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Francisco Suárez: “Canada is shooting itself in the foot”

Francisco Suárez: “Canada is shooting itself in the foot”

Posted by Juan Gavasa on November 24, 2014

The ambassador of Mexico to Canada, Francisco Suarez, gave PanamericanWorld an exclusive interview that coincided with his participation in the Toronto Global Forum celebrated in October, where he was a panelist. Suarez has a legal degree and a long history in the world of finance, politics, diplomacy, and education in his country. He has written several books and is considered an expert in economics.

In this interview he analyzes the current state of relations between Canada and Mexico, which is inevitably determined by the visa conflict. The ambassador goes straight to the point when it comes to this in saying that, “Canada is shooting itself in the foot”. However, he talks about possible solutions to the conflict. Despite the situation, macroeconomic data and trade balances show the importance of some relations that have a history of 70 years between the two countries. Suarez tries to point out the effort that has been made to change the historical imbalance there has been among the “three amigos” that make up NAFTA. He reminds us that nowadays the Mexican economy is growing three times more than its northern neighbours.

What is the current state of relations between Mexico and Canada?

When it comes to economic relations, we are doing great. We are now Canada’s top third trade partner. We have a very important tourism flow from Canada to Mexico, more than 1,800,000 visitors in the past year. There is a fact that I feel is very important; Toronto, Montreal and Vancouver, each separately send more tourists to Mexico than to Spain. We are now starting to see the same phenomenon that took place with Mexican companies entering the US market.  Bimbo paved the way when they bought Sara Lee, a very relevant brand in the American market. Now they have done the same thing with Canada Bread. This is positive news because it is very important to have commerce, investment and tourism in both countries.

We shouldn’t forget the fact that we are celebrating 70 years of diplomatic relations; 20 years since the foundation of the NAFTA and 40 years since the foundation of the Temporary Agricultural program, which is very important when it comes to labour mobility. Culturally speaking, there is an interesting Mexican presence in exhibitions, gastronomic competitions, and a a growing respect for our movies and directors like Guillermo del Toro.

Mexico’s Ambassador to Canada, and Mauricio Toussaint, Consulate General of Mexico in Toronto; and Cesar Remis, Director of Economic and Tourism at the Embassy of Mexico in Canada.

But there is still the problem of “visas”

That is right; the only problem, which is the most serious and irritating is the problem of visas. This has been causing tension in Mexico. I think Canadians are shooting themselves in the foot, as many important participants of the private sector and Canadian intelligence say. It is a shot in the foot because if there are 1,800,000 Canadian visitors traveling to Mexico every year, there could be the same amount of Mexican visitors going to Canada. However, the actual number is minimal; barely reaching 200,000 and falling because of the visa issue.

This is causing all types of concerns. I'll give you an example; a high ranked Politician in our country was going to attend a conference in Toronto, but he finally decided not to come because he feared that officials would hold his passport for two weeks; a terrible risk since he needs to travel frequently around the world. This is a very serious issue and it needs to be resolved.

As you have pointed out, there are people in the business world that have recognized that politics when it comes to visa decisions is a mistake. Is there anything being done to resolve this?

Some positive things have happened. “Canada Plus” exists and if you have the American-Canadian visa things become easier. Theoretically there is an “express visa” for tourists, students and business people. It seems like the best option but we still get a lot of complaints. Some arguments are absurd; they are worried about having a Somalian national go through Mexico and I tell them that in the last few years there haven’t been more than 500. However in Canada, there is a very big Somalian community. I think that they will soon understand that Mexico is not a terrorist or jihadist threat. We are a completely safe country. I think a possible solution could be to prepare Mexico to join other countries in the ITA system (Industry Training Authority).

Despite everything, there is data that shows a closer relationship between the two countries. A few weeks ago a report said that Mexican students preferred Canada to the US.

There is a survey from the CIDE (Centre for Economic Research and Teaching, in English), that shows that throughout the last decade the most popular country for Mexicans has been Canada, even more popular than Spain and other countries with a seemingly more similar culture. Obviously, due to the visa issue, this fact has changed and Canada is no longer in first place. But this fact is very important.

