THE Philippines and Mexico were engaged in direct commerce and trade for 250 years, which set sail half a millennium ago. But today’s generation of Mexicans are encouraging Filipinos to revive that golden age of commercial exchange.
That way, the two countries could once more herald a new dawn of Philippine-Mexican cooperation.
Mexican Ambassador to the Philippines Julio Camarena Villaseñor delivered that message to a mixed group of businessmen and investors during a two-day seminar, billed “Mexico and the Philippines: Gateways to the Americas and to Southeast Asia”, mainly “to promote reciprocal investments”.
He said that, at its height, the Manila Trade, known by its more popular name the Galleon Trade, “was the first free trade in the Americas with Asia. The exchanges tied the two countries together intimately, not only in trade, but also in culture, language, food, music and all aspects of society.”
Citizens of the 21st century may not be fully aware of the implications of the Galleon Trade 500 years ago; a brief history would greatly ease their appreciation of our role as the world’s entrepot, dealing in things that are either consumed or adorned by European royalties, and those who can afford it at the time.
In Philippine history, it said when the Spaniards came to our shores, our ancestors were already trading with China, Japan, Siam, India, Cambodia, Borneo and the Moluccas. The Spanish government continued trade relations with these countries, and the Manila became the center of commerce in the East.
“The Spaniards closed the ports of Manila to all countries except Mexico. Thus, the Manila-Acapulco Trade—better known as the Galleon Trade—was born.”
Camarena Villaseñor further explained, “The Galleon Trade was a government monopoly. Only two galleons were used: One sailed from Acapulco to Manila with some P500,000 worth of goods and spent 120 days at sea; the other sailed for 90 days from Manila to Acapulco with some P250,000 worth of goods.”
“It also allowed modern and liberal ideas to enter [the Philippines], eventually inspiring the movement for independence from Spain. And because the Spaniards were so engrossed in making profits from the Galleon Trade, they hardly had any time to further exploit our natural resources.”
It is said when one of the galleons failed to make it to Acapulco, sunk by typhoons and the vagaries of weather or bad navigation, Europe or Manila would fall into months of languorous inactivity, suddenly devoid of the exotic luxuries their people expected to indulge in.
The Galleon Trade ended in 1815, following the Mexican War of Independence and the Napoleonic Wars in Europe, which stretched Spain’s economic and military might to the limit.
Enduring trade relations
THE ambassador is upbeat, however, that although we may not replicate the length and breadth of trade relations past, the two countries could still trade and, in fact, continue to trade, until now.
“Currently, Mexico has foreign direct investments [in the Philippines] and in 2013, it had reached $6 billion,” Camarena Villaseñor noted.
He said Cemex (Cementos Mexicanos), Mexico’s cement manufacturer, was first to invest in the country in 1997, placing $3.8 billion for a new plant.
The ambassador relayed, “Just few weeks ago they launched a new initial public offering, and inaugurated a factory.”
He said Femsa (Fomento Económico Mexicano, S.A.B. de C.V.), a Mexican multinational beverage and retail company headquartered in Monterrey, invested $2 billion for new plants and various related expenses in the country.
There are several other Mexican companies in the country whose total investments amounted to about $6 billion. “Our total portfolio is getting close to $7 billion,” the envoy noted.
On the other hand, the Philippines has investments in Mexico, such as the Ayala Group, which engages in manufacturing car panels in Guadalajara; while ICTSI (International Container Terminal Services Inc.), a port-management company in the Philippines headed by Filipino tycoon Enrique Razon, had financed nearly $1 billion for a new port in Manzanillo, Veracruz.
Connections on air
AT the same time, Camarena Villaseñor told in an exclusive with the BusinessMirror that there will be flight connections between the two countries in the near future.
“We are working on an air services agreement for the Philippines and very soon, we’ll have flight connections.”
At the moment, however, he said one could fly from the Philippines to Mexico via Shanghai, by Philippine Airlines from Los Angeles, or via Sunshine Airlines from Guangzhou.
“You can take many airlines out of Mexico to Shanghai or Narita, or by way of San Francisco, Los Angeles, or Vancouver,” he added.
