By Samuel Peña Guzman
Foreign Investment Coodinator State of Nuevo Leon

There is no doubt that aerospace industry represents a challenge for every developing country, and Mexico could not be the exception. Developing aeronautic policies is clearly a virgin field both for the Federal Government and states governments.

Nowadays the main goal for Mexico and hence for its several regions looking to develop this industry is establishing a Bilateral Aviation Safety Agreement (BASA). This agreement certifies the aeronautic products, parts and components imported by the USA, including maintenance, flight operations and environmental certification, guaranteeing the highest standards both in quality and safety in the production processes meant for the aeronautic industry.

An agreement of this kind allows for the Federal Aviation Administration (FAA) to acknowledge the capacity of the civil aeronautics agency in a foreign country to perform aeronautic certification activities; in Mexico this would be Dirección General de Aeronáutica Civil a division of the Ministry of Communications.

While other countries have a BASA or limited agreements that allow the manufacture of specific pieces and components exported to the USA, Mexico is still undergoing a slow process to land this agreement. An agreement of this kind would undoubtedly allow for suppliers and manufacturers operating in Mexico to export products directly to their final destination as a first stage company, avoiding costs for the inspection and certification by American authorities. The most important thing is the additional incentive this would provide for the arrival of larger investment to this sector in Mexico, increasing both, the companies´ capacity and the use of Mexican raw material in the aerospace sector.

I deem this agreement necessary to further trigger this sector; especially, as mentioned in the paragraph above, to increase investment with high technological contents and larger value added which in the long run could generate an aerospace cluster.

It is to be mentioned that the process could take some time, because Dirección de Aeronáutica Civil must achieve the competency and training levels so that its staff could eventually be prepared to certify parts and components made in Mexico under FAA´S regulating framework. There is an alternative way that other countries have tried; namely, entering Cooperation Agreements between FAA and the corresponding agency, providing a joint certification to the manufactured products, designs and components; after making joint inspections, the products are authorized for export, which also guarantees a higher quality in products and services.

In conclusion, an analysis must be made of the aerospace policies that the federal government wants to implement in this field. Said policies must include a regulation framework that allows for the several groups in the sector to consolidate a legal mechanism that provides juridical certainty to suppliers of these services, generating not only safety and productivity but also efficiency and quality in this sector, which is precisely the failure most developing countries incur into.

Last, we could mention that aeronautic industry both in Mexico and abroad will closely follow this process, because it would eventually allow for larger investment in this sector; otherwise increasing presence in the aerospace industry will prove a hard task. The lack of definition in entering a BASA Agreement is undermining Mexico´s efforts to be more competitive and attract investment in this sector.

Hector Samuel Peña LL.M, MPA Currently works as a Foreign Investment Coordinator for the State Government of Nuevo León, he has LLM Masters in Law from American University, Washington, College of Law, and a Masters in Public Administration from the George Washington University and has advised foreign companies who are expanding operations in to Mexico. He is also a professor at the State University of Nuevo Leon in Monterrey, Mexico and a Member of the Consejo Mexicano de Asuntos Internacionales COMEXI.
The point of view is strictly from the author and does not represent the vision on any of the author institutions relationships.

He can be reached at: samuel.pena@mexicoglobal.com