Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Foreign Affairs, Defence and Trade References Committee
29/10/2015
Australia's relationship with Mexico

GALINDO, Mr Ernesto, Board Member, Australia, New Zealand and Mexico Business Council

GAMAS, Dr Edmundo, Board Member, Australia, New Zealand and Mexico Business Council

MARTINEZ, Mr Hector, Board Member, Australia, New Zealand and Mexico Business Council

MATA, Mr Javier, Board Member, Australia, New Zealand and Mexico Business Council

RAMIREZ, Mr Keri, Board Member, Australia, New Zealand and Mexico Business Council

SMALLWOOD, Mr Donald, Board Member, Australia, New Zealand and Mexico Business Council

Evidence from Mr Galindo, Dr Gamas , Mr Martinez, Mr Mata and Mr Smallwood was taken via videoconference—

[11:20]

CHAIR: We welcome representatives from the Australia, New Zealand and Mexico Business Council via videoconference, and Mr Ramirez in person. Before we begin, I must advise you that, as you are providing evidence from a foreign jurisdiction, your evidence cannot be protected by parliamentary privilege. However, you are giving evidence voluntarily and you may at any time make a request to be heard in camera if you have any concerns your evidence may cause you harm. For the Hansard record, could you each please state your full name and the capacity in which you appear today.

Mr Ramirez : I am a board member of ANZMEX, Australia, New Zealand and Mexico Business Council.

Mr Smallwood : Good morning. My name is Donald Smallwood. I am Vice-President of ANZMEX. I would like to mention that I am leading this group instead of Adrienne Bonwick, who has had to travel for medical reasons somewhere, so unfortunately she cannot be here.

CHAIR: Mr Smallwood, if other people are going to make a contribution, we need them to introduce themselves and give their names for the Hansard, and then we will invite one or all of you to make an opening statement.

Mr Mata : I will start. My name is Javier Mata. I am here as Managing Director of Austeca. I am also a board member of ANZMEX, and leader of the international trade sector there.

Dr Gamas : I have already been presented. I am Edmundo Gamas.

Mr Galindo : My name is Ernesto Galindo. I am also director of the sector for culture and education for the chamber, and I am the director of Center Group, a member of the chamber.

Mr Martinez : My name is Hector Martinez. I am director for Asia and Oceania in [inaudible] Mexico, and a board member of ANZMEX.

CHAIR: Would someone like to make a brief opening statement before we go to questions?

Mr Smallwood : Let me start off by saying basically we are here as a voluntary body [inaudible] paid personnel except an administrative assistant. We enjoy what we are doing, but we do not have any vested interests commercially in this. We are looking to try and improve or escalate the strategic relationship of Mexico with Australia. The opportunities that we see in our daily business, our just daily work here—there is so much potential that has not been realised. We are looking to try and raise that awareness in a couple of areas.

First of all there are some more frequent, higher level relations at the ministerial level perhaps, and then at technocrat level, on a constant basis not just a one-off every year or so, which has been the case in the past. This also generates over time more constant interaction at the lower levels and then the commercial level. The Austrade group here, which works very hard here to try to promote Australian business in Mexico, are very underfunded in people and in terms of money, and we think they should be given the opportunity to have more presence here. There are many opportunities that they do not get to pursue or prosecute because they just do not have the time.

There are some very specific programs that we think would be interesting for starting off. One of them is something called the 'Australian week in Mexico', which would be like a roadshow in the three or four major cities of Mexico every year, where the wears of Australia and the opportunities and the potential of Australia is presented to the Mexican public as well as the Mexican business community. Those are the three basic things—more presence, more interest at an institutional level and more people in the government area. Austrade is a top [inaudible] promote and more money to be able to help fund it.

CHAIR: Excellent. As Senator Back has identified, the Mexican economy is on the march up the economic ladder, so to speak, and this committee is investigating how we can enhance, complement or win from that situation. So we are all on the same page, so to speak. Our challenge will be to get other people to follow our lead. We will work through that.

You have touched on a couple of issues. What would be the successful outcome of the establishment of an 'Australia week in Mexico'? What would you see out of that? If you had an Australia week in Mexico, you would have a greater enhancement of what is on offer in terms of the two countries?

Mr Galindo : In terms of the Australia week, it would see a business exhibit, a cultural exhibit, and also tourism to Australia.

CHAIR: But would that just identify the shortcomings, though? We have heard evidence that there are only three medical practitioners in Mexico that can deal with biometrics, and that has implications for visas. There are no direct flights between Australia and Mexico. Is that putting the cart before the horse, or do you have to do it that way?

