The five keys to the economic relationship between Mexico and Spain

The president of Spain, Pedro Sanchez met this Thursday at a breakfast with Mexican and Spanish businessmen, organized by the Embassy of Spain in Mexico.

he five keys to the economic relationship between Mexico and Spain
he five keys to the economic relationship between Mexico and Spain

The visit to Mexico of the president of the Spanish Government, Pedro Sánchez, seeks to reinforce the fertile economic link between both nations, forged for decades thanks to a solid bilateral relationship and the long-term projects of the companies.

Sanchez met this Thursday at a breakfast with Mexican and Spanish businessmen, organized by the Embassy of Spain in Mexico.

These are the five keys to the close commercial relationship between Mexico and Spain.

When did the economic exchange between countries begin?

Although the relationship dates back to the sixteenth century, with the arrival of the conquistador Hernán Cortés, experts identify at least three key moments in bilateral trade relations.

According to the Spanish Chamber of Commerce (Camescom) in Mexico, founded 129 years ago, at the end of the 19th century, migrants from northern Spain arrived in Mexico, who began to open their businesses that had a great impact.

During the Civil War (1936-1939) and the subsequent Franco dictatorship there was the exile of thousands of Spaniards to Mexico.

Although in the beginning academic and cultural ties were established, years later these were derived in new companies headed by migrant Spaniards.

Finally, at the end of the 20th century, coinciding with an economic boom, Spanish firms began to internationalize and, many of them chose Mexico as the gateway to Latin America.

On the Mexican side, the presence in Spain has strengthened especially in the last decade with the arrival of companies taking advantage of the economic crisis, which gave rise to "very good opportunities" for investment, according to the Economic and Commercial Office of the Embassy of Spain in Mexico.

How many companies with Spanish capital are there in Mexico?

According to official data, Mexico has 6,200 companies with Spanish capital that amount from 1999 to date about 63,000 million dollars in Direct Foreign Investment (FDI).

Mexican companies with Spanish capital generate some 300,000 direct jobs and around one million indirect jobs.

Each year between 350 and 400 companies with Spanish capital are incorporated in Mexico, according to one per day.

In which sectors do companies of Spanish origin stand out?

Important multinationals of Spanish origin from different sectors such as financial (BBVA, Santander, Sabadell), hotel (Riu, Barceló, NH), energy (Iberdrola, Gas Natural Fenosa, Acciona), infrastructure (OHL, FCC) or telecommunications (Movistar) have been in Mexico for years.

However, the sources consulted note that practically in all sectors there are companies of Spanish origin, and recently, emerging companies have proliferated.

In Spain, important companies such as Petróleos Mexicanos (Pemex), the Cemex cement consortium, the Bimbo bakery or the magnate Carlos Slim, with interests in the FCC construction company, among others, have important businesses.

What products lead the commercial exchange?

Spain sells to Mexico technological machinery, automobiles, and electronic devices, among other products, valued at around 4,500 million dollars per year.

Meanwhile, Mexico exports to Spain automobiles, optical devices, machinery, and even food, among other goods, and the trend has grown dramatically in the last ten years to add more than 4.245 million dollars per year.

Although the volume of business is substantial, it is still very small compared to the total of some 400,000 million dollars of commercial exchange in Mexico -both in imports and exports- in its vast majority to or from the United States and China.

What factors contribute to the healthy relationship?

Mexico and Spain have built bridges for centuries from a social, academic and cultural point of view.

This prolific relationship has contributed to a similar business culture, which has encouraged investment on both sides of the Atlantic. That is why most companies advocate long-term projects beyond politics.

The leftist tendency of Mexican President Andrés Manuel López Obrador and the Spanish Prime Minister, Pedro Sánchez, could further strengthen the ties between both nations, opening new doors for business.

In this sense, Lopez Obrador said that Spanish companies have the "open doors" in the country, but insisted on one of its major objectives: to respect the laws and prevent acts of corruption.