The Free Trade Agreement between Peru and Hong Kong is a significant milestone in Peru’s efforts to strengthen its global trade connections. During APEC week, Peru signed this landmark deal to boost exports in key sectors like agriculture and mining. According to the Ministry of Foreign Trade and Tourism (Mincetur), Hong Kong is Peru’s third most important destination for non-traditional exports, valued at $266 million in 2023. This trade included blueberries, zinc, copper, avocados, and other high-value products, showcasing the diversity of Peru’s export portfolio.

Key Sectors Benefiting from the Agreement

“The Hong Kong market highly values fresh and high-quality products, such as our fruits and seafood,” said Milagros Torres, Academic Deputy Director of the Business Faculty at Zegel. “In 2023, Peruvian exports to Hong Kong grew by 1.5% compared to the previous year. With this treaty, Peruvian exporters can compete more efficiently in the market.”

The Free Trade Agreement between Peru and Hong Kong is designed to enhance trade conditions through reduced tariffs, investment promotion, and facilitation of goods and services exchange. This framework is expected to improve access to the Hong Kong market, enabling Peruvian exporters in agro-industrial and mining sectors to thrive.

Modernizing Peru’s Economy Through Imports

In addition to boosting exports, the agreement allows Peru to access capital goods and advanced technological products from Hong Kong. Peruvian imports from Hong Kong during 2023 reached $26 million, with significant growth in industrial equipment and technological devices. These imports are poised to modernize Peru’s production infrastructure, enhancing its competitiveness in global markets.

Strengthening Peru’s Position in Asian Markets

This Free Trade Agreement between Peru and Hong Kong reflects Peru’s broader commitment to trade liberalization and strengthening economic ties with Asia, a region of sustained economic dynamism. Hong Kong, often seen as a gateway to China and other Asian markets, represents a strategic partner for Peru.

Peru’s broader trade strategy also involves optimizing existing agreements, such as its FTA with China, to include provisions for e-commerce, environmental protection, and global supply chain collaboration. This comprehensive approach ensures Peru remains competitive in international markets.

Benefits for Peruvian Exporters

The agreement is expected to significantly reduce trade barriers and offer competitive advantages to Peruvian exporters targeting Hong Kong, one of Asia’s most dynamic markets. Agriculture, mining, and fisheries are among the sectors expected to see substantial benefits. Products such as avocados, blueberries, and copper, which already enjoy strong demand, will likely experience increased market penetration and revenue growth.

Encouraging Foreign Direct Investment

Another vital element of the Free Trade Agreement between Peru and Hong Kong is its potential to attract foreign direct investment (FDI). Peru aims to create an attractive environment for investors by fostering improved trade relations and reducing barriers. This inflow of FDI could catalyze growth in technology, renewable energy, and infrastructure, bolstering the country’s long-term economic development.

Economic Diversification and Competitiveness

In a competitive global economy, trade agreements like the Free Trade Agreement between Peru and Hong Kong serve as crucial tools for emerging markets. By diversifying its trade partnerships, Peru reduces its reliance on traditional markets while opening new opportunities in innovation and technology.

Perspectives for the Future

The FTA positions Peru for greater economic resilience by fostering relationships with new trading partners and reducing dependency on existing ones. It is anticipated to serve as a model for future trade deals, emphasizing quality, sustainability, and innovation as core components of Peru’s export strategy.

By aligning with global economic trends, Peru demonstrates its commitment to integrating into the global economy while maximizing the benefits of its rich resources and high-quality products. The Free Trade Agreement between Peru and Hong Kong secures access to one of Asia’s most vibrant markets and underscores the importance of international collaboration in achieving economic growth.

Conclusion

The Free Trade Agreement between Peru and Hong Kong marks a pivotal step in expanding Peru’s global trade network. With reduced tariffs, improved trade conditions, and strengthened investment ties, this agreement creates a pathway for economic diversification and sustainable development. It signifies Peru’s proactive approach to securing its place as a competitive force in the global economy while fostering innovation and modernization within its industries.

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Changes to secondary legislation resulting from the strategy and their implication for the viability of new projects are still being determined.

