Special Report on Mexico: Mission to build a stronger trade link with Europe: UK businesses are showing a growing interest in Mexico. Colin Harding reports

BRITAIN has had a trade surplus with Mexico since 1988, but the figures are insignificant and contribute very little to Mexico's burgeoning trade deficit, which reached dollars 4.4bn ( pounds 2.3bn) last year. Britain accounts for only 0.8 per cent of Mexico's total trade, compared with the US's 70 per cent and 4 per cent with the rest of Latin America.

One of the main reasons for President Salinas's visit, his second in three years, is to widen his options by encouraging more European trade and investment, and to scotch the idea that the North American Free Trade Agreement (Nafta) will be an exclusive, fortress- like arrangement.

There is certainly plenty of British interest in Mexico - the then Trade and Industry Secretary, Peter Lilley, went there in January at the head of a delegation of British businessmen, and Douglas Hurd, the Foreign Secretary, was there in May. A British trade mission is in Mexico now, the second this year. But President Salinas knows that foreign confidence in Mexico's future must be nurtured and developed for the trade and investment to flow.

Mexico imported dollars 274m ( pounds 144m) worth of British goods last year, and exported only dollars 147m ( pounds 77m) worth. By contrast, Mexico sells goods to the value of dollars 40bn ( pounds 21bn) to the US. Invisibles - banking, transport, insurance, financial services - are in some ways a better bet than visible trade. Many British companies have been involved in Mexico's massive privatisation programme; James Capel, the stockbroker, recently lead-managed a dollars 5m ( pounds 2.6m) offering for a Mexican tourism development company, and Commercial Union, after a 10-year absence, has taken a 40 per cent stake in la Republica insurance company. It may be 10 years before British banks are allowed to open subsidiaries in Mexico, but another promising area for invisibles development is air transport: British Airways plans to resume direct services between London and Mexico City next March, more than 10 years after they were suspended. Current plans are for a non-stop 747-400 service three times a week.

The position of British direct investments in Mexico is much stronger: they are second only to the US and just ahead of Germany. US accumulated investments in 1990 totalled dollars 20bn ( pounds 10.5bn), against dollars 1.91bn ( pounds 1bn) for Britain and dollars 1.89bn for Germany. In addition, Cadbury Schweppes recently completed the dollars 325m ( pounds 171m) acquisition of the leading Mexican soft drinks manufacturer and bottler, Aguas Minerales, which has about 70 per cent of the world's second- largest fizzy drinks market. Trafalgar House Construction has set up a 50-50 joint venture with a Mexican developer, Grupo Sitra, to participate in tourism and public works projects.

A number of other British companies are well established in Mexico, and several of them see good prospects for expansion. ICI and Unilever are looking at agri-business opportunities offered by agricultural reforms and the free trade agreement. Unilever bought out Anderson Clayton in 1986, and is well placed to develop its Mexican food-processing operations, while ICI has big pharmaceuticals and fertiliser plants. Tate & Lyle is considering a new sugar refinery, and BT owns 49 per cent of a payphone assembly plant supplying GEC-Plessey equipment to the newly-privatised telephone company, Telmex.

Start your day with The Independent, sign up for daily news emails
News
Sir David Attenborough
people
Life and Style
Young girl and bowl of cereal
food + drink
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
News
news
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Sport
football
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
i100
Life and Style
David Bowie by Duffy
fashion
Arts and Entertainment
Hell, yeah: members of the 369th Infantry arrive back in New York
booksWorld War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel
News
advertisingVideo: The company that brought you the 'Bud' 'Weis' 'Er' frogs and 'Wasssssup' ads, has something up its sleeve for Sunday's big match
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: This post arises as a result of the need to...

Tradewind Recruitment: Class Teacher Required ASAP In Uminster

£120 - £150 per annum: Tradewind Recruitment: I am recruiting on instruction o...

Ashdown Group: Head of Finance - Financial Director - London - £70,000

£70000 per annum: Ashdown Group: Head of Finance - Financial Controller - Fina...

Ashdown Group: Marketing Executive - Wimbledon, SW London

£24000 - £28000 per annum + benefits: Ashdown Group: Marketing Executive - Wim...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall