To begin describing how has been the growth and progress of FDI in Mexico it is important to define FDI itself. According to the OECD Economic Outlook of 2003, Foreign Direct Investment is "an activity in which an investor resident in one country obtains a lasting interest in, and a significant influence on the management of, an entity resident in another country. This may involve either creating an entirely new enterprise or, more typically, changing the ownership of existing enterprises (via mergers and acquisitions)" (157).
a. Mexican International Relations Synopsis
Mexico first opened its market in 1973 with a law that promoted Mexican investment and regulated the entry of foreign investment. However, the barriers and limitations it stated turned this law into everything but a promotion law. By 1989, 10 years later, a new regulation came. Politicians were surprised by the contradictions between the regulation and the law: the regulation opened significantly Mexican doors to foreign investment. Four years later, with the leadership of President Salinas de Gortari, a new Law for Foreign Investment was formulated, stating clearer conditions for foreigners (Pérez-Moreno). From this point on Mexico starts simplifying procedures and other guarantees to investors. It is also from this point that Mexico sees the importance of opening its frontiers to international markets by signing bilateral agreements with different countries. No country in the world has signed more free trade agreements: Mexico has celebrated bilateral agreements with 32 countries from different areas, including the two biggest markets in the world: the US and EU. Altogether these countries make up a market of about 850 million consumers that is set to increase with the new agreement with Japan. Much of the FDI in Mexico is attracted by the country's strategic location in North American Free Trade Agreement, which has positioned it as a launch pad to the US and Canada.... [continues]
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