MEXICO - Economy
former Lord Mayor, the City of London
Alderman and Sheriff David Wootton was educated at Bradford Grammar School and at Jesus College, Cambridge. He became a partner at Allen & Overy in 1979, specializing in corporate transactions and best-practice compliance with law and regulation in corporate governance. This involved dealing with mergers and acquisitions, IPOs, and joint ventures across various international markets. He is married to Elizabeth Wootton, and they have four children.
The UK is a very diverse place, and I don’t mean economically, but in terms of people. We are a very open and welcoming society. We have shown during the Olympics what an individual and quirky place the UK is, and that essentially it is a nice place to be in. Notwithstanding that the economics do have to make sense—and right now they do. We have a number of intelligent industries. We have very advanced financial services, data handling, and the structuring of financial products. As Lord Mayor of the City of London, I represent the world’s preeminent global financial center. I speak for financial and professional services, and for the City of London, but also for a great deal more, promoting British expertise across all business sectors and across the globe. I spend a lot of time promoting the UK’s excellent expertise in infrastructure, design engineering, project managing, construction, delivery operation and maintenance, technology, innovation, science, creative industries, and education. We are the seventh largest manufacturing country by value in the world. This has been a wonderful year to champion Britain and London. The 2012 Olympic and Paralympic Games have showcased our city as never before. I congratulate Mexico on the seven medals in the Olympics, particularly in diving and football, and on its 21 medals in the Paralympics. Competitors came to London 2012 from over 200 countries, and they came to a city where some 300 languages are spoken. For the first time in Olympic history, every competitor found their own language already spoken in an Olympic host city.
Mexico has a similar approach in many respects to the UK. Britain historically had a strong presence in Mexico: back in the 1920s most of the railways in Mexico were constructed by British engineers. Over the last 100 years we have paid too little attention to the affinities between the two countries, particularly when it comes to business. I see a number of sophisticated British manufacturers here because they can find the necessary skills and workforce, as well as an open approach and a good geographical position. Beyond just simply exporting, you do a lot better if you establish a strong presence in a target country. Trade flows back and forth at the same time. Mexican companies are attracted to the UK because of our open capital markets, which enable them to raise money more cheaply than in other locations. Plus, we are a gateway to much more open markets, particularly in the EU and further east into Asia. The UK wants to build deeper and stronger international partnerships, as this means jobs, growth, and prosperity for all. Some people talk about trade as a competition, in which one country’s success is another’s failure. But the whole point about two-way trade is that it is like baking a bigger cake; everyone will benefit from it. In particular, the UK has a need to increase its penetration into export markets, which is why we are looking more and more for opportunities in Latin America. As our Foreign Secretary William Hague stated, “Britain’s retreat from Latin America is over, and it is now time for an advance to begin. We will seek intensified and equal partnerships with countries in Latin America.” Nowhere is that more important than in our relationship with Mexico, with whom the UK shares so much. As Prime Minister David Cameron said, “We are both vibrant, free-enterprise economies, and crucially, we are free-enterprise economies that depend on trade, investment, and open markets around the world.” President Calderón has said that he wanted to see more of the world in Mexico, and Mexico in more of the world. I have been struck on my visit by the similarity of the cultural and business approach between our two countries. We are both open for business, we don’t erect barriers to other companies and business coming in, and we benefit from that experience. I recently visited Monterrey where we identified a similar approach to London, a very high proportion of services in the economy, which match the UK in high-value, high-end, high-tech manufacturing. We have a great deal in common.
We are already engaged with the president-elect and his team here in Mexico and in London. We look forward to working with our Mexican partners on trade and investment in both directions, all along the supply chain, whether that’s raising finance via the London Stock Exchange or in the whole range of world-class professional and business services that London provides. Mexican companies have already seen the benefits of what London can provide and want to see more. We had a “Mexico Day” recently, and I strongly suggest there should be more Mexico Days and further visits to London.
The City of London is with a truly global reach. We host around 300 foreign banks, more than any other country, with foreign banks managing nearly half of all assets in the UK, totaling over £8 trillion ($13 trillion) at the end of 2011. There are around 1,400 foreign-owned companies operating in the UK licensed by our financial services regulator. We continue to see around one-fifth of world cross-board bank lending done in the UK. We are the largest exporter of financial services in the world; more than double that of our next competitor. Our city continues to prove the full range of services of a global financial center. It has the world’s largest insurance market, the most comprehensive range of specialist maritime services in the world with a 20% share in maritime insurance alone, and the whole range of professional services including the major accountancy and legal firms. We recently opened the largest specialist high-tech center for the resolution of financial business and poverty disputes in the world. This is an investment in our future as a center for international law and as a center for international business, which is the largest concentration of judicial expertise on commercial matters in the world. In Tech City, near the City of London itself, we have one of the largest concentrations of small, fast-growing, digital technology companies in the EU, attracted by access to our expertise in private equity and venture capital, entrepreneurial clusters of likeminded businesses, and the close proximity to four of the world’s leading technology universities, Oxford, Cambridge, University College of London, and Imperial College of London. These same advantages and opportunities are open to Mexican companies. All in all, it is a great competitive offer, but it is an offer founded on the quality and the cluster of services and people in the City of London. The continuing uncertainty of the eurozone is not helping to create the stability, predictability, and clarity that business demands. All EU countries have a degree of exposure to the sovereign debt crisis, and the UK is of course in the EU, but not the eurozone. The city is a global financial center and is not confined by European markets. We in the City of London are wholly committed to a vibrant, single market and are wholly committed to playing a part in resolving the crisis in the eurozone. We will continue to work with our European partners to resolve the underlying structural issues, but also to find the right balance between regulation that protects consumers, investors, and markets, and regulation that stifles business and enterprise.
The relationship of Mexico and the UK is at a very good stage. There are great opportunities for partnerships, for British companies investing here, or for profitable joint ventures. Investors know that by investing in the UK, they will realize a good return in a stable and predictable environment. The UK’s stable and secure environment means that we remain resilient and offer a well full of opportunities for business. There is an expectation that where there are issues, London will sort them out, which we are doing. In India, I was told by a senior local business figure, “London is the only place I trust.” The city wants to deepen its partnership in Mexico in order to build a stronger global economy and create jobs and growth here in Mexico and in the UK. We look forward to working together to do just that.
My strong sense is that the new government will want to continue the pro-business approach and introduce reforms that will make the economy more open and receptive to foreign investment. This will project a good degree of confidence about Mexico’s image around the world; Mexico is currently understated on the world stage. In London, we would like to help Mexico project itself more accurately on to the world stage, and I think the new government will be very supportive of that.
This interview was conducted during David Wootton’s term as Lord Mayor of the City of London.
© The Business Year – November 2012
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