Ukraine-Mexico: prospects for cooperation

Ambassador of Mexico to Ukraine Berenice RENDON is a very open diplomat. In contrast to many other diplomats of the important countries, she can give an impromptu interview without asking for a list of questions. Besides, Ms. Rendon answers questions that concern the internal situation in her country, while other ambassadors can say that their expertise is Ukraine and that they would rather talk about it. She described in detail for The Day how reforms are implemented in Mexico, and we must keep in mind that it is the 12th economy in the world, which is a member of the G20, as well as about the prospects of cooperation between our countries. She also spoke about plans for celebrating the 203rd anniversary of Mexico’s Independence in Ukraine (interview took place last week).

I followed election in Norway, I see the tendency there that the next government would cut taxes. Your president in his first State of the Union address declared about intention to raise taxes.

“Not exactly. He has been pushing many reforms in Mexico that we need in order to make our country more productive, because we lag behind in various aspects. One of the reforms that he has proposed to the Congress, and that is going to be discussed these days, is the fiscal reform. The main background for the fiscal reform is to have the necessary resources for social programs because they have to be financed. So, there are two things that are really important. Firstly, we need to establish unemployment insurance. We are part of the Organization for Economic Cooperation and Development, and we are the only country in the OECD that does not have this type of insurance. And the second issue is pensions, especially for older people at the national level, because this has been done differently in different places or cities. So, these are two main programs that are going to be enforced, but for that you need money.

“The fiscal reform reduced some taxes that businesses had to pay before, but it increased other taxes. Everyone was expecting a new tax on medicines and food, which is not proposed, and an increase in the value-added tax. So, there are some reductions in some aspects of the fiscal system, and there is another simplification of our system, because to pay taxes is very complicated. In order to increase the taxes for financing the social programs, the idea is that the people that earn more pay more taxes.

“Another aspect is to increase the taxpayer’s base especially because we have a large amount of population in the informal sector of the economy that does not pay taxes. What the president is proposing, is the incentives for these people to register in the fiscal system and to pay taxes at a fixed rate, not too elevated.”

I asked this question because I thought there is some tendency in Latin America to socialism. Nordic countries that are more socialist now, are becoming more capitalistic. Is there any danger of Mexico becoming more socialistic?

“No, I do not think so. It depends on what you mean by socialism, but not as it is in some other countries, we have a very open economy, we are bound by our treaties and agreements with other countries, we have open free trade with more than 40 countries, mainly NAFTA, the US, Canada, which are our main trade partners, but we have treaties with the European Union, Japan, and many other countries. It would be very difficult because of our system to enter a regime like that. On the other hand, politically, we have a consolidated democratic and pluralistic system regulated by our Constitution that allows discussions and agreements among all political parties; of course if by an electoral process a left party wins the election then that party assumes the government.”

I know that the United States started talks to have transatlantic free trade agreement. Is Mexico included in this process?

“Not yet, but we are partners of the European Union, we were the first country to have an association and free trade agreements with the EU back in the 1990s. What Ukraine is negotiating right now, we had back then in the 1990s. So, we are business partners with the European Union as a whole, and with individual countries like Spain, Italy, Great Britain, France, etc. Also we have the free trade with the United States and Canada, and at some point this will complement. What Mexico is doing also is looking at other regions like Asia through the Trans Pacific Strategy and of course at Latin America where we have important Mexican investments and trade. We are always looking at different geographical directions because of our privileged location.”

So, you have no problems with choosing a direction for your country: the US, Europe, or others.

“Or Latin America. For us, Latin America is very important because we are culturally, historically linked to the region. We have borders with Central American countries, but we look to other regions of the world too. What concerns foreign policy, our president right now has this strategy of making Mexico a global actor with responsibility on the world scene. This is something that he is really emphasizing.”

What role does the richest man on the planet, Carlos Slim, play in your country? Does this super oligarch help in some way to develop Mexican economy and cut down its poverty? Or does he dictate his wish to the government?

“Of course he participates in the political life, with parties and the government. I think he is a very smart person and he has developed through his foundation a lot of social programs to help our population get education through scholarships and other issues. We have a very strong campaign to reduce poverty and hunger in Mexico, because they go hand-in-hand. President Pena Nieto is strongly pushing for the reduction of poverty in Mexico with social programs, so all the big businesses participate in this project, too.”

What about drug trade, does government succeed in fighting it?

“It has managed to detain some of its leaders and seize cargo and money in response to an increase of violence among the cartels. Now President Pena Nieto has shifted the approach, he is trying to focus more on the prevention, so people do not get into drug addiction, or people do not get into working with drug cartels, because that somehow is related to the poverty issue. If you have people that do not have jobs and opportunities in life, especially young people, for them it is sometimes easier to go the other way, because it would get them easy money.