At the beginning of November, Mexico unveiled its Mexican National Electricity Strategy, which, while highlighting the state-run Federal Electricity Commission (CFE), assigns the private sector a share of investment in generation, including clean energy, in a 54%-46% ratio.

The projection is to generate 22,574 megawatts between 2025 and 2030, which—according to the Mexican Institute for Competitiveness (Imco)—equals 94.3% of what was approved between 2019 and 2024 but is 39.9% less than what was authorized between 2012 and 2018, due to reduced investment in recent years.

The CFE plans to invest $23.4 billion in the current administration, including $12.3 billion in generation projects (13,024 new MW), $7.5 billion in transmission, and $3.6 billion in distribution.

Under the Mexican National Electricity Strategy, the private sector may participate through three mechanisms:

• Long-term contracts that may be auctioned.
• The strategy includes a new model of mixed producers who will partner with the CFE and hold at least 54% of the investment in power plants under schemes to be auctioned.
• Energy generation and market sales

Although the projected amounts may not meet the country’s needs in this area, Imco notes that if the three mechanisms for private investor participation in electricity infrastructure development are properly implemented, they could improve Mexico’s economic competitiveness in the coming years.

Adapting and Identifying Opportunities

For Lorenzo Hernández, partner and global head of energy at Ontier Law, the Mexican National Electricity Strategy presents a mixed outlook for private investment. It offers challenges and opportunities that call for strategic reflection.

“Policy changes in the energy sector, as we saw with the 2014 reform, require significant adjustments for the private sector, which must adapt to a new regulatory framework and identify opportunities amidst change,” he said, emphasizing that Mexico has tremendous potential for energy investment due to its exceptional natural resources.

Hernández highlighted the push for storage technologies and the move toward a more robust distributed generation system as positive elements that could help energize the sector.

“In our experience, energy developments must not only comply with current regulations but also incorporate a social and environmental approach that contributes to collective well-being. Strategic lines promoted by the new policy, such as projects linked to industrial parks supporting nearshoring, administrative streamlining via a one-stop shop, and the emphasis on clean technologies, suggest a favorable framework to catalyze sustained growth in the sector,” the Ontier partner stated.

Analysts view it as positive that the private sector is being incorporated into plans for Mexico’s electricity sector after the slowdown in investment during the previous administration. However, they need to be more concerned about how private company participation will materialize, particularly regarding the Mexican National Electricity Strategy regulations.

What Concerns Have Clients Expressed About the Mexican National Electricity Strategy?

Lorenzo Hernández: Clients are well-informed and aware of the regulatory impact on their investments. They have shown equal parts interest and concern. On the one hand, there is optimism about certain aspects of the strategy and its more private investment-friendly message, particularly regarding renewable projects. On the other, there are uncertainties about the specifics of secondary legislation and its impact on the viability of new projects.

While existing projects should not face retroactive changes, self-supply projects appear set to undergo adjustments that will require detailed analysis. Additionally, clients are concerned about dispatch rules and curtailments that could affect operating projects and the suspension of certain M&A transactions pending greater regulatory clarity.

For our firm, these concerns present opportunities to innovate in legal and business strategies for our clients. We are committed to working closely with them, anticipating risks, and developing solutions that maximize the success of their projects in this evolving landscape.

The firm estimates that the Electricity Industry Law and its regulations, the Energy Transition Law, the Electricity Market Rules, the Market Surveillance Manual, the Grid Code, and other general administrative provisions are among the legislation potentially subject to modification under the strategy.

“These regulatory changes will require rigorous analysis to understand their impact on current and future projects. These reforms must be implemented transparently and coherently to foster a stable environment that supports positive development for Mexico’s energy sector,” Hernández said.

Potential Conflicts on the Horizon?

Analysts have predicted potential conflicts with investors over electricity infrastructure projects, given the state’s control of the sector.

Hernández acknowledges that the proposal to strengthen state control in the electricity sector has raised legitimate concerns among investors, particularly regarding legal certainty and adherence to the principles of free competition.

