Viewpoint from Angela Merkel

Viewpoint : Angela Merkel

Mexico has become the 12th-largest industrial nation in the world, with, in particular, a highly innovative automotive sector. According to estimates, Mexico will produce some 4m cars in 2018, making it the seventh-largest automobile manufacturer in the world, and that production is set to rise. Let me extend my sincere congratulations to you, [President Enrique Peña Nieto], in the stead of the many people who have helped accomplish this feat, and let me congratulate you on the improved framework conditions. Mexico is a reliable investment partner, and that is largely due to the reforms that have been implemented during your time in office. German businesses are strongly engaged in Mexico, and they have accompanied its economic growth for many years. Of course, one inevitably thinks back to the legendary VW Beetle; already in the 1960s VWs rolled off the production line in Puebla.

This afternoon, you will visit the company’s headquarters in Wolfsburg. However, our economic engagement in Mexico extends far beyond German car manufacturers and automotive suppliers. German companies are also active in the mechanical engineering, chemical and pharmaceutical sectors, as well as in transport and logistics. The fact that some 2000 German companies are represented in your country, and that German investment so far totals approximately $35bn, shows how significant this cooperation is.

The primary beneficiaries of these investments are the 130,000 people who work for German companies in Mexico. However, our efforts are not all about exports and direct investment; we also want to be a country that welcomes investors with open arms. That is where free trade is put to the test. When a company is looking to enter a foreign market, it naturally says, “I want good conditions”, but is a country just as willing to welcome foreign companies at home? We are pleased that Mexican companies are also active here in Germany, for example in the automotive supply, software and ICT services industries. I want to say, however, that there is room for growth in this regard. I want to encourage Mexican companies to take a closer look at Germany as a location for investment. The Hannover Messe should serve as an example, by showing everyone that there is a lot to discover. There are, in fact, many opportunities for intensified cooperation, thanks to the advance of digital technology and Industry 4.0, especially in the sphere of energy and environmental technology. It is a good thing that our countries have already established an energy partnership, but this cooperation can be further expanded. Of course, it is easy to talk about high-tech; it is entirely different, however, to actually create and then apply high-tech solutions.

For this to happen you need, of course, well-trained and highly skilled workers. In Germany we have long had a dual system of vocational training, which we believe has proven its worth as a way to create and maintain a skilled workforce. We are very happy that Mexico has adopted many aspects of this system, though of course after adapting it to suit its own needs. I had an opportunity to gain a first-hand impression of this during my visit to Mexico. It is great to see that Mexico has such a strong interest in practice-based vocational training. We are also prepared to further engage with Mexico on this issue, and we have made this clear by signing partnership agreements. I hear that Mexico, a country with many young people, also has great demand for skilled workers that have received top-notch training. Nothing is worse for investors than not being able to find the right staff. Our focus today was mostly on robots and “cobots”, but these, too, require people with the necessary skills. We joked about the future, wondering what robots will do instead of going on holiday and what the world of tomorrow will look like. However, specialised knowledge is, and will remain, the key prerequisite for economic growth and employment.

The above viewpoint is taken from a speech delivered by Chancellor Angela Merkel at the German-Mexican Business Summit held on April 23, 2018 in Hanover.