Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	MEXICO CITY 
Tarikh/Date 	: 	18/09/91 
Tajuk/Title  	: 	MEXICAN BUSINESSMEN 



 
    Let me say how happy I am to be in Mexico as a guest of
your Government.  This visit has given me the opportunity to
meet  with your political, business and industry leaders and
exchange views on matters of common interest.    I  wish  to
thank the organiser for the initiative to hold this function
and  to  allow  me to address this distinguished audience of
Mexican business and industry leaders who wish to expand and
develop bilateral trade and  economic  relationship  between
our two countries.
2.   As  you  know  economic relations between our two coun-
tries have always been  friendly  and  cordial.    Over  the
years,  bilateral  economic  ties have shown encouraging im-
provement.  Mexico is the third largest trading  partner  of
Malaysia  in  Latin  America  after  Argentina  and  Brazil.
Malaysia's total trade with Mexico has expanded from US$9.40
million in 1985 to US$69.70 million in 1990.  In this  trade
expansion, I am delighted to note that trade has diversified
from  primary  commodities  to include manufactured products
such as radio broadcast receivers, telecommunication  equip-
ment  and iron and steel products, a testimony to the wisdom
and practicality promoting South-South economic interaction.
3.   Malaysia has an open  economy  in  which  international
trade  has  always played an important role.  Malaysia main-
tains commercial contacts with  all  the  countries  of  the
world    and  goods as well as currency have always been al-
lowed to flow freely across its borders.   In all  these  it
has been consistent, eschewing radical switches.
4.   In 1990, Malaysia with a population of about 18 million
exported  US$29.4 billion worth of goods while total imports
amounted to US$29.3 billion.  Malaysia's trade  with  Mexico
amounting  to  US$69.7 million represents about 0.12 percent
of total trade.  Therefore there is much room  for  improve-
ment to the existing flow of trade between both countries.
5.   Accordingly,  I  have brought with me a large trade de-
legation comprising the captains of trade  and  industry  in
Malaysia to meet with their counterparts in Mexico to estab-
lish contacts and discuss serious business.
6.   The  opportunities  for  the expansion of two-way trade
and economic cooperation are immense as both  our  countries
share  the same policies to promote economic development and
achieve rapid economic growth and in this process both coun-
tries have achieved commendable success.
7.   The Malaysian economy grew at an average  rate  of  6.3
percent  per  annum  in  the  last decade.   Growth was even
faster in the past 3 years averaging about 9.0  percent  per
annum.
8.   In  our  economic development programme for this decade
the Malaysian economy is projected to grow by 7% per  annum.
Exports  is  expected to increase from US$29.4 billion today
to US$94.7 billion by the end of the  decade.    Imports  of
such  items  as machinery and transport equipment, minerals,
agricultural raw materials and intermediate products to meet
the needs of the industrial sector as well as food and  con-
sumer  goods  for the country's growing population will grow
in tandem with increasing exports.  Imports are projected to
grow from US$29.3 billion today to US$89.3  billion  by  the
year 2000.
9.   There  will therefore be a lot of opportunities for the
imports of Mexican products into Malaysia more so because of
a positive desire on the part of Malaysia to  diversify  its
sources and reduce its dependence on its traditional trading
partners.
10.  At  the same time, Mexico with its large population and
expanding economy is a country with potential for import  of
a  variety  of Malaysian goods.  The quality of our products
is high and generally meet international standards  as  well
as  being  competitively priced.  However, the Pacific Ocean
is a big expanse of water and transportation cost  will  add
to  the  prices  of  Malaysian goods.    The landed costs of
Malaysia's exports will obviously have to be competitive  to
be able to break into the Mexican market.   This is where we
need  to  look  into  making shipping less expensive through
special carriers, and regulated frequencies.  Links too will
have to be established.  Close sharing of revenue and opera-
tion will reduce initial loses.  Malaysia Airlines is a  me-
dium  size  operator  which has been consistently profitable
and believes in cooperation rather than cut-throat  competi-
tion.
11.  Mexico  is  also  an  ideal  location  for  siting  re-
distribution centres for Malaysian products to the  regional
market,  including  North and Central America.  On the other
hand, Malaysia is also ideal as a re-distribution centre for
Mexican goods to East and Southeast Asia.  Our traders  must
study this cost-cutting approach very seriously.
12.  The  manufacturing  sector in Malaysia has been identi-
fied to be the engine of growth.  It is expected to contrib-
ute 37.2% to the GDP by the year 2000 as compared  with  27%
today.