Mr Galindo : I think we have to do it that way still. There are areas of opportunity, but at the same time I think it is really important to promote Australia and Mexico.

Mr Smallwood : For example, the flight issue—that is a commercial decision [inaudible] flights and Qantas is probably not going to be leading that in the short-term because they have the US business. So it might have to be a Mexican carrier. Creating the awareness around Australia creates more interest [inaudible] they will take a decision to actually make these flights.

CHAIR: I think Qantas does fly to Buenos Aires. They do have a direct South American flight.

Mr Galindo : Yes, but Buenos Aires is really far. It is nine hours from Mexico.

CHAIR: Okay. That is no help then.

Mr Galindo : Not really.

CHAIR: No worries.

Mr Smallwood : Most people go through Los Angeles.

CHAIR: You are obviously a professional organisation; you have obviously had these conversations with the department, Austrade and respective entities that you come into contact with. What advice do you have for the committee in terms of recommendations to enhance the case for what you are promoting?

Mr Ramirez : I can answer that one. I think the main focus that we are taking out of this collaboration—and having a strategic direction. We have seen there are efforts from different industries and different players from Australia to Mexico-US to engage and to grow the relationship, but unfortunately they are going to different places and in different directions. So, if we are going to allocate some additional resources—and that is part of what ANZMEX is doing. We are just trying to find some points where we can actually work together. I think 'Australia week'—going back to that point—is a really good addition because we will bring all the business and all the areas that are interested in Australia and in Mexico to be together. It will bring awareness of what Australia would represent for Mexico and we would be able to expand that network that already exists from a business point of view. To summarise, I think we are looking for some direction and some strategic point of view for everybody.

CHAIR: To some extent—where we have just completed the Japanese economic partnership, the Korean FTA, the China-Australia Free Trade Agreement and the trade minister is now working on India—we are a bit of an outlier when we point out that Mexico is a leading economic contender for advancement. We really do need to get your best advice on how to present this to get some attention in the right spot. Senator Back?

Senator BACK: Thank you. Mr Mata, are you the Mr Javier Mata that was involved with Fares in Western Australia?

Mr Mata : Indeed. I am—offices out of Fremantle.

Senator BACK: So the last time you and I saw each other, we were pushing sheep and cattle up the deck of the Danny F in Fremantle harbour, when your father, Captain Rodolfo Mata, was in charge of Fares Rural.

Mr Mata : That is indeed the case. That would be 1986 or 1987?

Senator BACK: 1985, 1986, 1987, 1988. I remember, Mr Mata, that I seemed to work harder than you did. I will just put that on the record. I am not sure whether your administrative duties took you into the shade on those hot sunny days or not.

Mr Mata : It is absolutely true. I do not deny it for one minute.

Senator BACK: It is great to speak to you. I just said to the secretary that we have both changed over time and I did not recognise you, but from your name you had to be that person. I think your father has passed away, but I just want to say to you what a great man he was.

Mr Mata : Thank you very much for that. I appreciate it.

Senator BACK: Gentlemen, not often does a committee of the Australian Senate receive a submission that has 39 recommendations.

CHAIR: That is usually our job.

Senator BACK: That is usually our job. But, in making that comment, can I just thank you for the degree to which you have addressed yourselves on the issues you see as important. Following on from the chairman's question, I am keen to know where you would see the benefits to Mexico and Australia and to the relationship in the event that the Trans-Pacific Partnership Agreement is ratified?

Mr Smallwood : Maybe each one of us can say something. There are specific industries where we think we could take advantage of our relationship. Mining is one of them, infrastructure and development is another, and agriculture. The whole of the northern part of Australia, especially the Queensland area, has a climate almost the same as a lot of parts of Mexico. For example, in terms of livestock, fruit and vegetable horticulture and many different areas of agriculture technology, Australia has a lot of technology that Mexico could take advantage of. Commercial trade, too, in terms of fruit and vegetables—for example, avocados. I know that is a very ticklish issue for some people because Mexico produces 35 per cent of the world's avocados and it is relatively cheap at this time, so in Australia there could possibly be some sort of trade made. These are just some examples I have. Mr Mata, I guess you have some ideas, too.

Mr Mata : I guess, to me, the issue that is very important is awareness. There is very little awareness of the business community in Australia about Mexico's potential, and vice versa. I think a lot of the problems that we have in selling the concept of Mexico as a very interesting potential market is the fact that people are just not aware of the potential that Mexico has and some of the resources that are being suggested at this table. Maybe you need to go towards making the Australian business community aware of the potential in Mexico. As an organisation that represents the value of Mexico to New Zealand and Australia, it also works the other way. We need to make people in Mexico aware of the potential of Australia as a business partner. Today, focus in Mexico is the US—80 per cent of trade in Mexico goes to the US—so there is a real interest on the part of Mexico to diversify. I think we need to concentrate on that, and to do that we just need to make people aware of the potential.

