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Mexico’s insecurity the biggest problem for Spanish companies

Spain’s foreign minister says country will continue to invest, despite Trump’s threats

Lack of security is the biggest stumbling block for Spanish businesses based in Mexico, according to Spain’s Minister of Foreign Affairs, Alfonso Dastis, after a meeting with 15 Spanish company directors at the Spanish Embassy in the capital, Mexico City on Friday.

Alfonso Dastis (right) with the Spanish ambassador to Mexico, Luis Fernández-Cid.
Alfonso Dastis (right) with the Spanish ambassador to Mexico, Luis Fernández-Cid.

Personal safety is an issue for anyone living in Mexico, as the murder of the niece of Ángel Villar, the President of the Spanish Football Federation illustrated last September. Now the problem of legal security is also being flagged up by a campaign to stop bribes to cut red tape.

But neither the security issue nor protectionist trade threats issued by US President Donald Trump is putting Spaniards off investing in Mexico. According to Dastis, the Spanish see Mexico as a land of opportunity. “Business is optimistic about the future and Spain’s investment will continue to pay off,” he says.

With 5,896 big companies already installed in the country – with new ones registering almost every day – Mexico is the fourth biggest destination for Spanish foreign investment, and amounts to around $57.12 billion, with the Riu Group considering four new hotels and the BBVA bank set to invest $1.5 billion in the next five years.

Almost 6,000 Spanish companies are present in Mexico

Dastis insisted that the renegotiation of the North American Free Trade Agreement (NAFTA) and the likely introduction of tariffs to Mexican imports to the US won’t directly affect Spanish businesses, which are focused predominantly on the domestic market, although he does concede that the automotive sector and the Antolín and Gescam Groups, which have six industrial plants in Mexico, might take a hit.

As the minister pointed out to company directors at the embassy, among them the heads of Gescam, Acciona, Sacyr, FCC, Abengoa, Santander, BBVA, Sabadell, Mapfre, Riu, Telefónica, Indra and Gas Natural Fenosa, at least 40% of the components of the Mexican products exported to the Untied States are made in the US. The economies of both countries are so intertwined that the NAFTA renegotiations are bound to produce a positive result since it is in in Washington’s interests to maintain good relations with its neighbor, he argued.

Dastis was in Mexico as part of a tour of Latin America. He talked to President Enrique Peña Nieto, who pledged his unequivocal support for Spain with regard to the Trump administration. Talks were also held with the Mexican Secretary of Economy, Ildefonso Guajardo, and the Secretary of Culture, María Cristina García Cepeda, as well as Foreign Minister Luis Videgaray, who is being tipped as a potential candidate to succeed Peña Nieto in the 2018 elections.

English version by Heather Galloway.

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