He notes that any measure limiting or discouraging private sector participation could generate tensions. However, he believes the current context cannot be analyzed in isolation, and it will be necessary to wait to implement secondary legislation. Like any strategic reform, it could face significant legal challenges if it violates constitutionally protected principles or international treaties.

The firm’s proposed response to this scenario is to encourage constructive dialogue with regulators, offering ideas and solutions that support sector growth and promote a collaborative and sustainable development environment.

Strategy and Energy Transition

The Mexican government projects in the Mexican National Electricity Strategy that by 2030, 45% of the country’s energy will come from clean sources, up from the originally proposed 40%. The goal for this year is 30% renewable energy in the national grid. The challenge is significant, given that 75% of electricity consumption currently relies on fossil fuels (gas, oil, and coal), according to Low Carbon Power data from August 2023 to July 2024.

“Energy transition is an ambitious goal that requires a balance between state and private actors,” said the Ontier partner, while noting that although the CFE will play a predominant role, controlling 54% of generation, the remaining space for private participation is still substantial and represents a platform to drive innovation and growth in the energy sector.

However, Hernández cautioned that the energy transition’s success will depend on having a sufficiently clear and attractive regulatory framework for private investors, enabling them to participate in projects that complement state efforts.

“Private companies have demonstrated their capacity to lead innovative and sustainable developments, and this potential must not be overlooked,” he concluded.

The Mexican National Electricity Strategy, unveiled in November, presents a mixed outlook for private investment in the country’s energy sector. While the strategy outlines a 54%-46% investment split between the state-run CFE and the private sector, with mechanisms like long-term contracts and mixed producer models, there are uncertainties regarding regulatory changes that could impact the viability of new projects. Experts highlight challenges and opportunities, especially with the push for renewable energy and storage technologies. Despite concerns about potential conflicts and legal uncertainties, there is optimism that private sector participation can help drive growth and innovation, particularly in clean energy. However, the success of this strategy will depend on the clarity and stability of the regulatory framework, with careful attention to the evolving legislation.

Paraguay’s industrial sector celebrates the recently finalized agreement between Mercosur and the European Union (EU), heralding it as a transformative moment for the country’s economy. This landmark deal, which still requires ratification by its member states, is seen as a “historic opportunity” to modernize Paraguay’s industries and increase its competitiveness on the global stage. However, with this opportunity comes a significant challenge: adapting to meet stringent European standards while fostering growth and sustainability through technological modernization in Paraguay.

The Paraguayan Industrial Union (UIP) released a statement on Saturday emphasizing the agreement’s far-reaching benefits. The UIP pointed to the potential for “technological modernization in Paraguay,” job creation, and access to sustainable practices. These advancements are essential to compete in international markets and position Paraguay as a regional leader in industrial development.

A Path to Modernization

Industrial leaders underscored the “transformative potential” of this agreement, describing it as a chance to unlock new opportunities for Paraguayan businesses. They called for “strategic actions to maximize its benefits,” urging collaboration among government, private industry, and international partners to drive technological modernization in Paraguay.

The challenges, however, are to be considered. Paraguay must undertake a sweeping modernization effort to compete “on equal footing” with European products. Industrialists highlighted the need for investments in infrastructure, advanced technology, and workforce training to meet “strict international standards” governing product quality, environmental sustainability, and labor practices. This aligns with Paraguay’s broader goals of technological modernization, which aim to integrate cutting-edge solutions across industries.

This is about compliance and positioning Paraguayan products as desirable and trustworthy in a highly competitive European market. The UIP believes achieving this will require robust public-private partnerships to mobilize the necessary resources and expertise, further advancing technological modernization in Paraguay.

Strategic Focus on Logistics and Trade

Another critical area of focus is logistics. Efficient supply chains and transportation networks are considered foundational to the trade agreement’s success. The UIP emphasized the importance of “efficient logistics” in facilitating exports and attracting foreign investment. This includes modernizing ports, streamlining customs processes, and improving road and rail connectivity to ensure that Paraguayan goods can reach European markets quickly and reliably. These improvements will complement efforts in technological modernization in Paraguay, creating a seamless integration of technology into logistics systems.

