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Investment Opportunities Between Mexico & Japan Have "Vast Potential"

26 May, 2013

As Mexico continues to capitalize on its rising status as one of the world’s strongest economies,energy sources and manufacturing hubs,President Enrique Peña Nieto is actively working to increase trade with Japanese business leaders and has announced an agreement with Japan’s Mitsui Corporation to build a new $460 million gas pipeline.

“The deal will provide cheaper and more abundant energy for Latin America’s second-largest economy,” writes the Financial Times. “Mexico is thought to sit on one of the world’s largest shale gas reserves.”

The pipeline will reportedly connect Mexico with the U.S. state of Arizona and will transport around 770m cubic feet of gas each day upon its completion. This will provide a way for Mexico to economically import – and in the future potentially export – gas to and from the U.S.,especially after the second $800 million phase of the project is completed over the coming years.

Today,Mexico’s state oil monopoly PEMEX is the only entity the nation’s constitution allows to explore for gas and oil,but Peña Nieto’s administration is determined to enact energy reform that will permit the private sector to enter into joint-venture contracts that are aimed at developing the nation’s vast energy potential.

In addition,Mexico’s government is determined to farther increase the country’s already booming economic growth by implementing new policies that will encourage outside investment from individuals,foreign governments and corporations. Due to the nation’s strategic geographic location as the hub between Latin America and North America,there is still a great deal of untapped potential in Mexico real estate.

Since Japan and Mexico signed the Economic Association Agreement in 2005,bilateral trade between the two nations has reached more than $20 billion and has grown upwards of 10 percent each year. This number is expected to increase substantially over the coming years as both trade and Japanese investment in Mexico’s manufacturing sector continues to expand.