Mr Smallwood : Making people aware usually involves trips, travel and some sort of forced relationship so that people can talk about the potential. The awareness thing is probably the single biggest barrier that we have right now. Do you want to say something about the cultural education, Ernesto?

Mr Galindo : In terms of awareness, in particular, one of the things we wanted to do—and one of the recommendations made—was to fund the Australian embassy in Mexico more, so that they could run more cultural events and people could be aware of Australia. That is very important. I think we, as Mexicans, can be very ignorant about Australia. I think it is a good opportunity—if you cannot travel, for example—to be able to watch what Australia is about. That is going to be the first step in getting that awareness.

Dr Gamas : I would like to add to what my colleagues have said. I think there is vast potential in the automotive and aerospace industries, where Australian companies are already present in Mexico in large numbers. Some arrived directly and some arrived by purchasing companies in the United States with substantial Mexican operations. Other areas where I think there is definitely great scope, and which are very unexplored, are professional services of many kinds—legal, financial, engineering and especially the health sector, where Australia is also very advanced. Mexico has much to learn as it restructures its national health provision.

Mr Martinez : I am going to say something really fast. I think it is incredible that in 2004 we were talking about trade of almost $700 million, and 10 years after that we are talking about $1.5 billion. That is with a lot of challenges, as we were just discussing right now—the lack of direct flights, the distance and so on. Imagine the potential of the things we could actually do if we bring a lot more on board. I think the main challenge we have right now is a lack of information. Something like this, with the support of ANZMEX and the support of the chamber, can definitely help to bring a lot more of Australia to Mexico, and lot from Mexico to Australia.

Senator BACK: If I can go down to the specific industry for a moment—and that is with regard to agriculture—it has been put to the committee in submissions that Australia's import risk analysis process for agricultural products and time taken for consideration of market access in request for products such as your avocados, table grapes and limes is a barrier. Obviously, Mr Mata is well aware of Australia's obsession with retaining our, hopefully, clean, green image when it comes to agricultural and related pests. Does your group see the import risk analysis area as one that requires improvement?

Mr Smallwood : Absolutely. Obviously, in this type of dynamic there are vested interests at both levels, at both sides, and sometimes that has a tendency to delay things or make the process slower. The other side of it is—as Javier was mentioning earlier to us—just that it is not a priority. The priority might be China, Japan, or other countries and then Mexico becomes a lower priority, so it always goes to the bottom of the pile. To fix that usually requires these other things we were talking about, which are more interest and more champions involved in specific areas.

CHAIR: On that, is the biosecurity, say, between Mexico and the US much different to the biosecurity checks between Mexico and Australia?

Mr Mata : I think the big difference, of course, is that there is a land border between the two countries as opposed to Australia's status as an island that is able to protect its integrity a lot better than having land borders as is the case here. Often the negotiations between Australia and Mexico on biosecurity issues are very much—let's be kind about this—watched by Washington. What we do with Australia from Mexico in the specific case of my industry—so if I import livestock from Australia to Mexico—Washington will be watching and having a direct impact on the outcome of those negotiations, because the risk is somehow related to them. There is a land border. Also, the US traditionally has used Mexico as its buffer. Below Mexico, there is a lot of land and a lot of diseases, and so the US invests, in a way, in Mexico to make sure that Mexico is its filter to remain clean. I am not sure if that answers the question.

CHAIR: It is very informative, because we do see American table grapes, for example, in Australia when they are out of season. We do get fruit from California, so it is a short step to getting avocados from Mexico, I would imagine.

Mr Smallwood : Fifty per cent of the Mexican avocado industry is now exported to the US, and it took a long time. It took 90 years for the US to actually take away the barriers that they had set. We can all speculate on the reasons, but the NAFTA—the North American Free Trade Agreement—forced the issue to become more sensitive. From 1998 on, basically the Mexican avocado—but there are a lot of restrictions and there has to be a lot of auditing on these processes.

The US agricultural department has maybe 100 people working in Mexico full time making sure that all of the requirements are met, so there is obviously investment. The avocado industry can export now straight to the US, because it follows those requirements. It happens with tomatoes. There is $1.4 billion worth of avocados that are now sold to the US. Tomatoes are about the same. There is a lot of fruit—it is becoming the garden of the US to a great extent too because it is year-round production.

