Sep 2007: MexicoNOW intervju med ambassadör Anna Lindstedt

1. How has the free trade agreement between Mexico and the European Union affected bilateral trade between Mexico and Sweden?

The free trade agreement (FTA) between Mexico and the European Union has created a very important legal economic framework with the aim to facilitate and intensify trade relations between Mexico and the EU Member countries, including Sweden. Mexico is - alongside with Brazil - the most important trade partner in Latin America for Sweden.

A virtual boom in bilateral trade preceded the Mexico-EU FTA somewhat with an almost 6 times increase of trade between 1995-2000. This was mainly due to a sharp increase in Swedish exports, and during 2000, the first year of the FTA coming into force, Swedish exports acceded to an all-time high of 1.34 billion USD. However, this record result is probably to be attributed to some specific, very large transactions that year, and to a lesser extent to the coming into force of the FTA. Export volumes from Sweden to Mexico have remained on average around 700-800 million USD in recent years.

Import flows from Mexico to Sweden have largely remained quite limited, but with an increase of 22% last year, the 100 million USD mark was surpassed. Sweden welcomes and encourages further increased Mexican imports as an important means to increase competition and variety of supply in our domestic markets.

Although our bilateral trade flows have developed rather modestly since the coming into force of the EU-Mexico FTA, we have seen a growing interest from Swedish companies in different fields, ranging from consumer products to advanced healthcare solutions. In the long term the free trade agreement is fundamentally important as it sets a legal and secure framework for trade and investment in the future.

2. What is the level of satisfaction of Swedish companies with their operations in Mexico?

There is generally a high level of satisfaction among Swedish companies with operations in Mexico. However, many companies seem to find administrative and bureaucratic procedures burdensome.

Around a hundred Swedish companies are present (or represented) in Mexico, including almost all major Swedish multinationals, but also several newer, small and medium sized companies. The established Swedish companies that have come and set up operations in Mexico know from their own experiences of the great business opportunities that exist here, once the threshold of the initial establishment is overcome. The telecom giant Ericsson is a great example - it has been present in Mexico since coming here in 1904.

When looking to enter the Mexican market some Swedish companies, being accustomed to rather simplified bureaucratic procedures in Sweden, find it challenging to handle all administrative requirements, for instance when it comes to registering a new business. With the assistance of our trade office, the Swedish Trade Council - whose mission here is precisely to assist Swedish companies in entering the Mexican market - the entering companies can define the right strategies to kick-start their operations in Mexico.

3. What is your outlook for Swedish trade and investment in Mexico?

International trade and investment has always been a high priority and a necessity for Sweden and its companies, not least due to the small size of the domestic market. This has turned Sweden to one of the world's most open economies with global investment and trade interests. The fast growing economies in Asia and Eastern Europe have attracted the lion share investment and trade growth in recent years, but in line with continued reform and development in Latin America, business interest in that region will probably continue to increase. Mexico is one of the economies in Latin America with the most promising outlook for trade and investment.

Many of the Swedish companies already established in Mexico have undertaken big investments, among other things in order to benefit from regional trade liberalization, especially NAFTA and the possibility to produce in Mexico for the whole North American market. Some recent examples of  successful Swedish investment in Mexico include the expansion of the paper and pulp company SCA in Mexico and the major green-field investment of the home appliances producer, Electrolux, in Ciudad Juarez. Moreover, several small and medium sized Swedish companies are establishing themselves in Mexico as well.

4. Is there any additional Swedish investment in Mexico to be expected in the near future?

Yes, there are a number of pending new investment projects.

5. Are there specific sectors targeted by Swedish companies?

The main economic activities in Mexico that receive Swedish FDI include sectors like the automotive industry, professional, technical and specialized services, ITC and telecom, retail sale of non-food consumer products and the pharmaceutical industry. We see a potential also in the oil and gas sector.  

6. In which industrial sectors will the Swedish government maintain or increase its interest?

Probably the already established sectors will remain the most important ones for a foreseeable future. However, there is increased interest in high-technology applications in areas like environment, forestation, IT& telecom, financial services, security solutions, heath care, etc, which the Swedish government welcomes.

7. Which conditions are needed in Mexico to increase Swedish investments?

There is definitely a large untapped potential for trade and investment in Mexico, of course also for Swedish companies. But to realize this potential the general politic and economic reform process and modernization needs to be continued, especially in terms of legal and personal security, increased competitiveness & market opening, the cutting of red tape and improved infrastructure, to mention some key areas. Also social development, including increased efforts to combat poverty, increase educational opportunities and continue to improve human rights conditions, are all extremely important prerequisites also for advancing the business and investment climate.

8. Any last comment for the MexicoNOW subscribers?

Firstly, on the political, macro level, I would like to again emphasize the importance of the issues brought up in connection with the previous question - continued social development, reinforcement of democracy and economic and legal reform in order to improve competitiveness, are paramount factors for Mexico to remain and advance as a major location for international trade, foreign investment and economic growth.

Secondly, I would like to use the opportunity to express the strong interest of the Embassy and our trade office, the Swedish Trade Council, in close cooperation with the Swedish-Mexican Chamber of Commerce, our Honorary Consuls, the Invest in Sweden Agency and the Swedish companies present in Mexico, to continue promoting intensified bilateral economic relations. I would like to emphasize that we wish to encourage trade and investment in both directions, both in Mexico and in Sweden.

I would like to conclude by saying despite the challenges that Mexico is facing, I am convinced that there is a great potential here, both for trade and investment, but also to develop the country further. Mexico is a great country and concluding my first year as the Ambassador of Sweden to Mexico I would like to stress that it is a privilege to represent and promote Sweden here!