We have not used all the economic potential of mutual trade
Yugoslavia and Mexico had excellent and friendly relations in the past and had been very close prior to WWI. Serbia and Mexico have continued fostering these excellent relations. We talked with the Mexican Ambassador to Serbia, H.E. Carlos Isauro Félix Corona about political, cultural and economic cooperation between the two countries.
How would you rate the Serbian-Mexican relations?
This year, we’re celebrating 75 years of uninterrupted diplomatic relations between Mexico and Serbia. This is my second time in Belgrade. I was here between 1991 to 1994, during a very complicated time, when many countries froze or broke official relations with former Yugoslavia. I was chargé d’affairs at that time because due to the sanctions against Yugoslavia, all ambassadors were ordered to leave Belgrade. I managed to convince the Mexican government not to close our embassy. I think it’s important to know that Mexico has always been a very loyal friend of the Serbian people. I had conversations with the Minister of Defense, Minister of Commerce and Telecommunication and the National Assembly. Our diplomatic contacts have always been at a high level. Although Mexico has never been a member of the Non-Aligned Movement, we had observer status. At that time, we had a very strong political dialogue.
To what extend do Serbian companies cooperate with the Mexican ones? How can we enhance this cooperation?
In terms of the economic ties, we have not fully utilized the potential that both economies have. We have the 15th largest economy in the world and we are included in more than 40 different free trade agreements. I don’t think that the real potential of the Mexican economy has been noticed here. We need to start a new stage of collaboration and expand our bilateral links. On 31st May, the Minister of Foreign Affairs of Mexico, Marcelo Ebrard had a video conference with Nikola Selaković, his Serbian counterpart, during which they validated excellent relations between our two countries and agreed to work more on the economic side of these relations.
There is a lot of potential to utilize here. We need to understand that, in this globalized 21st-century economy, it is not just the bilateral trade that we need to enhance, but it’s how you can participate in the global value chains worldwide, and how you can engage precisely in those global value chains because that’s the structure of the 21st economy. Different economic blocs have been built during the past 15-20 years that reflect precisely this global economic structure. The Serbian economy is growing. It is transitioning from a previous centrally planned economy towards a more open market economy and there is a lot of potential in that.
I had a conversation about this with your Economy Minister and we have agreed that we need to have some kind of diagnosis of the current situation in economic sectors that we need to pay attention to, to enhance not just a commercial trade but investments too. For Mexico and Mexican companies, Serbia is an important market, as a platform to expand their business in the Balkan region. We need to understand these kinds of different patterns that we have to promote with Serbian companies to get into the Mexican market which is 130 million people strong. The Mexican market is huge. Not only that, Serbian companies can utilize the benefits of the so-called new NAFTA, for example, or the Pacific region, since Mexico has concluded the Pacific Trade Agreement with 11 countries. We are also members of the Pacific Alliance that comprises the economies of Peru, Colombia, Chile and Mexico. 51% of the total Latin American exports come from these countries. So, there is a network that has a lot of potential for Serbian companies to utilize. However, to do that, we need to have a clear diagnosis of which economic subsectors we need to focus on.
NAFTA is no longer valid. Now we have the Mexico-Canada-USA Free Trade Agreement. What did this agreement change for Mexico?
First of all, I would like to mention that when we started in 1994, before NAFTA, the discussions in Mexico about this topic were very intense and very emotional in some parts, because there is a very nationalistic sentiment in Mexico. And there were voices against engaging with the US economy at all. NAFTA was the first trade agreement under which a developing country was engaging with developed economies. The arguments against were that we would be absorbed by the US and the Canadian economy, or rather we would become an economic colony of the US and Canada. But there was another argument that said that we should take advantage of being the neighbours of the most advanced economy in the world. Even though there were risks present, there were also possible gains. We took a pragmatic and modern view. NAFTA was a tremendous change for Mexico. It was the opportunity to engage not just in trade, but in developing the economy and expanding it to a more industrialized infrastructure. Now, because of NAFTA, we are, for example, the first plasma TV set producers in the world. We are also the 2nd of the 3rd biggest producers of electric appliances in the world. Our electronic and electric sectors have developed tremendously thanks to the automotive industry.
