MEXICO CITY – With a weakened and less predictable global economic order likely to be the new normal, it is all the more important that businesses diversify and develop wide networks for resilience amid such uncertainty, said President Tharman Shanmugaratnam.
This is also why Singapore is building new regional arrangements for goods, technologies and investments to flow freely, he said at a Mexico-Singapore Business Forum on Dec 3, as part of his four-day state visit to Mexico.
Mr Tharman cited the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which counts among its 12 members Singapore and Mexico, and how it is exploring further cooperation with other regional networks like the European Union.
Noting that Singapore and Mexico are marking the 50th anniversary of diplomatic relations in 2025, Mr Tharman said the friendship and shared purpose between the two countries began well before formal ties.
“It indeed goes back to the Manila Galleon some five hundred years ago, the trading ships that carried silver from Mexico to Asia, and silk and spices in return,” he said at the event at JW Marriott Hotel Mexico City Polanco. “It was the first great trans-Pacific trade.”
The Spanish trade route had, from 1565 to 1815, linked the Philippines and Mexico, with trading ships making one or two round-trip voyages annually across the Pacific Ocean.
Mexican silver pieces were widely circulated across Asia in the 1800s, and used extensively in British Malaya and Singapore. It was also the currency that Sir Stamford Raffles paid the local sultan in when he first founded Singapore as a trading post in 1819, noted Mr Tharman.
In many ways, the Pacific Alliance-Singapore Free Trade Agreement, or PASFTA, will allow for a new, broader sea lane that connects Southeast Asia and Latin America more directly than ever before, he added.
The PASFTA, which links Singapore to the four-member Latin American trade bloc comprising Mexico, Chile, Colombia and Peru, was signed in 2022. The agreement has so far been ratified by Singapore, Peru and Chile, while Mexico and Columbia are working on doing so.
“The business opportunities will be significant as we connect our two regions – opportunities in food businesses, in growing new and resilient supply chains for manufacturing, in shifting to a low-carbon economy, and in embedding artificial intelligence and raising productivity in virtually every sector of the economy,” said Mr Tharman.
Singapore and Mexico are catalysts in this regard, he added, with the city-state’s companies are now exploring new business opportunities in Mexico, in sectors such as advanced manufacturing, clinical testing, ports and infrastructure, and energy.
Similarly, Mexican companies see Singapore as a rules-based, reliable base to reach the fast-growing Asean market, which has a combined GDP of US$3.6 trillion and over 650 million consumers, he added.
Mr Tharman was joined on his state visit by a business delegation led by the Singapore Business Federation and the Singapore Manufacturing Federation.
At the forum, Minister of State for Trade and Industry Alvin Tan spoke at a fireside chat moderated by non-resident fellow at the Baker Institute at Rice University in Houston Mr Raul Rodiguez.
Addressing a question on how Singapore is adapting to a changing global landscape before an audience of about 250 attendees, Mr Tan said that Singapore has become more innovative and is going beyond traditional free-trade agreements. He cited green economy agreements signed with countries like Australia, and digital economy agreements signed with countries like Chile, New Zealand and Korea.
Mexico has a unique competitive advantage as it has access to the Americas, and now also to Asia through the CPTPP. Singaporean companies in the business delegation also see Mexico’s potential, added Mr Tan.
Over the past five years, Enterprise Singapore has supported more than 60 Singapore companies in their expansion into Mexico through business missions and one-on-one engagements.
Enterprise Singapore’s executive director for Americas and Europe Clarence Hoe told The Straits Times that Mexico will be a key manufacturing and supply chain hub for North and Latin America in the short to medium term, given that manufacturing generates 90 percent of Mexico’s exports.
“Hence opportunities abound for Singapore manufacturing companies across the electronic, semiconductor, healthcare and automotive sectors, where they can access new clients demanding components, manufacturing, services and Industry 4.0 solutions,” he said.
Mr Hoe added that Mexico has a rapidly increasing consumer base and high Internet penetration rate, and Singapore technology players in e-commerce, fintech and healthtech can look to expand their footprint in the region.
One example is agrifood tech firm DiMuto, whose key markets are now Mexico and the United States.
The Singapore-headquartered company, founded in 2019, digitally tracks farm produce using blockchain technology and artificial intelligence. It aims to provide transparency in the agri-food supply chain, which still largely relies on paperwork and has fragmented documentation by different parties along the chain.
DiMuto founder Gary Loh said Mexico represents a major supply and demand centre in the global produce trade. It is also the company’s blueprint market for Latin America.
“It is large, complex, and representative of the challenges we want to solve. Growers struggle with working capital, buyers struggle with inconsistent quality, and financiers lack trusted data to underwrite risk,” said Mr Loh.
“By proving our model in Mexico, we can scale it across the region.”
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