“Ukraine could be a huge market for Mexico’s products. There are different areas that we are looking at, but especially the aerospace industry. We had a very interesting visit last year from our National Space Agency. We promoted the signing of a cooperation agreement in space issues, and that is one industry in Mexico that is really trying to get more projects with Ukraine.”

“The government is fighting the drug trafficking, but its emphasis now is mainly on prevention, creating employment, reducing poverty, increasing education and opportunities for people, especially in the rural areas, so we can have a more solid social base in the country that does not make people go to work for drug cartels or use drugs; also on the issue of money laundering.”

I have read that there are even some kind of shops for selling drugs.

“Shops? Legally, no. In Mexico, the use of drugs has not been penalized for a long time, especially marijuana, of course, other drugs are different. It does not mean that it is sold openly. Trafficking and selling drugs is penalized.”

Have you read a book by Annabel Hernandez The Drug Lords?

“No, I have not read her books, I know her, I have read her reports as a journalist. She is well-known in Mexico because of her reports in the newspapers. She usually writes for independent press. She has written many things about drug trafficking.”

She states that the war on drugs is a big lie, is that true?

“No, you cannot say that. The fight against drug trafficking is a serious one because of all negative implications for our country. But that is her job as a journalist, that is what you do: you try to investigate and get information.”

Does the journalist’s job of investigating drug trafficking become easier or does it remain as difficult and dangerous as it was?

“It is difficult and dangerous, because people involved in drug trafficking do not like investigation, they do not like people revealing information about all this issue, and it has cost the lives of many people in Mexico, journalists included. So, the government also has a commission that is trying to help investigate the crimes against journalists, so people involved are detained. And also, now we have a law on victims with the goal to help compensate for the victims of the violence. It is a difficult issue because you also need money for that. But the Congress passed that law at the end of last year. We are speaking of monetary support, because you cannot compensate for the loss of life.”

Mexico is trying to present itself as a global actor. What about a free trade agreement with Ukraine?

“Our trade turnover with Ukraine is not that big, according to the latest data for 2012 it was only 305 million dollars, so the volume of our bilateral trade is not yet substantial enough to have a free trade agreement. And especially because most of this turnover are products that we buy from Ukraine; our exports to Ukraine are very small. We will need to increase that, but of course, for a free trade agreement you need a significant volume of trade that can sustain this agreement. But we are working on it. Last year, when Kostiantyn Hryshchenko was foreign minister, he went to Mexico, it was the first time in 22 years when Ukrainian minister of foreign affairs visited our country; he signed an agreement for the fighting against tax evasion and avoidance of double taxation. So that was the first step to open up our economies, our trade, and investments, of course. We are working on the negotiations about the protection of investments agreement and other agreements on economic issues, because first we have to build the base for our bilateral economic activity, and then we can have a free trade agreement if the trade increases enough. But for now, it is not on the table yet.”

Can it happen in the near future?

“I think this will be in the long run, because as I have said, we have a low amount of trade now, around 300 million dollars. Of course, our trade has increased in the past years, it used to be less than 100 million dollars 5 years ago and the highest was in 2011 with 463 million dollars. But now with the economic crisis in the world and in Ukraine as well it has decreased to 300 million dollars. It will have to increase more for us to sign a free trade agreement. We have still few business contacts, we need to push more businessmen from Mexico to see Ukraine as a potential market, and Ukrainians to look at Mexico too. And our government is doing its job, we are working on having an Intergovernmental Commission for Trade and Investments and a Business Forum, we hope to have it here in November already. That will reactivate all contacts; we also need to balance our trade deficit with Ukraine, since we buy more Ukrainian products than sell to this country.”

Which perspectives do you see, for Ukrainians to make investments in Mexican economy, or vice versa, or some cooperation?

“I think there is a lot of potential: both countries are big, the only thing is that we are very far apart and our businessmen in general do not look at this region of the world. We are, of course, very much concentrated on the US and Canada, on Latin America, but that is why we are increasing our promotion of business issues in order to do that, because there is a lot of potential. Ukraine could be a huge market for Mexico’s products. There are different areas that we are looking at, but especially the aerospace industry. We had a very interesting visit last year from our National Space Agency. We promoted the signing of a cooperation agreement in space issues, and that is one industry in Mexico that is really trying to get more projects with Ukraine. Of course there are other windows of opportunity related to selling airplanes Antonov, we also buy turbines for hydroelectric power plants from Ukraine. Last year, the president inaugurated a big dam in Mexico, which works with machinery from Ukraine. We buy fertilizers from you. Our trade is very concentrated on Ukrainian products sold to Mexico. What we need to do also is to sell more to Ukraine.

