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The Duke of York delivers a speech at the Club de Industriales, Mexico
10th February, 2010

Ladies and Gentlemen

I am afraid that my local knowledge of your language is not good enough to be able to speak to you in your illustrious tongue so I am afraid you will have to put up with me in English today. It is also like being thrown to the lions up here. It was with great pride that I was told when I arrived that this was a private club and only members were allowed. And some of you will know the rules of Chatham House and I was really rather looking forward to being able to make my remarks this afternoon under those rules of a private club. It looks to me as though we are under some sort of scrutiny this afternoon so I will begin.

First of all can I just say that I am absolutely delighted to be here in Mexico making what is effectively my first official visit as the United Kingdom Special Representative for International Trade and Investment. I have been to Mexico many times in the past privately but not officially. And I am also fully aware that this is a very special year, in which Mexicans will look back, remember and celebrate two hundred years since independence. Now I said I have been here privately, so I know how Mexicans can party and so I wish you all the very best for your year of celebrations.

Britain, of course, has figured reasonably prominently in this 200 year history. And Britain was the first European nation to recognise Mexico, in 1825. And as we have heard, Pearson and Son were quite instrumental in the path of the infrastructure of this wonderful country, including being the business or the people who managed to drain this valley.

But our relationship has developed and strengthened still further during those succeeding years. Bilateral trade and investment has grown to new levels and the relationship between the United Kingdom and Mexico is probably in the best shape it has been for many years. The State Visit of President Calderón to the UK last year was a clear reflection of that. I was delighted to be able to host the President on his visit to Aberdeen to see the excellence of the UK extraction industries.

But I am here to learn about the Mexican market, to see it for myself and to disseminate that knowledge to British businesses when I return back to the United Kingdom. But whilst I understand that reflection is valid of the past 200 years and it will still be high on your agenda, I believe 2010 is not just a time for celebration and reflection but it is also an opportunity to look to the future.

I would like to see us building not only on our existing political ties, but also our trade and investment relationship. I certainly believe that there is scope so to do. Trade and investment is a key part of our relationship and through these visits that raise greater awareness of each other’s opportunities and through government promotional activities such as those that are going to be taking place in the UK and here this year, and those that we are doing here in the “THINK BRITAIN” campaign which I shall be launching at the Embassy later on today, will also to help to raise the awareness of our businessmen to the opportunities in both countries and thus I hope boost trade and investment.


Now we already have much in common: Mexico and the United Kingdom share a common view on many if not all the major issues facing the world in the 21st century: delivering sustainable, prolonged economic growth, tackling climate change, combating organised crime, poverty reduction, responding effectively to international emergencies and countering protectionism. Working together in the international arena (such as the G20 group or in the United Nations Security Council) we can also help to move international communities to reach agreements that are in the interests of us all.


Our trade flows are now worth around 4 billion dollars, more than double what they were in the year 2000. And the UK is one of Mexico’s top five investors. Before the financial crisis, bilateral trade was growing at 12% a year. And as we both emerge out of recession, now is the time to rebuild this momentum to a level whereby we fulfil the potential of our trading relationship.

However, let me just put this into sharper perspective perhaps: the UK still only makes up less than 1% of Mexico’s imports and despite Mexico being the largest trading nation in Latin America, just 0.27% of the UK’s imports come from Mexico. That has the result of ranking Mexico alongside New Zealand or Slovakia in terms of share of UK imports and it is also just 40% of what is imported from Brazil.

Is there a reason for this state of trade? I suspect this calls to mind the well known phrase to many British schoolchildren – “Could do better”.

But why is it that the trade between the UK and Mexico is so patently not fulfilling its potential when both countries are such dynamic traders? And what can we do to change this situation?

If I can begin but to suggest some ideas as to why, but are they also necessarily correct? A key reason might be that UK business has a focus on Europe and North America as traditional markets and is to some extent reluctant to look past, as we have heard, Brazil, Russia, India and China, the BRICs. Another is that I suspect UK companies are often unaware of the very substantial opportunities on offer in fast growing markets, such as Mexico, and this is partially the responsibility of our respective governments not getting the message out to our businesses of those opportunities.

Now there are as in any market some common misconceptions and one area to focus on must be to remove and clarify some of the common and false and outdated perceptions.

The Embassy tells me that if you ask some Mexican executives what they think of the United Kingdom they will give a reply along the following lines – castles, the expense of doing business, the Beatles, a service economy with little manufacturing left, the weather and cold, unfriendly people. I am afraid to say that this is not the UK that I know.

So let me try and clear up some of these. The most recent Cost of Living figures from the Economist Intelligence Unit show that the cost of living in London is actually less than that in Paris, Frankfurt or Geneva; than New York, Chicago or even Los Angeles. And of course, outside London there are regions that are even more competitive in terms of cost.

Nor is it true that we no longer manufacture anything in the United Kingdom. We do in fact produce more than two and a half times that which we made in 1950 and more in total than France. The UK is still the sixth largest manufacturer in the world. And there are for example nine major car manufacturers in the UK producing around 2 million vehicles a year in the UK; three quarters of which are for export around the world.

