Issue 266, August 8, 2000
Mexico is on the move, and most observers agree that changes in Mexico are good for trade and business. Mexico is one of the largest trading partners for the United States, second only to Canada. Since the implementation of the North American Free Trade Agreement (NAFTA) in 1994, both import and export trade with Mexico have grown at an unprecedented rate. Now, the political and economic changes occurring in Mexico present even greater opportunities for expanded trade. This is especially true for the many U.S. and foreign-owned Mexican manufacturing facilities (also known as Maquiladoras).

On July 2, 2000, the Mexican people ended 70-years of political dominance by the PRI Party and overwhelmingly supported Vicente Fox of the PAN Party as their new President. Mr. Fox has pledged to reform the Mexican government towards greater decentralization from Mexico City by placing more control at both the state and local levels. He has pledged to reform the judicial system towards greater respect for the rule of law rather than the rule of men. Also, he has pledged to promote more economic opportunities for Mexico's increasingly young population. All of these reforms are good for business and good for trade.

In addition to politics, Mexico has been actively negotiating international trade agreements with a number of other countries. Unlike the United States, which has not negotiated a major free trade agreement since 1994, Mexico is on the move in expanding its international trade opportunities. On June 27th, the Mexico-European Union Free Trade Agreement (MEUFTA) became effective. Under the agreement, a majority of Mexico's industrial goods are eligible for duty free treatment when imported into the EU. Most European goods entering Mexico will be subject to duty phase-outs over the next five years. Mexico is also working on free trade agreements with Japan, Korea and a host of other Asian nations.

As the business environment in Mexico improves and free trade agreements expand, companies in Mexico, as well as those seeking to operate in Mexico, will be uniquely and strategically positioned for expanded trade opportunities.

Our contributing writer, Steven B. Zisser, is an attorney in the San Diego border community of Otay Mesa, where he specializes in the practice of U.S. Customs and International Trade Law. He can be reached at (619) 671-0376.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.