In a statement, industrial leaders stressed that the agreement “will provide preferential access to the European market of over 400 million consumers, eliminating trade and tariff barriers.” This preferential access represents a monumental shift for Paraguay, allowing its industries to tap into one of the world’s largest and most affluent consumer markets. The success of this access will depend heavily on the efficiency brought about by technological modernization in Paraguay.

A Long Time Coming

The conclusion of negotiations between Mercosur and the EU marks the end of a 25-year journey. Talks between the two blocs began in the late 1990s, aiming to create a free trade agreement that would benefit both regions. While a preliminary agreement was reached in 2019, progress stalled due to concerns from European partners over environmental and labor standards in South America.

The breakthrough came at the recent Mercosur summit of Heads of State held in Montevideo, Uruguay. Leaders from Brazil, Argentina, Paraguay, and Uruguay met with the President of the European Commission, Ursula von der Leyen, to finalize the agreement. The summit was particularly significant for Paraguay as negotiators worked to address the country’s specific demands. The UIP commended their efforts, celebrating the “determination” that ensured Paraguay’s interests were effectively represented in the final text, especially concerning fostering technological modernization in Paraguay. 

Opportunities and Challenges Ahead

The agreement opens a vast market of over 700 million people across both regions, reducing tariffs and trade barriers that have long limited economic exchange. The deal could be a game-changer for Paraguay, transforming its economy and strengthening its global position. However, industrialists quickly pointed out that seizing this opportunity would be challenging. The need to meet strict environmental and quality standards will demand financial investments and a cultural shift toward innovation and sustainability. These efforts are closely tied to advancing technological modernization in Paraguay.

Additionally, the deal could drive job creation in Paraguay, particularly in industries that align with European demand, such as agriculture, manufacturing, and renewable energy. However, success in these areas will depend on the ability to upskill the workforce and provide ongoing training to meet evolving market needs, further accelerating technological modernization in Paraguay.

Looking to the Future

Paraguay’s industrial sector is optimistic about the future, viewing the Mercosur-EU agreement as a pivotal moment in the country’s economic history. While the road ahead is challenging, the potential rewards are substantial. The UIP sees this as an opportunity to modernize individual industries and the country’s industrial landscape, ensuring comprehensive technological modernization in Paraguay.

“This achievement reflects the determination of our negotiators and the collective will of our industry,” the UIP stated. “With strategic actions and investments, we can ensure that Paraguay fully benefits from this historic opportunity.”

As the agreement awaits ratification by the EU Parliament, the EU Council, and the legislatures of Mercosur countries, the focus will shift to implementation. Policymakers and business leaders must now work together to lay the groundwork for success, from upgrading infrastructure to fostering innovation. These steps will undoubtedly serve as a foundation for technological modernization in Paraguay.

The UIP concluded its statement by calling on all stakeholders to recognize the significance of this moment. “This agreement is more than a trade deal; it is a chance to redefine Paraguay’s role in the global economy. Together, we can build a more prosperous and sustainable future.”

As Paraguay prepares to embrace this new era of trade, its industrial sector stands ready to meet the challenge, driven by a vision of modernization, competitiveness, and growth centered on technological modernization in Paraguay.

Introducing the 15% global minimum tax on multinationals in Panama marks a significant step in reshaping international taxation frameworks. Aimed at curbing tax avoidance by large multinational corporations, this measure applies to groups with annual consolidated revenues exceeding 750 million euros or the equivalent in U.S. dollars. While the policy reflects global efforts to create a fairer taxation system, its implementation in countries like Panama presents complex challenges, raising questions about its implications for foreign investment, local fiscal incentives, and economic competitiveness.

A Global Push for Tax Equity

The global minimum tax is part of the Organization for Economic Cooperation and Development’s (OECD) Inclusive Framework on Base Erosion and Profit Shifting (BEPS). The BEPS initiative seeks to address gaps in international tax rules that allow multinational corporations, including multinationals in Panama, to shift profits to low- or no-tax jurisdictions, often eroding countries’ tax bases where substantial economic activities occur.

