Following Venezuela’s withdrawal in 2006 from the G3 Free Trade Agreement, in which it participated with Mexico and Colombia, Mexican investors do not have an international instrument that provides legal certainty to their investments in the Venezuelan economy.<\/p>\n
Trade and investment flows between Mexico and Venezuela, today in the midst of political uncertainty after a questioned presidential election this weekend, have maintained a downward trend in the last decade, until they are currently marginal, according to data from the Bank of Mexico.<\/p>\n
In 2023, Mexican imports of products from Venezuela were 17 million dollars (-56% year-on-year), while exports of goods from Mexico to the Venezuelan market totaled 228 million dollars (-32% year-on-year).<\/p>\n
From another angle, Venezuela’s share of Mexico’s exports was 0.04% and the South American country’s share of Mexico’s imports was a paltry 0.003 percent.<\/p>\n
Over the past decade, the total value of bilateral trade shrank 89% from $2.243 billion (with a Mexican surplus of $2.062 billion) to just $245 million last year (with a Mexican surplus of $211 million).<\/p>\n
Overall, Venezuela’s international merchandise trade with the world has declined in recent years, to $7.5 billion in exports and $11.3 billion in imports in 2023, according to World Trade Organization (WTO) estimates.<\/p>\n
Among the Mexican products exported to Venezuela are corn; organic surface-active agents (except soap) and washing preparations; medicines; mixtures of odoriferous substances and mixtures; and petroleum oils, except crude. Venezuela exports products such as oil, shrimp, urea and aluminum to the world, some of which it shipped to Mexico in the past.<\/p>\n
Foreign Direct Investment (FDI) flows between Mexico and Venezuela also remain practically zero, with accumulated investments by Venezuelan companies in Mexico amounting to 190 million dollars and disinvestments by Mexican companies in Venezuela.<\/p>\n
In 2014, the Mexican Ministry of Foreign Affairs estimated that Mexican companies had productive investments of 1,285 million dollars in that South American country.<\/p>\n
Following Venezuela’s withdrawal in 2006 from the G3 Free Trade Agreement, in which it participated with Mexico and Colombia, Mexican investors do not have an international instrument that provides legal certainty for their investments in the Venezuelan economy.<\/p>\n
Adverse environment
\nIn this new context, in August 2008, the government of then Venezuelan President Hugo Ch\u00e1vez expropriated Cemex’s assets.<\/p>\n
\u201cThe region continues to be affected by the economic and political crisis in Venezuela, which has had a major impact on the regional economy and poses a significant economic, social and security risk,\u201d Cemex said in its 2023 report.<\/p>\n
Then, in February and March 2009, Coca-Cola FEMSA faced the takeover of several of its facilities in that country by dissatisfied workers. Currently, this company maintains operations there. But as of December 31, 2022 and 2021, the fair value of its investment in Venezuela was zero.<\/p>\n
A third case was that of Gruma, whose assets in Venezuela were forcibly acquired on May 12, 2010 by the government of that nation.<\/p>\n
Gruma held its investment in Monaca and Demaseca through two Spanish companies, Valores Mundiales and Consorcio Andino.<\/p>\n
Regarding the latter case, on July 25, 2017, a court ruled in favor of Valores Mundiales and Consorcio Andino and ordered Venezuela to pay these companies $430.4 million in damages, an amount that, updated to December 31, 2023, considering interest, amounted to $630 million.<\/p>\n
On the other hand, the Venezuelan food and beverage company Empresas Polar began commercial operations in Mexico, with the aim of producing teque\u00f1os, a typical Venezuelan snack filled with cheese.<\/p>\n
roberto.morales@eleconomista.mx<\/p>\n