During a speech given at the annual “100 Leaders in the Energy Sector” in Mexico City, the current president of the Mexican Stock Exchange (BMV), Luis Tellez Kuenzler, expressed that recent Mexico oil and gas industry reforms will constitute the foundation for the country’s participation in a “third industrial revolution.”
Tellez Kunezler offered the observation that the measures taken in 2013 to open the Mexican oil and gas industry to foreign participation, particularly in the area of exploration, will set the country’s economy on a course to enhance its competitive position globally, and will also create the potential for economic growth that exceeds that resulting from the signing of the North American Free Trade Agreement (NAFTA) in 1994.
In addition to being an engine for job growth which benefits the nation’s workers, the newly opened Mexico gas and oil industry will eventully be a formidable impetus of job creation in a number of other areas of manufacturing, as well.
As energy prices in the Mexican market lower, over time, greater foreign investment and growth are expected to occur in industries that are particularly intensive in the use of energy to produce their goods.
Prior to these changes, Mexico’s principal global advantages included stable, plentiful and competively priced labor, as well as geographic proximity to the world’s largest consumer market. This is in addition to a major network of free trade agreements that give Mexican preferential tariff and duty treatment in the domestic markets of more than 40 commercial partner countries have fueled a Mexican manufacturing resurgence over the last decade. Once the effects of Mexico oil and gas reform are tangible, however, the United States’ southern neighbor will have energy pricing for industry that will enable it to add another arrow to its competitive quiver.
Kuenzler emphasized that not having concluded Mexico oil and gas reform efforts aimed at providing cheaper energy to industry at this time would have stunted the country’s ability to generate future sources of employment and increase economic the welfare of Mexican workers.
Read the primary source for this post in its original Spanish at El Economista.