The 15% minimum tax ensures that multinationals in Panama pay at least a baseline level of tax in the jurisdictions where they operate. This policy aims to dissuade companies from exploiting tax arbitrage opportunities and to create a level playing field among nations. However, implementing the tax has been fraught with challenges, especially in developing countries like Panama.

Panama’s Potential Revenue Gains

Álvaro Villegas, Vice President of the Latin American Regional Committee of the International Fiscal Association (IFA), highlighted the revenue potential of implementing the tax. Based on OECD data, Panama could collect between $209 million and $256 million annually, equivalent to up to 30% of its current income tax revenue. These additional funds could significantly bolster the country’s fiscal health, primarily as it seeks to fund public services and infrastructure projects.

“This tax represents an opportunity to improve the fiscal capacity of countries like Panama,” Villegas noted. “However, there is a delicate balance to maintain. While the tax promises increased revenue, it also risks the country’s ability to attract and retain multinationals in Panama.”

Operational Challenges in Implementation

One of Panama’s key hurdles is operationalizing the global minimum tax. Villegas emphasized that enforcing this measure requires significant technical and administrative capacity. Tax authorities must establish systems to calculate, collect, and monitor the tax effectively while ensuring multinationals’ compliance in Panama. Additionally, they need to coordinate with other jurisdictions to prevent double taxation and disputes.

Natalia Quiñones, Global Vice President of IFA, echoed these concerns, stating that implementing the tax requires overcoming various technical, operational, and political barriers. “Despite efforts to create a harmonized regime, implementation has been divergent and chaotic,” she said. Quiñones noted that the tax’s complexity and differences in national tax systems have led to uneven application worldwide.

The Role of the Qualified Domestic Minimum Tax

One potential tool to address implementation challenges is the Qualified Domestic Minimum Tax (QDMT), which allows countries to tax multinational profits domestically before other jurisdictions can claim them. Quiñones argued that this approach is crucial for Panama. “The QDMT ensures that revenues from multinational operations are captured locally, reducing the risk of losing tax revenue to other countries,” she explained.

This mechanism could help Panama retain a portion of the tax revenue generated by multinationals in Panama, even as other nations adopt similar measures. However, implementing the QDMT also requires significant legislative and administrative adjustments, which may take time to develop.

Implications for Panama’s Economic Regimes

Panama’s unique economic frameworks, such as the Multinational Headquarters (SEM) regime, free zones, and other special financial incentives, further complicate the implementation of the global minimum tax. These regimes have traditionally attracted multinationals in Panama by offering favorable tax rates and streamlined regulatory environments. Introducing a minimum tax rate could undermine these incentives, potentially deterring investment.

José Luis Galíndez, President of the Panamanian Chapter of IFA, noted that tax authorities still debate the implications of adopting the global minimum tax. “Panama must carefully evaluate how this measure will affect its ability to attract FDI. If the country does not implement the tax, it risks losing revenue to other jurisdictions. But if it does, it could jeopardize its economic regimes’ attractiveness to Panama multinationals,” he said.

Balancing Tax Equity and Economic Competitiveness

Panama’s challenge lies in promoting tax equity and maintaining its economic competitiveness. Villegas stressed that countries in the region must transition toward fiscal incentives that encourage substantial economic activities, such as employment generation and sustainable development, rather than relying solely on low tax rates.

Quiñones added that aligning with global tax standards does not necessarily mean abandoning economic incentives. Instead, countries like Panama could reform their incentive structures to focus on fostering innovation, technological advancement, and green investments. “The global minimum tax offers an opportunity for countries to rethink their economic models and adopt more sustainable approaches to development,” she said.

Regional Dynamics and Competitive Pressures

Panama is not the only country in Latin America grappling with the challenges of the global minimum tax. Neighboring countries also evaluate their options, creating a competitive environment where jurisdictions vie for multinational investment. If Panama delays implementing the tax, it risks being perceived as a less attractive destination for multinationals in Panama concerned about compliance with global tax rules. Conversely, swift implementation could place Panama ahead of the curve, signaling its commitment to transparency and fairness.

