Question

What are the problems and opportunities with Mexico and the NAFTA agreement? How does crime and education affect the country in investor relations? What recommendations would be proposed and what implementation issues could be forseen?

Answer 1

Problem

• New NAFTA agreement unlikely owing to new tariffs on Mexico
• Mexico to impose retaliatory tariffs on grapes, pork legs, etc.
• The outlook for an agreement not optimistic, not even for the automobile sector

Opportunities

• The powerhouse has more than $20 trillion in GDP
• Prices have reduced, and, trade has quadrupled in the last 20 years
• It has created jobs, and, reduced FDI; good for oil, and, food sector

Crime, and, Education

• Increases risk in trade in the Free Trade Area
• Mexico is implementing a three-point strategy: oral trials, reformed police institutions, autonomy in the Attorney General's office
• Challenges in terms of security
• Crime exposure leads to negative outcomes for education

Implementation issues

• NAFTA has integrated North America but Trump administration believes it has shifted jobs, manufacturing, and production to Mexico
• NAFTA's legacy on wages has led to industrial sectors facing painful disruptions