13.  In   the   development  of  the  manufacturing  sector,
Malaysia maintains an open door and a liberal policy towards
foreign investment.  Mexican investors are welcome to  avail
themselves  of the opportunities and incentives in the manu-
facturing sector.
14.  Malaysia is situated in the heart of the dynamic  Asso-
ciation  of  South  East Asia Nations (ASEAN) and East Asian
region and it certainly is an ideal location  for  off-shore
manufacturing  operations  for distribution to the local and
regional market.
15.  It is therefore important for  Mexican  businessmen  to
visit  Malaysia  and look at the opportunities that we have.
Malaysia is a warm and hospitable country and we have always
welcomed foreigners.   It would be useful  if  Mexico  could
consider  increasing  her  promotional efforts in the region
through participation in trade fairs  and  the  dispatch  of
trade  missions,  and the organisation of food, cultural and
trade promotional events in Malaysia such as a Mexican Week.
For whatever promotional work undertaken  in  Malaysia,  you
can  be  rest assured that all the cooperation required will
be given by government and the private sector to ensure  its
success.
16.  Malaysian  entrepreneurs have also developed competence
and expertise in certain sectors such as in  plantation  and
mining,  certain  sectors of the manufacturing industry par-
ticularly those involving rubber, palm oil and textile  pro-
ducts.     In  the  services  sector,  such  as  engineering
consultancy, construction and tourism,  Malaysians  will  be
looking  for  opportunities in Mexico, preferably in cooper-
ation with local entrepreneurs.
17.  Malaysia, as a trading nation, strongly supports a more
liberal international trading environment.  In this  regard,
our  commitment  is  reflected  in our efforts to liberalise
further our import regime consistent with international  re-
quirements.    Liberalisation  inter-alia  would take on the
form of tariff reduction and deregulation.
18.  Malaysia participates actively in the Uruguay Round  of
Trade  Negotiations along with like minded countries such as
Mexico.  I am happy to note that we  share  similar  percep-
tions  concerning  international  trade, namely that an open
and more liberal trading environment would be beneficial  to
growth  in  trade and would certainly benefit countries like
us.   Therefore, we share common  concern  to  expedite  the
Uruguay  Round  of  Trade  Negotiations to a successful com-
pletion.
19.  I wish to congratulate Mexico for its positive contrib-
ution to trade liberalisation by  restructuring  its  import
regime to be consistent with GATT when she joined GATT three
years  ago.  Such courageous and radical measures could only
take place when a government has a clear vision of  the  fu-
ture and confidence in the management of the economy.  It is
an example which others should follow.
20.  This  would facilitate import and would certainly bene-
fit countries such as Malaysia which has  the  products  and
the desire to expand trade with Mexico.
21.  As  trade  and  foreign  investment contribute substan-
tially to economic growth, Malaysia attaches much importance
to strengthening linkages with her trading partners  through
bilateral, regional and multilateral effort.  One major ini-
tiative is regional economic cooperation through ASEAN which
was  established in 1967.  Over the years ASEAN has achieved
strong economic growth rates and has established strong eco-
nomic linkages with countries in the East Asian crescent.
22.  In this regard we are confident that countries in  this
region are ready to strengthen regional economic cooperation
further  and  should  therefore support our proposal for the
East Asia Economic Group (EAEG).  The EAEG will be  a  loose
consultative  forum  whose main task would be to defend free
trade during international trade conferences.   It would  be
GATT  consistent.   The EAEG can also help the member states
to develop through investments and trade and  so  contribute
to regional prosperity.
23.  I  believe  Mexico  shares  the  same  sentiments.   In
Mexico's external relationship she  maintains  strong  links
with  countries  in  the  region such as the USA and Canada.
Therefore, I understand the merits of the proposal to estab-
lish the North American Free Trade Agreement to promote eco-
nomic cooperation in the North American continent.   I  hope
that  the  participating countries of NAFTA will ensure that
it is consistent with GATT and would be outward  looking  to
ensure  that  international trade will also benefit from the
Association.   While there  may  be  short-term  gains  from
closed  trading arrangements, in the long run deprivation of
markets in the rest of the world will negate early gains.
24.  In her effort to promote regional cooperation,  I  hope
therefore  that  Mexico  would approach it with a wider per-
spective in view.  New and dynamic markets are developing in
many parts of the world and they can absorb a lot of Mexican
exports to enrich Mexico.
25.  With the visit of the Malaysian delegation to Mexico  I
am  certain  that  there will be better understanding of the
opportunities available in both countries which can contrib-
ute towards further economic interaction and the enhancement
of South-South cooperation through diversification  of  mar-
kets and sources.