The Path Forward

To navigate these challenges, Panama must engage in a comprehensive dialogue with stakeholders, including tax experts, multinationals in Panama, and international organizations. This dialogue should aim to identify practical solutions for implementing the tax while preserving the country’s economic competitiveness. It should also focus on building the technical capacity of tax authorities and ensuring that the tax system is transparent and predictable.

Additionally, Panama could leverage the global minimum tax to strengthen its fiscal position and invest in areas that enhance its long-term competitiveness, such as education, infrastructure, and sustainable development initiatives. By adopting a strategic approach, Panama can position itself as a leader in implementing global tax reforms while reaping the benefits of increased revenue and enhanced economic resilience.

Conclusion

The 15% global minimum tax represents a significant shift in international tax policy, with far-reaching implications for countries like Panama. While the tax offers the potential for substantial revenue gains, it also presents operational and strategic challenges that must be carefully addressed. By balancing the need for tax equity with the imperative to attract and retain multinationals in Panama, the country can navigate this complex landscape and emerge as a key player in the evolving global tax framework.

Strategic Position and Economic Growth

Cartagena is home to Latin America’s most potent petrochemical cluster, serving as a key driver of business competitiveness and a benchmark in exports. The city has consolidated itself as one of Colombia’s most promising industrial cities, standing out for its strategic capacity as an engine for the country’s economic growth. The city has become Colombia’s key logistics and export hub thanks to its top-tier port infrastructure.

Geographical Advantage for International Trade

The city’s privileged geographical position in the Caribbean provides direct access to international markets, making it a crucial export platform for the country. As a vital logistics and export hub in Colombia, Cartagena connects Colombia with major international trade routes, strengthening its role as a key player in global commerce.

Industrial Clusters Boosting Competitiveness

With industrial clusters spanning key sectors such as petrochemicals, construction, and manufacturing, La Heroica boosts the productivity and competitiveness of local businesses, strengthening the city’s industrial base. This sustained growth in the industrial sector and creating quality jobs in the region underscores Cartagena’s prominence as a logistics and export hub in Colombia.

Mamonal Sustainable Eco-industrial Park

A prominent project in this sector is the Mamonal Sustainable Eco-industrial Park, an initiative driven by the Ecopetrol Group in collaboration with the National Business Association of Colombia (ANDI), the Ministry of Mines and Energy, and the Technological University of Bolívar. This project aims to improve environmental practices in the most potent chemical cluster in Latin America, located in Mamonal, which spans 10 kilometers. The park exemplifies how Cartagena is evolving as Colombia’s logistics and export hub, focusing on sustainability and eco-friendly industrial practices.

Sustainability and Circular Economy

The joint effort seeks to promote sustainability in the industrial sector by implementing environmentally responsible practices. Through this park, the goal is to establish an eco-industrial development model that will serve as a benchmark for the rest of the region. As Cartagena positions itself as a logistics and export hub in Colombia, sustainability is a key driver in enhancing its global competitiveness.

Innovative Industrial Practices

In an interview with El Universal about the growth and sustainability of the industrial sector in Cartagena, María Claudia Peñas, Regional Manager for Bolívar at ANDI, highlighted the significance of the Mamonal Sustainable Eco-industrial Park, a key project aimed at improving the environmental practices of local companies. The project is central to Cartagena’s evolution as a logistics and export hub in Colombia, fostering a circular economy that uses industrial waste to generate energy and reuse water.

Energy Solutions and Regional Impact

The pilot plan for the Eco-industrial Park aims to use company waste to generate energy and reuse water within the same industrial sector, promoting a circular economy. This project could also address energy issues in neighboring districts, such as Policarpa, Arroz Barato, and Puerta de Hierro. Cartagena continues to enhance its infrastructure, strengthening its position as a logistics and export hub in Colombia.

Adoption of Technology and Innovation

Industrial companies in Cartagena are increasingly adopting new technologies and innovations to improve their export competitiveness. Many are investing in more sustainable processes, such as reusing industrial waste, reducing carbon emissions, and transitioning to renewable energy sources. These efforts are crucial to Cartagena’s growth as a logistics and export hub in Colombia, as companies aim to access demanding markets that prioritize sustainability.

