Challenges That May Be Faced in the New Environment

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(Kingstone, 2011)

Just the fact that organizations like Wal-Mart and many others consider bribing the Mexican

government shows that they have a regard or information as the government being corrupt. Some

other interferences that have been known to happen are unfavorable legislation towards larger

corporations, and investors, but the situation surrounding this perception is ever improving and

starting to look more and more favorable for foreign investors. (Kingstone, 2011)

Mexico’s Economic System

Mexico’s has a semi-industrialized economy that is much like the rest of South America.

Mexico does enjoy the very large amount of industrial resources such as metals and petroleum.

Mexico is an ever growing economy starting out with agricultural ties and slowly shifting itself

to a manufacturing based and service based industry. The banking industry is a needed market in

Mexico to keep up with the increased manufacturing needs and growth within Mexico and

especially in the industrial growth that has been occurring in Mexico City. (Nicholls, 2013)

Mexico has placed an emphasis on integrating the local economy into being competitive on

the global economy as well. Proof of this is when the country signed a number of agreements

such as the North American Free Trade Agreement, also known as NAFTA. This agreement or

pact was signed between the United States of America, Canada, and Mexico. These steps were

aimed at eliminating tariffs and enabling free trade amongst the three nations, as well as

internationally. (J.C. Hamilton, 2012)

Reforms in Mexico have led to the United States and the World Bank into offering technical

support as well as loans for emergencies when needed. This is meant to avoid such situations like

the one the country found itself in when oil prices plummeted in the 1980s. Since the start of the

2000’s the economy has been on the rise and improving. The improvement has come from the

success in the mining industry as well as the ever improvement in the manufacturing sectors. (Nicholls, 2013)

Mexico’s International Trade involvement

Mexico’s main trading partner as mentioned before is the United States of America, but a

few other trading partners that play a large role are Canada, China, and Japan. It is interesting to

note that the government has found a special way of keeping itself in the mix on issues of trade.

It relies heavily on foreign direct investment, especially with the countries it trades with often

being the United States of America, and Canada. The government has used foreign direct

investment as a strategy to help improve and bolster the economy, and also help to share

mutually the exchange of expertise and information. No doubt this strategy will help with the

bank in terms of establishing itself with relative ease in Mexico. (Blake, 2009)

Mexico’s Involvement in other Developing Countries

It has already been noted that Mexico’s favorable location can help serve as a

gateway to other countries in central and south America. Mexico has strong ties to the other

countries in South America as far as politically and business relationships goes. Being part of

Latin America and being closely tied to the rest of the countries in Latin America this gives

Mexico an edge when it comes to affairs concerning Latin American countries. It’s already large

economy means that it has a substantial influence and image of success to the other Latin

American countries and should make further investment opportunities within the region have a

higher success rate. (J.C. Hamilton, 2012)

This influence and power Mexico possesses in the economy can be closely involved with

regional integration efforts in South America. While NAFTA is something that Mexico is

involved with another important global tie it has is the Organization of American States. This

organization includes nations in South, Central, and North America, it deals with a multitude

of economic and political affairs of all the involved regions. A substantial attraction to Mexico

is that it has the ability to connect the Westernized North American world and the Latin

American world means that it is a highly attractive market when compared to other markets in

the region. (Kingstone, 2011)

Final Assessment

Noting the numerous challenges that would be present in business activities in Mexico,

the market is still very attractive to investors within the service industry. The government is

dealing with issues such as corruption and incompetence so as to attract more foreign direct

investments. Records show that there have been numerous successful investment activities

in Mexico especially in the retail, manufacturing,