There was a time when Mexico’s economy was viewed as being retrograde, and, comparatively speaking, it was. Over the past several years Mexican economic growth has resulted in a stable currency, an increasing consumer base for goods and services, and an impressive and diverse industrial base. Mexico is now the world’s 11th largest economy. Ameliorated Mexican economic conditions have created opportunities for their closest U.S. neighbors, the border states.
Researchers such as Erik Lee, the director of the San Diego-based North American Research Partnership, have noted that “the U.S. and Mexico surpassed five hundred billion dollars in two way trade in 2001.” He and others like him believe, that as Mexican economic power increases, the numbers will only continue to register an upward trajectory.
Although Mexican economic fortunes have been positive as of late, there are several challenges that have to be tackled to optimize capacity for growth. Work still needs to be done to:
- Reduce income disparities. These will diminish as Mexico continues to attract more Direct foreign investment (FDI), and further adapts its educational system to meet the needs of a better educated and higher skilled workforce.
- Increase economic competitiveness. According the Heritage Foundation, Mexico ranks fiftieth among one hundred and seventy-seven nations examined. Canada came in sixth, while the United States ranked tenth in the most recent survey performed
- Diminish red tape. Some economic activities are subject to complex and expensive licensing procedures. The country’s president , Enrique Pena Nieto, has recently put forth measures that are aimed at creating more Mexican economic opportunity by reducing some of the barriers facing potential investors in Mexico’s energy sector.
Changing perceptions. Mexico has done a palpable job in reducing violent crime related to drug cartel activity. This must be effectively communicated to a wide audience.
Since the signing of the NAFTA in 1994, Mexican economic officials have been diligent demonstrating their commitment to trade through their actions. Mexico now has free trade agreements in place that give the products produced in the country duty free access to a total of forty-four nations.
Since the NAFTA was signed, and over the course of this period of Mexican economic revitalization, trade between the U.S. and Mexico has quadrupled. Shipments emanating from both countries have created a significant number of export dependent jobs.
Mexican economic growth, as well as its ability to attract manufacturing investment, are projected to continue. Many companies that once produced in China are returning to North America, and are choosing Mexico as their base of operations. The reason for this trend is primarily due to escalating wage rates in China, it is also significantly impacted by lower transportation costs that result from being adjacent to the world’s largest consumer market.
The source article of this post can be read at AZ Central.
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