Investment Growth in Cartagena’s Industrial Sector

This key economic driver for the city has seen notable dynamism between January and September 2024, with significant investments. “134 investment opportunities have been managed, 17 new investment and reinvestment projects have been finalized in the industrial sector, including manufacturing, logistics, and energy transition, with over $380 million invested in this sector alone,” Peñas highlighted. These investments are essential to strengthening Cartagena’s logistics and export hub position in Colombia.

Export Performance and Market Demand

According to the latest Bolívar in Numbers report from the Chamber of Commerce of Cartagena, mineral fuels and oils, and products derived from their distillation, were the most exported products, totaling $860.7 million. Plastics and their manufactures ranked second, with $475.8 million, showing a 7% growth compared to 2023. Cast iron, steel, and steel products ranked third, with $89 million, marking a 16.9% increase in the same period in 2023. This growth highlights the significance of Cartagena as a logistics and export hub in Colombia.

Strong Connectivity and Export Growth

The National Administrative Department of Statistics (DANE) highlights Bolívar’s excellent export performance in line with this growth. In 2022, Bolívar accounted for nearly 12% of the country’s non-mining, non-energy exports. The dynamism of the export sector in Bolívar has been driven primarily by the excellent global connectivity of the Cartagena Port Group. Cartagena is well-equipped to meet international trade needs as Colombia’s logistics and export hub.

Free Zones and Industrial Expansion

Expanding and strengthening industrial free zones have also been key to the sector’s growth. Bolívar has become one of the most competitive free zones, the second department with the most authorized free zones in the country. It has 19 industrial parks, 10 of which are located in Cartagena and its surrounding area. This infrastructure is vital to Cartagena’s logistics and export hub development in Colombia.

Key Sectors Driving Cartagena’s Industrial Growth

Cartagena represents one of the most critical industrial engines in the region. “Our strength in exports remains in the petrochemical and plastics sectors, especially in the Mamonal Industrial Zone, which has proven to be a fundamental pillar of the regional and national economy, consolidating itself as one of the most important motors of the local industry. In second place is the casting, iron, or steel manufacturing sector, which continues to be a key area in Cartagena’s industrial value chain,” said Peñas. Cartagena’s industrial development reinforces its role as a logistics and export hub in Colombia.

Sustainability Efforts and Global Recognition

La Heroica is making significant strides in adopting responsible industrial practices, which not only enhance the competitiveness of local businesses but also position the city as a benchmark in Latin America. Among the most notable examples are large solar farms, which help reduce energy demand, aligning with global sustainability goals. Additionally, the environmental efforts of local companies are transforming industrial processes, improving efficiency, and reducing environmental impact. These innovations contribute to Cartagena’s growth as Colombia’s leading logistics and export hub.

Guanajuato has solidified its position as one of the most dynamic states in Mexico’s economy. According to preliminary figures from the National Institute of Statistics and Geography (INEGI), in 2022, the state ranked as the fifth-largest contributor to the national GDP, accounting for 4.7% or 1.4 trillion pesos in current terms. Only Mexico City, the State of Mexico, Nuevo León, and Jalisco surpassed its economic output.

This remarkable performance is fueled by a robust industrial base, strategic geographic location, and a commitment to fostering innovation and diversification across various sectors. Guanajuato is recognized as a hub for agribusiness, auto parts and automotive industries, leather and footwear, aerospace, and information technologies. Collectively, these sectors make Guanajuato a significant player in Mexico’s economy.

A Dominant Industrial Base

According to INEGI, the industrial sector in Guanajuato contributes a staggering 42% to the state’s economy. With a history of proactive policies to attract domestic and foreign investment, Guanajuato has become a preferred destination for manufacturers looking to tap into its skilled workforce, world-class infrastructure, and favorable business environment.

The Automotive Industry: A Powerhouse in Guanajuato

The automotive industry is the crown jewel of Guanajuato’s industrial base, making the state a leader in Mexico’s vehicle production landscape. The OEMs in Guanajuato play a critical role in this success. The industry operates in 21 of the state’s 46 municipalities and supports a vast network of 360 companies. Guanajuato is recognized as one of Mexico’s top producers of light vehicles, manufacturing over 788,000 units annually.