In my generation, many parents sent their kids to school in Canada because it had the advantage of English and French education without the disadvantages of American education. It is a mix; the best of the US and Europe, as well as the possibility of studying in a place like Quebec, where you have to be bilingual. This is still a popular belief among Mexicans but it might not be that way anymore if this situation continues.

The new Energy Reformation Laws approved by Peña Nieto government shows a new scenery full of possibilities for Canadian companies, many of them already established in the Mexican market. 

I have been to Calgary three times and it has been very interesting. The first time was before the reformation and I faced absolute skepticism. They told us, “It is not going to happen”. I came back a few months later when the constitutional reform had been approved but there were still doubts concerning the approval of secondary laws. “The devil is in the details, and it is not going to happen”, they told us then.

And now it has happened; everything was complete in a year. At Calgary's Energy Forum, there is always a full audience and at the embassy we have received many Canadian companies interested in our country. The big companies already knew about Mexico and had worked there or were interested in doing so. But now small and medium sized companies linked to the services field are joining in as they are attracted by the possibilities that have been presented by the energy reformation.

When will the new legal framework be launched?

In 2015. The truth is we are moving really fast. Round 1, which is mainly PEMEX and associations with PEMEX, is already in motion. Round 2, which is open to companies outside PEMEX, will start soon and some presentations will be given, including in Calgary. The business opportunities are in the Golf, in the zone of “El Perdido”, close to the US. There is also the Burgos zone, south of the Grande River, and other older sites like the Chicontepec.

Mexico is known as the “sleeping tiger” of the NAFTA

I would say jaguar or puma, and besides it has already woke up. Mexico invested very little in infrastructure; Korea invested around 10% of their GDP if we talk about public investment. Mexico has a meager 4% but we want to reach the Korean levels of investment and could reach 30% if we take private investment into account. That has to be our landscape.

I always remind people that we are part of North America, the most dynamic place in this part of the world. We are growing 2 or 3 times more than the US and Canada. The FMI data that measures GDP accurately, as “Purchasing Power Parity”, place Mexico in the eleventh spot, next to England and Indonesia. With these figures Mexico is an economy that is 20% bigger than Canada's. This is why we need to keep promoting bilateral relations with the US and Canada. We need to strengthen them and build an even stronger triangle that will be benefit from the low cost of energy compared to other parts of the world. This will make us really competitive.

I always remind people that Mexico is part of North America; we are not South America, Central America or the Caribbean. We are part of one of the most successful regions today. Europe is worth crying over, Japan is so-so and China is slowing down. However, the Pacific region of Latin America and Costa Rica are showing positive trends and they are also our natural allies. That is why we have to take advantage of the circumstances and of this huge potential.

We get the feeling that Canada doesn’t realize the economic power Mexico has.

Canadian society is very open and very closed at the same time. When it comes to certain situation as when Bimbo bought Canada Bread, the impact was similar to when they bought Sara Lee in the US. But there is a wide range of financial and business participants that know exactly how important Mexico is, especially in the energy field. In mining field, there has been many experiences, sometimes good and sometimes not so much because there have been companies that have tried to do in Mexico what they couldn’t do in Canada. But in general Canadian companies have done well in Mexico.

When it comes to agriculture there are very strong exchanges and we can already find Mexican avocados and cucumbers in Canada. The cultural industry is well connected to Guadalajara, and the health industry, to Monterrey. There are new areas that have been discovering that Mexico is more of a manufacturing country than Canada; it is not like Brazil, a generator of raw materials. Look at the example of the furniture company Palliser, whose head office is in Winnipeg. They have two plants in Saltillo and despite border and distance issues they have perfectly integrated the production of their Mexican assembly plants into their general distribution systems.

Can the Pan-American Games in Toronto be a new opportunity to strengthen ties between Canada and Mexico?

It could be, but we have to tell them to move quickly if they want to have any Mexican visitors. For that to happen, we need the visas to be easily obtainable, and the process to be smoother. We have the experience of the Guadalajara Games of 2011, which was very well organized. The Canadian delegation was there to prove it and I hope our experience becomes useful to them.

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