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Mexican officials shake off investor concern in bilateral business summit

Published 10/15/2024, 03:41 PM
Updated 10/15/2024, 05:48 PM
© Reuters. FILE PHOTO: A view of Mexico city's skyline during a sunset as cars are pictured along Reforma Avenue in Mexico City, Mexico in this picture taken through glass in a building, May 24, 2023. REUTERS/Henry Romero/File Photo
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By Cassandra Garrison

MEXICO CITY (Reuters) -Mexican officials urged safety and stability in private investment in the country on Tuesday, following a bilateral summit with business leaders in which fears about constitutional reforms dominated the agenda.

Companies such as Amazon (NASDAQ:AMZN), Mexico Pacific, Royal Caribbean (NYSE:RCL) and Woodside (OTC:WOPEY) Energy are set to make significant investments in the country in the next year, Economy Ministry Marcelo Ebrard said.

Close to 250 executives attended the summit, held annually but of particular importance this year in the first weeks of President Claudia Sheinbaum's administration.

"The messages from President Sheinbaum were certainty, assuredness," Ebrard said. "Investments in Mexico are safe. We're going to work so trade in the region keeps growing."

Last month, Mexico's Congress passed a sweeping judicial overhaul, which will put judges up for election by popular vote, arguing it will reduce corruption.

But the reform has drawn concerns from top trading partners Canada and the U.S. and risks being challenged by both countries under the trilateral USMCA trade agreement, which is up for review in 2026.

"None of these reforms are a problem for investment in Mexico," Sheinbaum said.

She added that legislation which will lay out how an energy reform will be implemented - known as a "secondary law" - will also establish a framework for investment in the sector.

Sheinbaum is readying her national energy plan to present it next year.

TOTAL INVESTMENTS

Ebrard said the total investments announced on Tuesday - many of which had already been previously confirmed by the companies themselves - topped $20 billion. That figure could come up to $30 billion if more planned investments materialized, he added.

Mexico Pacific, which is building a liquefied natural gas (LNG) export plant in the western coastal state of Sonora, will invest around $15 billion in the country in 2025, Ebrard said.

The firm had previously said the plant's construction would cost that.

Major passenger cruise line Royal Caribbean Group, meanwhile, is set to invest $1.5 billion in what Ebrard called a hub for "touristic development."

The firm said earlier this month it will develop an excursion site for day-time stops at the port of Mahahual, in southern Quintana Roo state. Local media had then pegged the investment at closer to $600 million.

Ebrard added that Amazon would invest $6 billion over the next two years to boost its network and digital capacity in Mexico. The company had previously said it would invest $5 billion in Mexico over 15 years.

© Reuters. President of the Business Coordinating Council (CCE) Francisco Alberto Cervantes Diaz, CEO of Mexico Pacific Sarah Bairstow, Mexican President Claudia Sheinbaum, Chief Executive Officer of the U.S. Chamber Suzanne P. Clark, Mexican Minister of Economy Marcelo Ebrard, Vice Chairman of the Board of Directors of Tenaris Guillermo Vogel pose for a picture during a press conference after a meeting with business people from Mexico and the United States, in Mexico City, Mexico October 15, 2024 REUTERS/Raquel Cunha

Woodside Energy, meanwhile, is weighing an investment of around $10.4 billion in a tie-up with state oil producer Pemex, Ebrard said.

Last year, Woodside forecast its share of the capital expenditure for the Trion deepwater oil project to be $4.8 billion, with Pemex covering the other $7.2 billion.

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