Six OEMs in Guanajuato

• Guanajuato stands out as the only state in Mexico with six major OEMs, five of which are focused on light vehicle production. These include:
• General Motors (Silao) produces vehicles such as the Chevrolet Silverado and GMC Sierra, known for their global appeal.
• Honda (Celaya): This company manufactures the HR-V, a popular compact SUV that meets demand in both domestic and international markets.
• Mazda (Salamanca): This company produces the Mazda 2, Mazda 3, and CX-30, contributing to the brand’s reputation for reliability and innovation.
• Toyota (Apaseo el Grande): This company is responsible for assembling the Tacoma, a high-demand pickup truck in North America and beyond.
• Volkswagen (Silao): This company specializes in engine production and powers several automaker vehicles worldwide.
• Hino Motors (Silao): This company focuses on truck assembly, particularly the Series 500 units, catering to the growing commercial vehicle market.

The automotive industry’s footprint extends far beyond manufacturing facilities. The OEMs in Guanajuato have spurred the development of a robust supply chain, supporting Tier 1, Tier 2, and Tier 3 suppliers. They have also created thousands of jobs, further integrating Guanajuato into the global automotive market.

The Emerging Aerospace Sector

Guanajuato is making strides in the aerospace industry, diversifying its economic base and capitalizing on its industrial capabilities. One of the standout achievements is the design and manufacture of Mexico’s first Light Sport Aircraft (LSA) by Horizontec, based in Guanajuato. Companies like CEI Aerospace and Speqtrum contribute to this sector, underscoring the state’s ability to innovate and compete in high-tech industries.

Leather and Footwear: A Traditional Pillar

Guanajuato has long been synonymous with leather and footwear production. The state is home to over 4,698 businesses in this sector, accounting for 52% of Mexico’s total. Guanajuato produces eight of every ten pairs of shoes made in Mexico, solidifying its reputation as a national leader.

The industry also has a significant international presence, with exports exceeding $900 million annually. This success is attributed to the state’s skilled artisans, cutting-edge manufacturing techniques, and established trade networks, making Guanajuato a key player in the global footwear market.

Agribusiness: A Growing Economic Cornerstone

Agribusiness is another vital sector in Guanajuato’s economy. The state ranks seventh nationwide in agricultural GDP, leveraging its fertile lands and advanced farming practices to produce high-quality crops. Guanajuato is a major exporter of strawberries, broccoli, and grain corn, contributing to Mexico’s position as a global agricultural powerhouse.

Approximately 200 agribusiness companies operate in the state, ranging from small-scale producers to large multinational corporations. These businesses drive economic growth and support rural communities by creating jobs and fostering sustainable development.

Information Technologies and Data Centers

Guanajuato increasingly embraces digital transformation, with a growing information technology (IT) sector comprising over 60 companies. The state is also emerging as a hub for data center investments. A notable project is Layer 9’s hyperscale data center, representing an investment of $800 million. Such initiatives reflect Guanajuato’s commitment to integrating advanced technology into its economic fabric, ensuring it remains competitive in a rapidly evolving global market.

Summary

Guanajuato’s economic dynamism is rooted in its diversified industrial base, which contributes 42% to its GDP. The automotive industry, anchored by six OEMs in Guanajuato, is a cornerstone of the state’s success, producing hundreds of thousands of vehicles and engines annually and driving economic growth. Meanwhile, traditional sectors like leather footwear and agribusiness continue to play a significant role in the state’s economy.

Emerging industries such as aerospace and IT highlight Guanajuato’s ability to adapt to new economic opportunities, while substantial investments in data centers demonstrate a forward-looking approach to digitalization. Guanajuato’s industrial and technological advancements ensure its continued relevance nationally and globally as one of the top contributors to Mexico’s GDP.

The OEMs in Guanajuato elevate the state’s status as a manufacturing powerhouse. They underscore its pivotal role in fostering economic growth, creating jobs, and attracting foreign investment, solidifying its position as a leader in Mexico’s industrial landscape.