Mexico is now the No 1 producer of light trucks in the world because of NAFTA. Now, we don’t have just new plants but also a skilled workforce considering that many design centres, that design these new products, are located in Mexico. Many Mexican engineers are working in those segments. It is very interesting to see how we have evolved because Serbia also has similar free trade agreements. These kinds of experiences, how you can engage in global markets, how you can take advantage of that and not just engage in product assembly which you then export, are important. Producing more high-tech products and having more skilled human resources, that’s what generates benefits for a country.
The previous president of the United States had an idea to terminate NAFTA. He was quite serious about it as it was one of the promises he gave during his election campaign. He subsequently realized the importance of the infrastructure that we have developed, the integration of the three economies that are complementary and that NAFT comprises the largest market in the world. We represent 25% of the world economy. Mexico has become the first trade partner of the US, and the trade between the two countries is worth over $ 650 billion. So, in short, NAFTA was really a very important tool for our development. We stopped being dependent on raw materials. We are taking advantage of being given the right technology to participate in the development of new technologies.
When NAFTA was created there was no Internet. There were no cell phones and cars were still using carburettors. Hence, NAFTA needed an update to fit the new reality and the new economy. NAFTA also had a cultural impact as it allowed us to promote our culture. We have a new, updated ‘NAFTA’ now.
We are hoping that, by the year-end, we will have vaccinated between 60 and 70% of the population and hopefully, our economy will fully recover in 2022.
How is Mexico coping with the coronavirus pandemic and what are its economic consequences? How is the vaccination rollout going on?
No country was prepared for the pandemic. Mexico has a population of 130 million. It has been a huge task to keep the pandemic under control. One good thing about it was the procurement of the vaccines. Also, the impact on our healthcare system was quite big. Unfortunately, many people died and we are now aware that the only immediate solution is to have access to the vaccines. Mexico is among the 10 countries which have the best access to vaccines in the world. By early August, we have administered over 80 million doses. We are doing a very good job in terms of vaccination which is quite challenging for Mexico because the northern part of our country is a desert area, while jungles occupy most of the southern part. We are hoping that, by the year-end, we will have vaccinated between 60 and 70% of the population. We have different types of vaccines at our disposal.
In terms of tourism, Mexico was the sixth most visited tourist destination in the world before the pandemic. We had more than 40 million tourists annually. Tourism was the 3rd or the 4th income generator in our country. The pandemic has seriously affected our tourist sector. We had to provide some kind of financial aid to different sectors of the economy. We are a very diversified economy. Industrial production was also heavily hit. Many of these industrial sites in Mexico are located along the border with the US. We have also been trying to vaccinate all the workers in these industrial locations and I think that we have done a really good job in that respect.
The Mexican economy is still a developing economy. We don’t have enough resources to subsidize many other sectors. But so far, we are on the right track to economic recovery. The growth projection of the Mexican economy this year is around 5-6%. That is not so bad. I think that next year, our economy will have fully recovered from the pandemic.
What can we do to enhance the cultural cooperation between our two countries? What has been done so far in this respect?
I’m convinced that only through a much better understanding of our societies, or much better knowledge of our own cultures, we can promote many other contexts. While it’s very important not just to learn about culture, there are also cultural elements that you can use for marketing your own products. I think this is quite important. People in Mexico know a lot about the Serbian people and Serbian culture and vice versa. We have done a very good job in terms of promoting social exchange.
My mission here is to try to create and establish a very important network of cooperation among the creative people in different fields in terms of literature, architecture and music, but we also need to take advantage of new technologies, to establish connections and continue having interaction among them. I talked to the Hispanic Association regarding the literary cooperation. Also, those people in Serbia who speak Spanish, use the Mexican version of the language.
Mexico has a wonderful coastline and excellent tourist potential. Can we do something to open the Mexican tourist market further for Serbian tourists? Like abolishing visas?
We have had extensive talks with the Serbian government and this might happen soon.
By Žikica Milošević