U.s Investment In Mexico :: essays research papers

U.S Investment in MexicoEconomics 580Dr. LeonHaitham Boukhadour finalize 96Mexico has cleared itself as one of the biggest emerging markets inthe universe today. It has exhibited many of the signs of a high growth economy,offering several advantages to potential investors. Some highlights of theMexican economy include " single-digit inflation, a balanced popular budget, realeconomic growth (presently at a rate of 12 partage), a deregulated economy and afavorable investment climate" (Risk charge/ June 94, P.32). Mexico alsopossesses a strategic geographic location as a gate way to Latin Americanmarkets.     Mexico is among the fastest- growing export markets for the get togetherStates. In 1985, Mexico became the third largest market for total U.S. exports,behind Canada and lacquer. In 1992, Mexico surpassed Japan as the second largestexport market for U.S. manufactured goods. Mexico straight off accounts for $1 out ofevery $10 of total U.S. export s.     After the passing of NAFTA, isobilateral transaction was quite balanced in 1994,with the U.S. registering a surplus of $1.3 trillion, some unchanged from1993. However, there was a sharp add in trade opportunities, as both importand export growth exceeded 20 per centum. fifth of the total trade that occursbetween the United States and Mexico was created in 1994.One of the study sectors that holds a large promise for the U.S.manufacturers is that of the gondolamobile industry. The Mexican market for autoparts is expected to grow by 24 percent from 1994 levels to $16.9 billion in theyear 2000. It is also expected that NAFTA will help increase the U.S. exportshare of the Mexican market to around 70 percent by the year 2000. In the longrun, Mexicos location could profit the U.S. industries that establishthemselves there, through an expanded free trade area in Latin America, whichcould include Argentina, Brazil, Venezuela, and Chile. Such expansion could prove crucial to the U.S. industry, as a strong export orientation helpedsustain industry growth. Exports increased from 18.5 percent of total output in1989 to 27.2 percent in 1991. And the level of betrothal which could beattributed to exports increased from 116,500 in 1989 to 154,200 in 1991.     Mexico also offers some interest possibilities in legal injury of productionfacilities for U.S. based firms. In 1994 alone Mexican car and truck productiontotaled 1.173 million units, up 8.6 percent from 1993. The Mexican governmenthad along term plan in terms of automobile production in Mexico, and it is in aphase now that favors foreign investors and exportation out of the Mexicanmarket. Check the figure bellow to see how the plan has progressed so far.