ProMéxico Ceases Operations, Embassies Will Take Over

By the end of February, 46 ProMéxico offices around the world must cease all operations. Since 2007, this government agency was responsible for promoting trade, exports and internationalization of Mexican companies, a work that stood out by promoting the presence of dozens of Mexican companies in the most important food and beverage shows in the United States.

This decision to close ProMéxico was taken by the president of México Andrés Manuel López Obrador, who said that the embassies will now be in charge of promoting the country’s economy.

The Instituto Nacional del Emprendedor (Inadem), which was established to support entrepreneurs and micro, small and medium-sized Mexican companies, will also stop operations. The Ministry of Economy will take over the functions of that agency.

“I say it in a respectful way, there is not here in Mexico City and in the country, a ProFrancia, a ProAlemania, it is the embassies of those countries that do the promotion work; that’s why we will not have ProMéxicos in 60 cities around the world, “said President López Obrador, during the XXX Meeting of Ambassadors and Consuls.

ProMéxico funds will be used for the construction of the Mayan Train and thus better promote the country’s tourism, the President explained. The construction project consist in more than 1,500 kilometers of railroads to connect the entire Yucatán peninsula.

The Ministry of Finance and Public Credit (SHCP) had proposed to the Congress of the Union a budget of $908.8 million pesos in 2019 for ProMéxico.

The Secretary of Economy of Mexico, Graciela Márquez Colín, told the Mexican media that the Innovation and Promotion Unit will be established to replace ProMéxico and Inadem.

Márquez Colín pointed out that ProMéxico did not meet the needs of the country, because approximately eight out of 10 projects that were supported had to do only with the automotive industry and the majority was for large companies such as BMW and “could have been more effective for other chains of value”.

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ProMéxico was headed by Paulo Carreño. The agency employed about 200 workers in Mexico City and its 28 regional offices. According to its website, between 2013 and 2018 it attracted investments of $87,932 million pesos, promoted the creation of 316,067 jobs and also promoted 5,028 export projects worth $18,051 million pesos.

“The disappearance of ProMéxico is one of the major issues that is affecting the export sector and generates problems for micro, small and medium-sized companies that want to venture into the international market,” said Juan Carlos Botello Osorio , researcher at the Faculty of Commerce and International Strategy from Universidad Popular Autónoma de Puebla, according to Milenio.

The researcher believes that although the Mexican government ordered embassy personnel to be trained to advise business owners interested in exporting, as ProMéxico did, the learning curve will be slow and this will paralyze the activities of these companies outside the country.

During the XXX Annual Meeting of Ambassadors and Consuls, held in Mexico City at the beginning of January, the Ministries of Economy and Foreign Affairs signed a Collaboration Agreement transferring functions of export promotion and attraction of Foreign Direct Investment. According to El Economista, the agreement signed between the two Ministries provides a framework for action to implement a strategy for Mexico’s economic promotion worldwide, which “optimizes resources” and places as priority axes the support to Mexican companies to join the chains global value, in particular to micro, small and medium enterprises, as well as the increase of national content in exports.