to develop new markets, to diversify economic relations and to free itself from excessive dependence on exports to the U.S.


 * Germany has technology and expertise for SMEs in the field of “dual” vocational training structures that are close to the needs of businesses.


 * Germany is among the largest regional investors in Europe. Mexico is the largest regional investor in Latin America.


 * These are the perfect conditions for the mutual development of the respective markets in North and Latin America, and in West and South-Eastern Europe.


 * Mexico produces tens of thousands of highly qualified young graduates and engineers every year.


 * Germany needs skilled labour, especially in the field of engineering.


 * Mexican companies that operate in Germany benefit from the European market. An example of this is CEMEX – one of the largest construction material companies in the world.


 * German companies, in turn are making an important contribution to Mexico’s GDP through investment and by setting up places of business and creating one-hundred and twenty thousand jobs.

III. Potential for deepening bilateral relations

Despite these excellent conditions, the commercial and investment relations between our two countries have much greater potential – potential that is not yet being exploited – especially with regard to SMEs.

My Ministry has launched the “New Target Markets Initiative”. Mexico is one of the first countries to be addressed by this initiative. The initiative is aimed at intensifying economic relations with emerging countries via market development and export promotion programmes. We do this in the areas of renewable energy and energy efficiency, in electric mobility, security technology and the aerospace industry, as well as in export credit and investment guarantees, the raw materials sector, the Manager Training Programme and trade fairs exert decisive influence in the respective region.

Mexico has a large internal market, high investment potential for infrastructure and good export expansion rates with Germany [in 2010 GER exports to MEX +6.15%; MEX exports to GER +12.1%].

Mexico shows a higher level of economic and industrial complexity than its regional counterparts. Therefore the Mexican demand spectrum fits in with the German product range, for example in the automotive supply industry. Another reason why Mexico is an excellent business place for German SMEs.

We are about to launch the Manager Training Programme with Mexico, called “Fit for Partnership with Germany”. The intention is to foster favourable conditions for long lasting co-operation between Mexican and German companies, primarily SMEs. Management expertise is passed on to foreign managers interested in establishing contacts and improving their negotiation skills for the German business world. In the last fifteen years, over seven thousand managers from fourteen partner countries were part of this programme. Once a bilateral Joint Declaration is signed, we invite Mexican managers across to Germany for further training.

As you can see, our aim is not only to get Germans across to do business in Mexico, but also about attracting more Mexican investors to Germany, or as the Mexican President Calderón once put it: „¡Más mundo en México y más México en elmundo!“.

IV. Germany and Mexico as international partners

Apart from our bilateral businesses, Mexico and Germany are furthermore partners in the world. Countries like Mexico are global bridge-builders between industrial and emerging economies. They are models when it comes to shaping the global policy environment, and exert a decisive influence in the respective region.

We are deeply appreciative of the fact that under Mexican leadership, we were able to have a G20 Economy Ministerial Meeting for the first time in the history of theG20, which took place six weeks ago in Puerto Vallarta.

The Mexican presidency, under the excellent leadership of Bruno Ferrari, provided a well elaborated agenda for the discussion of the G20 Ministers.

There was broad agreement among both developing and developed countries on the need for the G20 to make a strong pledge against protectionism and to advance on the WTO/Doha multilateral negotiations. In this regard many participants observed with concern newly emerged tendencies of protectionism in Latin America.

We discussed the impact of global value chains on world trade, and the linkages between trade, growth and jobs.

The G20 trade ministers underlined that regional and global supply chains had become increasingly complex, and needed to be approached in a comprehensive manner. When a car is assembled in Mexico, around fifty different countries are involved in the supply chains for individual parts. And when one kilogram of Chilean grapes is bought in New York, around ninety percent of the price is made up of the costs of transport and logistics services.

For a long time, we have focused primarily on the export side, without really considering the benefits that imports can bring. Exports were considered as good per se and imports as something negative. This view is outdated. In order to be a successful exporter, we need to import more.

Germany’s competitive manufacturing sector is deeply integrated into global trading relations, or global value chains. This is one of the secrets behind the success of German industry. Outsourcing and offshoring have boosted its productivity and competitiveness. How and where value creation occurs, is therefore of particular relevance.

In 2011, Germany was the world’s third largest exporter and third greatest importer of goods. German imports are growing more strongly than its exports

Putting in place protectionist measures to restrict imports brings a risk of handicapping domestic firms –displacing them from the global value chains. To support functioning supply chains, it is imperative to open markets for goods and services, and to remove tariff and non-tariff trade barriers.

Our G20 Ministerial Trade Meeting was most certainly a signal to the world, that we – the G20 partners – are serious about trade, about jobs and about growth, and about our standstill commitment concerning protectionism. We now have to deliver progress to the G20Summit of Heads of States and Governments in Mexico.

V. Conclusion

Smooth cooperation between Germany and Mexico is crucial – both at the international and bilateral level, but particularly at the level of SMEs and investors. I hope that this “Bilateral Summit format” can play a lasting role as a driving force and monitor of the state of German-Mexican economic relations. We are looking forward to the next Mexican edition of the Bilateral Business Summit in León in September 2012 and hope for a successful G20 Summit under the Mexican leadership on the 18th and 19th of June in Los Cabos.

Thank you for your attention!