Return to the main menu for MexicoStrengths:
The North American Free Trade Agreement (NAFTA) played a crucial role in softening the recession and reactivating the Mexican economy. NAFTA has attracted investment in numerous sectors of the IT industry throughout Mexico.
Business and consumer spending is on the upswing and foreign and domestic investment is at an all time high.
Mexico shares a border of more than 2,000 miles with the United States and offers a wealth of business opportunities.
The telecommunications sector has been privatized and a new array of digital, fiber optic, satellite, microwave, and other services are spreading over the country at a rapid pace.
Mexican macroeconomic indicators include new stability in the peso, a leveling out of inflation and interest rates and a healthier balance of payments.
The expansion of the telecommunication infrastructure in Mexico has provided many economical benefits for the country and its investors.
The Government of Mexico remains committed to the path of economic integration with NAFTA partners and the rest of the World.
Mexican customers are slowly but steadily upgrading their computer installed base.
Due to the de-regulation of the Mexican telecommunications market, new local telephone licenses are in the process of being approved. Furthermore, more firms have applied for licenses to offer various telecommunications services, including data transmission, carrier of carriers, long and local telephone services, etc.
Mexico facilitates American suppliers to take advantage of emerging opportunities for innovative services such as outsourcing, data warehousing and LAN management. In addition, NAFTA provides preferential treatment for American and Canadian suppliers.
IT is gaining strength in Mexico. Many Mexican companies are eager to use new technologies.
American developers of virtual reality systems may benefit from the increasing interest in R&D by Mexican universities. In addition, U.S. developers may benefit from the use of these systems for advertising purposes.
Mexico passed a new Copyright law in 1996, which strengthened Copyright protection over its previous law.
Mexico has sought closer relations with the USA, Western Europe and the Pacific Basin.
The preferential access granted by NAFTA has allowed American providers of satellite services to expand their services into the Mexican market.
The cheaper peso contributed to a major improvement in the trade balance, which improved from a deficit of $18 billion in 1994 to surpluses of $7 billion in 1995, $6.5 billion in 1996, and $1.4 billion in the first quarter of 1997.
Weaknesses:
The Mexican government has prolonged the improvement of its regulatory system. The country needs to create a more stable and attractive investment environment.
Weak enforcement of copyrights threatens American suppliers and manufacturers.
Information technology is not readily available throughout the country. Mexico is a highly centralized nation with its economic nerve center located in the capital city.
Even though the macroeconomic indicators include new stability in the peso, a leveling out of inflation and interest rates and a healthier balance of payments, Mexico’s purchasing power was sharply reduced.
Even though, Mexico passed the Copyright law in 1996, copyright and trademark piracy is extensive in Mexico.
Foreign firms continue to identify bureaucracy, slow government decision making and lack of transparency as among the principal negative factors inhibiting investment in Mexico.
Mexico imposes a high tax burden.
Labor difficulties exist due to Mexico’s high percentage of unskilled labor.
Last update: December 18, 1998.