That leads to another point: there are a lot of agricultural industries in Australia that perhaps could even take advantage of investing in Mexico to sell to the US—a little bit like the automotive industry, which is what is happening. These companies are coming here not to sell to Mexicans but to the US and Canada.

CHAIR: That is very interesting. So it is your view that it is possible to use the Mexican marketplace to gain greater access to and penetration of the US market and other markets?

Mr Smallwood : Absolutely. I am thinking of the automotive industry, for starters.

CHAIR: Will the Trans-Pacific Partnership facilitate or enhance that opportunity?

Mr Smallwood : I do not know.

Mr Mata : I think it will enhance the possibility for certain products to be brought from Australia and processed or value-added in Mexico and exported to the US. Many countries in Europe are using Mexico as a launching pad towards the US. I think Australia and New Zealand are lagging behind a little bit on seizing that opportunity.

CHAIR: I think it is very clear in Australia that our success in Asia in trading terms, in military exchange and in political exchange has seen a successful undergraduate program where people have taken advantage of study in Australia and vice versa. What are the impediments to developing that further in Australia and Mexico's relationship?

Mr Ramirez : Mexico is an open market, but unfortunately we have in the qualifications of Mexican students. We have a year 12 at high school level that is similar to other countries in South America—for instance, Colombia. But unfortunately there has not been a formal agreement between the Australian government and the Mexican government to standardise the system. So that has been a limitation because Mexican students who want to undertake an undergraduate program here in Australia need to go through a foundation or pathway program. Because that is not the common way of going to university in Mexico, there has been some resistance to coming to Australia. Knowing there is evidence that, for instance, Australia has an agreement with the Colombian government and that they managed to standardise the system, we think that there could be a possibility to do the same. We especially need to look at the standard qualification equivalent, but we think that would be a great way to go in the market for an undergraduate level, definitely.

CHAIR: How long does something like that take to negotiate? How long did it take Colombia?

Mr Ramirez : It took a couple of months. It was mainly the Colombian government here at the embassy in Canberra talking to the department of education and just putting everything on the table. They did have a year 12 system. It was just a matter of checking what sort of units students were taking and trying to see if there was some sort of recalculation needed. As far as I know, it took a couple of months of intense discussions, but it was actually a very quick fix.

CHAIR: So it was a sort of educational and biosecurity issue, was it?

Mr Ramirez : Yes. Well, at the end of the day, I think it was more about the willingness to talk to each other and resolve the issues.

Senator BACK: I also have some questions in the education space. You have made some recommendations with regard to extending the New Colombo Plan—which is something I have been in the ear of the foreign minister about for some time—to have an education counsellor. It seems to me that there are significant opportunities for liaising between Mexican universities and Australian universities, especially in the energy space. I know a significant number of Mexican students travel to the United States and Canada each year. I think Pemex has been required to establish a Pemex university as part of the reform process. I am just wondering, apart from those points you made about having an education counsellor in the embassy in Mexico City, how can we get closer liaison between relevant Australian universities and Mexican universities?

Mr Ramirez : Following the recommendation for reform, the Mexican government has a very, very strong and interesting scholarship program. They are trying to bring up the level of professionalism for that industry. A good example in Mexico is what they did with the French and German governments. Basically the French and German governments brought in a language program for Mexican professionals who would be going to France and Germany. There are about 100 scholarships available. As a result of that, the Mexican government has full scholarships for students to do postgraduate degrees in any university that is recognised in Germany or France. A similar program could be interesting for Australia. It would bring more students here but also it would show that there is this idea of connecting with Mexico.

Senator BACK: Is language a barrier?

Mr Ramirez : In some areas of Mexico it is. That is something that has been raised by the ministry of education of the federal government in Mexico. Students who go to private universities in Mexico have no problems with language, but if students go to public universities they may have that problem. So it would be an opportunity for everybody to raise those possibilities, definitely.

Senator BACK: My last question is on visa restrictions for people coming from Mexico to Australia, whether it is for study, recreation or tourism. Are there difficulties and can we improve the speed with which visas are applied for and accepted?

Mr Ramirez : Unfortunately, recently, we have noticed there has been a big delay in the processing of visas. We used to have student visas processed between two and three weeks. Now it is taking up to seven weeks. We do not know what the problem is or what is happening behind that. We know there is an issue with the number of doctors available in the country. For a population of 100 million, we have only three registered doctors. One is not even in one of the main cities. He is in one of the small towns. That is definitely a restriction for everybody. If we could enhance that, that would be great.

Mr Smallwood : That is not only for students; it is for business people.

CHAIR: Thanks very much for your excellent submission and your contributions and appearance here today.