Singapore • B2B

As the world confronts the challenges brought about by COVID-19, Mexico and Singapore continue to forge ahead with their efforts to strengthen global cooperation in trade, investments, and R&D.

We are a Singapore government agency under the Ministry of Trade and Industry and are fully funded by the government. Our main objective is to help Singaporean companies grow by whatever means, whether in Singapore by helping entrepreneurs come up with better ideas or improving that idea and creating better capabilities for their company or in Mexico, where we help companies internationalize, forge partnerships, or find clients. In Mexico, we have been present for 20 years, opening our office in 2000, our first office in Latin America. There was a big push at the beginning to leverage on opportunities due to the signing of NAFTA. Many manufacturing companies came early on, as well as others interested in investment. Today, some manufacturing companies from Singapore continue investing in Mexico. In terms of FDI directly from Singapore, it is a sector that attracts considerable investment in Mexico, particularly in the more sophisticated value-added segments.

FRANCISCO J. RÍOS What main areas of opportunities have you identified for increased commercial trade between

Mexico is Singapore’s second-largest trading partner in Latin America, and our government and business leaders have excellent relations with one another. Notwithstanding the disruption caused by COVID-19, I see good opportunities for Singaporean and Mexican companies to continue our collaborations in infrastructure, technology and innovation, agri-food, and logistics. There is also interest among Mexican companies to invest in Asia to diversify their markets and supply chains. Singaporean companies like PlusMargin are working with Mexican partners to use AI and behavioral psychology to predict consumer behavior and enhance their online shopping experience. Mexico’s fintech law, implemented in 2018 to promote secure payments and banking processes, is also attracting Singaporean technology providers in security, mobility, and financial services. Toward this end, we support each other in keeping our economies open and inclusive, resisting negative trends toward protectionism. As the world’s response to COVID-19 has shown, countries that remain open are more resilient and better able to provide for their people’s needs.

CHEE HONG TAT

The relationship between Mexico and Singapore had long been a solid one. We are partners in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the new FTA that was signed recently by 11 countries. Beyond that, we are working with the Pacific Alliance of Chile, Peru, Colombia, and Mexico to negotiate an FTA between the Pacific Alliance and Singapore. Overall, we find the business dynamics in Southeast Asia and the 10 members of ASEAN to be similar to those in Latin America, and the solutions applied in Southeast Asia are applicable to Latin America, and vice versa. This has led us to focus heavily on innovation and technology of late. Singapore is increasingly becoming an important center of development for technology that can be applied both in Asia and Latin America. We are encouraging innovative companies with venture arms to look at Singapore as a place where they can grow their businesses in partnership with Asian companies, and looking to learn from the experience of Asia or Latin America to devise new solutions.

FJR

We have taken a multi-pronged approach to strengthening bilateral and economic ties. Singaporean Prime Minister Lee Hsien Loong made an official visit to Mexico in 2019. I have visited Mexico and met with my counterparts on several occasions over the past two years. Mexico and Singapore welcome mutually beneficial agreements that support the growth of trade and investment relations among countries. This includes FTAs, such as CPTPP, Avoidance of Double Taxation Agreements, bilateral investment treaties, and the Patent Prosecution Highway that enables accelerated filing of IP in both countries. As we confront the challenges brought about by COVID-19, it is imperative that we continue to forge ahead with our efforts to strengthen global cooperation in trade, investments and R&D. When the situation permits, I encourage Singaporean students to take up undergraduate and graduate studies, as well as internship opportunities, in Mexico and Latin America to gain exposure to an exciting and growing market. These efforts will further deepen the ties between Singaporean and Mexican universities and companies. ✖

CHT

What are some of the findings from Mexico Top Management Perspectives 2020?

Our Top Management survey in 2020 captured a little over 1,000 responses; it was prepared up until December 2019 and thus does not cover the impact of COVID-19; however, we have conducted this survey 15 years in a row so we have a large amount of data and can draw conclusions around trends. One of the key aspects of the 2020 survey was that eight out of 10 decision makers who responded were looking at a single- and double-digit growth for their companies over the next three years, an opinion that is likely to change in light of recent months’ events: oil price collapse, exchange rate volatility, and the COVID-19 economic impact. Undoubtedly, these executives recognize the great opportunity in the Mexican market for their companies to continue growing, although they also see challenges, some of which require government support including economic stability and a comprehensive action among all the different stakeholders. Mexico had been going through a change in the regime with a new federal administration. Its top concerns were maintaining macroeconomic stability, dealing with security, improving the rule of law and reducing corruption. There are still many structural issues that the Mexican business environment is keeping an eye on regarding the development of public policy and how the different stakeholders in the economy—not only the public but also the private sector—play a key role in addressing these concerns.

What are the main concerns of the business community when it comes to the tax reform?

Part of the Top Management survey showed that decision makers believe Mexico requires a comprehensive and extensive tax reform. On the one hand, there are not enough tax collections in comparison to the size of the economy, and we have the lowest tax collections within OECD countries.

However, we also have to deregulate and promote flexibility to promote investment and more international trade, which is one of the most important areas for the Mexican economy. Our respondents want a relook of the full tax system, perhaps different areas of taxing the economy. One example would be indirect taxes, which in Mexico means the VAT from sales taxes. Sales taxes are normally imposed on the sale of services and products, and, therefore, it does not matter if one is registered with the tax authorities. This is considered an efficient way of tax collection and reducing the informality in the Mexican economy. That has been raised as a possible area of opportunity for Mexico.

Which industries in Mexico will undergo the deepest transformation and in what way due to the COVID-19 pandemic?

The way we approach business travel, international travel and meetings, and many other ways of working will be challenged and changed. For example, remote working and means of communications between different teams at different locations are now becoming a reality. There is a huge opportunity at this time for decision makers to look at this more as an opportunity rather than a threat and come out stronger in terms of their business models. This should be looked at as a learning phase for them to change and push change into their organizations. I am sure there will be extensive changes. We have been looking, for instance, at the changes in the Chinese market. We had a webcast with our CEO of KPMG in China, who was explaining how after two months of a lockdown in the cities of Wuhan and Beijing, companies are starting to partially resume operations. The new businesses that are resuming operations are starting to question the old traditional models with what they have seen in the last six to 10 weeks in a remote mode with different methods and tools. ✖