Pestle of Mexico

Topics: Mexico, International trade, World Trade Organization, North American Free Trade Agreement, Free trade / Pages: 18 (4382 words) / Published: May 18th, 2011
PESTEL analysis Mexico:
POLITICAL :
While Mexico has been a formal democracy since Independence, in reality the nation has been plagued by essentially a series of caudillos, representatives of local and regional power arrangements that have been successful at reaching national levels.

Politics are still corrupt and scandal-ridden, with parties often focused more on individuals than on programmes for action. And while progress has been made, the Mexican state is still far from comfortable with the concepts of accountability and transparency.

Previously the relationship with US was complicated but now the situation has significantly changed, especially after the end of cold war. U.S. successes, especially on the economic front, but also on the political front, obliged Mexicans to examine how their own nationalism was possibly preventing them from seizing opportunities for advancements.

Five Key Political Risks in 2010:

• Drug Violence & Terrorism
• Congressional Stalemate
• Corruption
• Calderon Losing Maneuverability and Political Capital
• Guerrilla Activity & Sabotage

ECONOMIC:
On the economic front over the 1970s and eighties, pushed the country to consider opening up to its northern neighbor as never before. As Mexico’s attempts to diversify its trade and investment portfolio failed in the 1980s, the fear of U.S. protectionist tendencies increased. At the same time the break-up of so much of the world into economic blocs underscored Mexico’s dangerous isolation. It was then that the new ideas finally began to prevail with the opening up of much of the economy to foreign influence. This was in great part aided by the negotiations towards, and the signing of, the North American Free Trade Accords and their enforcement in January 1994.

The country has moved, in the last two decades, to open up and then consolidate a democracy and to build a strong and relatively modern economy; however, two threats seem looming where the sustaining of

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