“We already have one important business investment from Mexico, a corn processing plant in Cherkasy, which has 100 percent investments from Gruma, a Mexican global company. They have plants in different countries, they saw an opportunity in Ukraine and they are very successful here.”

How do you celebrate Mexico’s Independence Day in Ukraine?

“We celebrate Independence Day on September 16, on Monday but in Mexico we start celebrating it since the 15th at night. Our president reenacts the ceremony of el Grito de la Independencia, the ‘Call for Independence’ that was made in 1810, 203 years ago. In Ukraine, we will have various cultural activities; we started already with an exhibition of photographs at the Contemporary Art Center M17. We have a festival of authentic Mexican food with a chef brought from Mexico, and musicians from the state of Veracruz, which is a very particular kind of music in Mexico. They will perform at the festival of Mexican food at the Intercontinental Hotel from September 15 through 22. Furthermore, on September 19, they are going to have a concert in Lviv. So, these are our cultural activities for Independence Day in Ukraine. There are not many Mexicans here, but we celebrate the same, we invite Ukrainians to participate too.”

You have spent four years here. Do you see that Ukrainians’ interest in Mexican culture and language is growing?

“There is a lot of interest in Mexico. The first thing that impressed me when I arrived was that everyone knew about the soap operas of Mexico of the 1980s. Because people asked me about actors and actresses that were involved in soap operas and TV series at the time. Also, we have noticed that there is a lot of interest in our culture, especially the pre-Hispanic civilizations of Mexico: the Aztecs, the Maya, etc. and especially last year, with this issue of the end of the world and the prophecies of the Maya. In fact they believed that there is supposed to be a change of cycle for the better of humanity. That is what we want to think (laughs). That made a lot of people be interested in Mexico and its ancient civilizations. And whenever we have cultural activities, we usually have a good audience of Ukrainian people.

“The Spanish language, of course, is becoming increasingly interesting for Ukrainians. We see people that speak Spanish, we work with all the schools and universities that teach Spanish here. And also, we will have other activities, but one that has been very successful and has been growing, is the cinema clubs in Spanish, in Master Klass Center. We cooperate with the Embassies of Spain, Argentina, and Cuba to present movies in Spanish there. At the end of October and beginning of November we are going to have a Mexican cinema festival. We try to bring different aspects of Mexican culture: exhibitions, cinema, food, dance, and music. We like music a lot and we know Ukrainians like music. Sometimes theater companies come here for the GogolFest. Not this year, though.

“In general, we see interest of Ukrainians in Mexico. And of course, one thing that they are very interested in and that has grown a lot is tourism to Mexico. Ukrainians need a visa for Mexico but our government has implemented some facilitation to foster tourism through the electronic visa. When I arrived, we used to issue around 2,000 visas per year. But since 2010, we introduced an electronic visa for tourists and business persons that you can just get via Internet without coming to the Embassy. And this stimulated tourism of Ukrainians into Mexico. According to the information of our immigration institute, there were around 12,000 visitors of Ukrainian nationality to Mexico last year. So, it has increased six times. We see that Ukrainians like to travel a lot, even if it is far, it is worth it. We have many things to offer for international tourists.”

Could you name any reasons to love Ukraine?

“There are many things. Of course, in Mexico, you do not hear a lot about Ukraine, it is the same as here you do not hear much about Mexico. But whenever my family or friends come to visit from Mexico, we discover a beautiful and very interesting country. We did not know it had so many similarities with Mexico, for instance, the ancient civilization that lived here. We discovered those strong religious beliefs, your beautiful churches and temples. That is something that really impresses us. I myself like it very much also that this is a very green country. Center and north parts of Mexico have more deserted, semiarid weather, and here you see trees everywhere, very green cities. We tend to think that you have a very strong character, you are very friendly people, very open people, we discovered that and we like that. The culture is very nice; we like the food also. We share some similarities, we like music, dancing, parties. We have strong beverages – horilka and tequila. Ukrainians like tequila a lot (laughs).”

Have you tried samohon, Ukrainian home-made horilka?

“Yeah, I have tried it, but never knew the name of it. You have to be very careful with it.”

Do you subscribe to our paper? Do you read it? If so, what is your impression?

“Yes, I do read it in English. Firstly, I like that there is an English version, because even if we, foreigners, try to learn Russian or Ukrainian, it is very difficult to follow the news, because it takes time to learn the language. But it is well appreciated that we have a Ukrainian newspaper in English. I wish I could read it in Ukrainian, but it is impossible. So, it is very nice, and we were interested also in having this interview, because it goes to the Ukrainian people mostly, not so much to the international community here. Of course, we try to get to the international community, and we want to reach Ukrainian people that read your newspaper every day. So, we thank you for the interview, too.”