And by way of personal example, last week I had the opportunity to visit a company called Davy Roll in Newcastle. They make highly technical steel rollers for the steel industry around the world and I was delighted to see that some of the rollers that they produce were actually for export to Mexico.

Now whilst I can not begin to comment on the weather – I can’t claim Brighton enjoys similar temperatures to Acapulco! Except I will say that you can make use of an open car in the United Kingdom on more than 200 days a year; you might get cold – the World Bank ranks us 5th in the world in terms of its ease of doing business – and it’s the easiest in Europe. We still remain a globally focused open economy that welcomes inward investment. The City remains the best location for sourcing international finance in the world, London’s financial expertise and supporting services industry did not disappear in the economic crisis. It remains the global centre from where you can still trade with the world.

In addition, nor has the UK lost its creativity. It is something of which we are immensely proud. In our education philosophy, creativity thrives and the UK knows how to use this creativity and design to make things of global value and importance. British inventors were the brains behind the jet engine, penicillin, Iconic Architectural design as in the new Terminal at Beijing Airport, the iPod, the World Wide Web – and even American Idol!

So the UK continues to attract more investment than any other country with the exception of the United States.

Now you knew this bit was coming. If you ask British businesses what they think of Mexico executives tell me that the risks of doing business here are rather high.

Many, when asked, do not even know about the opportunities; nor that in almost all cases, that the opportunities here outweigh the risks.

The assumption is that people here are not business focused. Let me tell you that the reality is something completely different as I have seen in my brief time here and that is that Mexico has a young educated and professional workforce.

The assumption is that it is a country where the opportunity for foreign business is dominated by the United States. The reality, as I am seeing and learning is that, Mexico wants to diversify its business relationships.

The assumption is that the bureaucracy will be as complicated as in any of the BRIC countries but the opportunities less. The reality I am learning is that whilst it isn’t perfect, it is much easier to do business in Mexico than any of the BRIC countries. That is why the World Bank ranks Mexico 78 places above Brazil, 69 above Russia and 38 places above China in the Ease of Doing Business rankings.

I believe that these facts point to a market that UK business should not be shying away from. Instead we should be paying more attention to what is clearly a highly attractive market.

As we both begin to return to growth and as we see the light at the end of the tunnel after an 18 month downturn, we have an excellent opportunity to consider what and where we need to be and with whom we should be building trading relationships so that we can make the global economy fit for purpose for the 21st Century, and not to simply return to the status quo ante.

The recession has shown clearly the importance of trading with a diverse range of partners from across the world. And I believe that stronger international trade ties can help make our economies more resilient to economic cycles and better able to recover from downturns.

We also have an opportunity – some perhaps would call it a duty – to make sure that any recovery that comes is sustainable in every sense of the word. This does mean that we must not simply return to growth that depends on a high carbon economy. The long-term costs of doing so will be much higher than the short-term benefits.

There are real opportunities in the global businesses around Climate Change and please make no mistake, the UK plans to make the most of those business opportunities. We are already doing so in education, research and development of technologies that will be the front and centre of this technology in the future. We lead the world in offshore wind and wave capacity. And Mexico I understand has similar opportunities open to it and I know from my own discussions with President Calderon in Aberdeen last year that the Mexican government too is keen to take advantage of them, whilst still recovering your carbon resources. I believe we have the opportunity to work together in many of these emerging sectors.

The necessary innovation and technological advances won’t happen overnight so utilising to the fullest extent your and our existing oil and gas deposits will become increasingly important.

I believe also that there is an opportunity to introduce more reform, where this would be beneficial to the customer. Monopolies are rarely able to deliver best value and service to a customer. Competition, public private partnerships, deregulation and an efficient, effective legal framework will bring better quality services for consumers. The United Kingdom has a lot of experience in this respect and stands ready to help.

There is perhaps one opportunity that will combine to give both the United Kingdom and Mexico a lasting legacy and I think this might be in the area of education. The education market in Mexico is one I believe we should be seeking to mutually strengthen – particularly in the tertiary sector – and I am delighted to hear that our some of our top universities are coming to Mexico soon to discover more about the opportunities here. And it is only through coming here that you really, really begin to see those opportunities and realise them.

So in concluding my remarks today I have sought to be slightly provocative because I see the excellent relationship we have and am wondering why our bilateral trade is in the state that it is today. I am determined to give this trading relationship all the encouragement I can as the UK’s Special Representative for International Trade and Investment. I will return to the United Kingdom with a number of very key messages that I have learnt here and if there was one other plea that I would make to you it is that you put aside your prior misconceptions and look at us as a modern, open, free trade and dynamic economy based on tradition, experience, reputation and creativity. Our two countries have complimentary ideals and goals; both countries have to trade our way out of recession and I believe we need to work together, not only to create a sustainable low carbon, high growth global economy, but to enhance our bilateral trade as an adjunct to the greater ideal.

I am working in this visit, and will do so on my return to the UK, to encourage “More UK in Mexico” and “More Mexico in the World”. I hope that you too can and will play an active role in raising the awareness of Mexican businesses to the modern Britain and our desire to enhance the longstanding relationships we have with Mexico and across the world.

Ladies and Gentlemen. Thank you very much indeed for your attention.

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