Mexico Case

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Mexico: Crisis and Competitiveness

1.Why is Mexico growing is slowly during the 21st century?
Mexico is growing slowly because of US recession, its own performance and China's rise.
a. For US recession and China's rise, and economy recession in United States. America is a main country Mexico export to. US recession resulted in decrease of export demand. And at the same time, China joined in WTO (World Trade Organization). For labor costs were cheaper in China, and also Chinese exports kept increasing and became the 2nd largest supplier in the world. These two main reasons made Mexico lost competitive power gradually.
b. And there are also some other factors slowed Mexico’s economy. Such as H1N1 virus, drug-smuggling gang, drop in oil production and droughts in decades. All these natural disaster and man-made crimes affect Mexico’s growing.
c. For Mexico’s own performances, its education is still growing slowly on quality even though Mexico’s government made some improvements. Its legal system is inefficient. And crimes and corruptions issues have not been solved.

2. Dose Mexico benefit or suffer from its proximity to the USA?
Even though the situation that USA used Mexico's cheap labor, illegal immigration brought some security issues and US recession affected Mexico's economy. I think Mexico still does benefit from its proximity to the USA. For Mexico's petroleum resource, tourism, the free-trade agreement, remittances, and so on.
a. In 1911, for Mexico's petroleum resources U.S. and British companies began to develop the industry and Mexico became an oil exporter from then. In 2009. Pemex(An Mexico petroleum company)exported its petroleum to USA. And imported Mexico's gasoline, natural gas and petrochemicals.
b. Mexico had free-trade agreement with USA and Canada. The tariffs were reduced. And this also brought more Foreign Direct Investment. For NAFTA took effect. Maquiladoras came out, this kind of companies would import components duty free

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