BEIRUT: Mexican Ambassador to Lebanon Jaime Garcia Amaral emphasized Wednesday the need to boost trade relations and investments between his country and Lebanon.
“I always hear from the business community in Mexico about reasons for not further exchanging investment and boosting trade between the two countries, but in fact I believe that these are invalid reasons,” he told The Daily Star in an exclusive interview.
Amaral said that one of the main arguments made by business people for not working on enhancing trade between the two countries was the geographical distance. “This should not be a barrier, because we have a direct maritime line from Veracruz to Beirut and it started working three years ago,” he said.
“I cannot say that transportation via this line is not expensive, but if we increase trade between the two countries then shipping costs can easily be covered,” he added.
In the first six months of 2014, the total value of imports to Lebanon from Mexico reached $33.1 million, while exports were valued at $199,000, according to statistics provided by the Chamber of Commerce, Industry and Agriculture in Lebanon.
In 2013, the value of Lebanon’s imports from Mexico amounted to $41.16 million, while exports stood at $243,000. In 2012, the figures were $42.67 million and $433,000, respectively.
“Lebanon imports from Mexico goods with an added value such as medical equipment, automobiles, motors and electronics, but it is still painful to see that the level of trade is low between the two countries,” Amaral said.
Another reason given for not increasing investment in Lebanon – also not a valid one, in Amaral’s opinion – is that Lebanon has a very small market. “The market may be small but it has a quite important level of revenues,” he said.
Amaral argued that even though the situation in the region is not that stable, it will definitely improve with time. “If you have a good vision then you can make a good business in Lebanon,” he said.
Amaral believes that the main reason for low trade is the lack of information about markets and prominent industries in the two countries.
“I am surprised to see that people engaged in the economic life in Lebanon have only limited knowledge about Mexico for instance,” he said.
“What I would like to convey to the Lebanese economic sector is that there will be new sectors to be invested in by the Lebanese business community in Mexico, such as the energy sector,” he added.
A historic constitutional energy reform was approved in Mexico in December 2013. It aims to transform the entire energy sector to compete globally, while improving the quality and price of products and services and increasing the investment and job creation.
As part of this energy reform, new legislation was enacted over a week ago by President Enrique Pe?a Nieto, who said the reform would translate into concrete benefits for small and medium enterprises.
“Mexican oil was nationalized in 1938, but the energy reform that took place lately has opened the door to the private sector to invest in this field, although it is very clear in the reform that ownership of the oil resources and production of electricity will still be in the hands of the state,” Amaral said.
“The private sector will be able to participate in international auctions, build new refineries and invest in research in different areas,” he added.
Moreover, in the past couple of years Mexico has carried out 11 structural reforms to increase productivity in all sectors and regions in addition to the energy reform, including labor reform, anti-trust and competition reform, fiscal and social security reform, financial reform and telecommunications reform.
The other reforms that took place were focused on expanding the rights of Mexican citizens and reinforcing democracy and freedoms.
An agenda for Mexico’s structural reform provided by the Mexican embassy to The Daily Star states that the 11 combined reforms could increase Mexico’s growth potential to about 5 percent of GDP or more, while boosting employment by 1 million jobs annually.