Camarena Villaseñor added Mexico hosted 36 million tourists in 2016. There are about 200,000 Mexicans of Filipino ancestry living in Mexico, some of whom are of mixed-blood heritages.
The Mexican envoy also invited former Ambassador Sergio Ley, an expert in Asia, to speak about his extensive knowledge in the region and about the trade relations between Mexico and the Philippines. The latter is serving as president of the Section for Asia of the Mexican Business Council For Foreign Trade, Investment and Technology.
Ley was Mexico’s former ambassador to China, Indonesia and many parts of world.
According to him, “Mexico is the ‘most ancient’ country in the Americas to have a real, [genuine] trade to the whole of Asia before any other nations in the entire continent, from Acapulco to Argentina.”
“At that time, Mexico was called ‘New Spain’, and our most important trading partner in Asia—the only trading partner—was the Philippines.”
“Manila was the main port city of all the trade coming from Asia that will go to America, and from America to Europe,” Ley added.
He said renewing old times would not be too difficult because the two countries have built a “strong base” between themselves.
The former ambassador added this is because Mexico had exported to the country $100 million, while the Philippines exported $2.3 billion.
However, he said, he is puzzled by the difference in statistical figures between Mexico and the Philippines, because it showed “we have a total trade of $800 million. Of that, Mexico sold $100 million, while the Philippines, the rest.”
“Why [is there] such a large difference in figures?” he asked.
Ley provided the answer: “This is because many of the products that we buy, we do not get directly from the Philippines.”
“It goes to a third country, that usually is the US. We buy many components for computers, for electronic gadgets and the like. Although we buy them from the US, their components were made in the Philippines.”
Ley said when those components arrive in Mexico, they compute them as being bought from the Philippines, not as imports from the US, “but for Philippine statistics, those goods were exported to the US, not to Mexico. The products end up in Mexico or somewhere else”.
“This is the reason we have large differences in our figures between the Philippines and the Mexican government.”
Food, automobile exports
BUT there are other areas, he said, where Mexico can be a real exporter to us.
One of which, Ley cited, was food. “We have developed a whole industry of very high-quality food processing, because our main client destination is the US. There, we have to compete with companies, then make better products than those being manufactured in the US.”
He said the Mexicans were able to invent a freezing process that enables them to trace a produce from the time it was harvested, who harvested it, the date it was packed, until the time the product crosses the border.
That way, if for any reason a produce—say, a tomato—causes a certain infection, they would be able to trace its origin, as well as use accompanying data to detect the source easily.
“There is no country that has a way of tracing what is going on with their food products. This is something I encourage for all those industries wanting to produce high-quality products: To have a very serious look to what Mexico is producing.”
He said another area of cooperation, which could be an enormous advantage to the Philippines, is in motoring.
Ley said Mexico manufactures very high quality cars, and over the years, has developed a very sophisticated automobile industry, “We have exported Nissan cars for the Japanese market.”
He said the car company has the same models sold in the Philippines, but are built in Japan.
“Why do that ‘triangle’ if we can export the same car directly from Mexico to the Philippines?” he queried.
Ley said they are curious as to why many of the cars made in Mexico end up in the Philippines, although initially, they were exported to Japan, allegedly for the Japanese.
He noted, however, that Japan’s cars have the steering column on the right, because they drive on the left side of the road, like the British.
The ones Mexico makes for Japan have the steering wheel on the left, for right-side driving, which he discovered, are eventually exported to Filipinos, who drive on the left side of the road, like the Americans.
“This is another area [of cooperation] as an example; it could be Nissan, or other [car brands] we now make in Mexico.”
Reviving trade
LEY said their president, Enrique Peña Nieto, visited the country three years ago and offered to talk about negotiating a free-trade agreement.
“At that time when we were negotiating the TPP (Trans-Pacific Partnership), the Mexican government officials were willing to comply with all that can be negotiated in the Philippines. We can immediately sign a free-trade agreement that will be highly beneficial for both governments.”
“There are many other areas where trade could flourish between our two countries, [which was what we had] as far back, and as much as we did, 200 to 300 years ago,” Ley concluded.
Image credits: Jimbo Albano