U.S Investment In Mexico

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the United States and Mexico was created in 1994.

One of the major sectors that holds a large promise for the U.S.
manufacturers is that of the automobile industry. The Mexican market for auto
parts is expected to grow by 24 percent from 1994 levels to $16.9 billion in the
year 2000. It is also expected that NAFTA will help increase the U.S. export
share of the Mexican market to around 70 percent by the year 2000. In the long
run, Mexico's location could profit the U.S. industries that establish
themselves there, through an expanded free trade area in Latin America, which
could include Argentina, Brazil, Venezuela, and Chile. Such expansion could
prove crucial to the U.S. industry, as a strong export orientation helped
sustain industry growth. Exports increased from 18.5 percent of total output in
1989 to 27.2 percent in 1991. And the level of employment which could be
attributed to exports increased from 116,500 in 1989 to 154,200 in 1991.

Mexico also offers some ...

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auto parts , falling
to 29 percent by the year 2003 through NAFTA measures.

Another major impediment to full-scale car production in Mexico was the
20 percent import tariff imposed on auto parts imported into Mexico. Also cars
imported into the U.S. that were produced in Mexico used to incur a 2.5 percent
duty.

Since NAFTA's implementation at the beginning of 1994, half of all U.S.
exports have been eligible for zero Mexican tariffs, including machine tools,
electronic equipment, and computers; components vital to the operation of the
plants. NAFTA reduced Mexico's auto parts tariff from 20 percent to 10 percent
on January 1st, 1994 and lowered other barriers. And cars ...

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