The Business Year

Lilianne Ploumen

MEXICO - Diplomacy

Decisive Moves

Minister of Foreign Trade & International Development Cooperation, the Netherlands

Bio

Lilianna Ploumen studied social history and strategic marketing management and worked in marketing research and consultancy before working with Mama Cash in 1995. She coordinated fundraising for women’s initiatives, and directed the organization from 1996 to 2001. She then held leadership positions in Cortaid until 2007, when she became the Chair of the Netherland’s Labor Party. She was appointed Minister for Foreign Trade and International Development Cooperation in November 2012.

The Netherlands is one of the leading foreign investors in Mexico. What makes Mexico so attractive to European investors? Mexico’s proximity to the US, the North American Free Trade Agreement […]

The Netherlands is one of the leading foreign investors in Mexico. What makes Mexico so attractive to European investors?

Mexico’s proximity to the US, the North American Free Trade Agreement (NAFTA), and a very skilled and affordable workforce make it a competitive place for the production and assembly of many products. Mexico is a very open country with a liberal trade regime and has an extensive network of 12 FTAs with 44 countries, representing 1.2 billion people. Moreover, investments by the Netherlands in Mexico and vice versa are facilitated and protected by an agreement on promotion, encouragement, and the reciprocal protection of investments, signed in 1998.

Mexico is also a large market. The area around Mexico City alone is one of the biggest consumer areas in the world. The Mexican middle class is growing—social programs and better access to education have boosted the country’s workforce, and this makes Mexico a very attractive market for all varieties of consumer products. There are more than 1,000 companies with capital from the Netherlands in Mexico. Nearly all of the Dutch multinational companies are represented in Mexico—they have found their way there for hundreds of years—but Dutch SMEs are also now finding their way to Mexico. There is strong Mexican demand for Dutch know-how in integrated water management, nanotechnology, logistics, offshore technology, and agricultural products and services, for example. The embassy plays a crucial role in facilitating the Dutch-Mexican interaction.

How does foreign investment fit into the Netherlands’ strategy for economic recovery?

Foreign trade and investment are vital to our economy. The Netherlands has always been a trading nation eager to seize opportunities as they arise. Exports remain one of the main pillars of the economy and have grown at a rate of 3% to 6% in the last five months, despite the current economic slump. The domestic jobs generated by foreign trade are essential to our economic recovery. In today’s global economy, we see many countries that used to have less prosperous economies quickly turning into self-aware, fast-growing, trading nations. This means that to be successful, we have to look beyond nearby markets and seize opportunities in Asia, Africa, and Latin America. Naturally, it is up to our private sector to make concrete trade and investment decisions, but they can count on the government’s help if needed. Our embassies, consulates, and business support offices offer tailor-made assistance and, where the market fails, we help to provide the necessary financial resources. For example, we are setting up the Dutch Good Growth Fund. This revolving fund offers tailor-made financing to entrepreneurs with good plans for trade and investment in low- and middle-income countries. A precondition is that the activities must be socially responsible, sustainable, and relevant to development.

“Foreign trade and investment are vital to our economy.”

If new reforms are enacted, what would it mean for investments from the Netherlands?

The new Mexican government has carried out decisive education and telecommunications reform, and we are now following the process of energy reform very carefully. It is important to take action at the right moment and not lose momentum. The Netherlands has large multinational companies but also many SMEs, which are knowledgable institutions with unique expertise and know-how. For example, a delegation of senior PEMEX representatives visited the Netherlands to explore potential areas of collaboration in 2012. The conclusion was that both countries share similar challenges and there are several areas for further collaboration.

What challenges does the economic relationship between the two countries face in the coming years?

Mexico has already diversified its exports, but about 80% of them still go to the US. Mexico therefore remains very dependent on the US. President Peña Nieto has mentioned on various occasions that Mexico needs to diversify its exports. The Netherlands is an excellent partner for Mexico in meeting this challenge. As the Gateway to Europe, it offers Mexican companies the opportunity to reach 500 million consumers in Europe through the biggest port in the Western hemisphere. Out of 15 sea cables, 11 connect directly to the Netherlands. We want to see more Mexican investment in the Netherlands.

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