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As Mexico embraces free trade and puts its fiscal house in order, more multinational companies pour into the country
If BUSINESS MEXICO'S Top Foreign Companies in Mexico list, which contains such household names as General Motors, Coca-Cola, Kodak, and HewlettPackard, could represent any single thing, it would be a clear indication of investor confidence in Mexico.
Month after month, more and more multinational companies come to the conclusion that this country is a great place for business.
This confidence, though certainly on the rise, is not a recent phenomenon. Investor faith in Mexico has been high for some time now. Between the signing of the North American Free Trade Agreement (Nafta) in 1994 and last year, more than US$64 billion in direct foreign investment has poured nto Mexico, and what's more, according to Banco de Mexico, Mexico attracted more than US$11 billion last year alone.
With these numbers in mind and even a quick glance at the well-known names sitting atop the Top 50 Foreign Companies list, it will come as little surprise that Mexico has overtaken Japan as the United States' second-largest trading partner. And in less than 10 years, Mexico expects to beat out Canada for the coveted role as the United States' number-one trading partner.
Why are so many companies setting up, shop here in Mexico? The answer is. no longer simply "cheap labor" and "location," though those two factors are indeed very important.
To the contrary, Mexico has made great strides to put its fiscal house in order. Efforts to ensure macroeconomic stability, carry out judicial reform, and aggressively promote free trade have been internationally recognized and applauded, and the prestigious companies on BUSINESS MEXICO'S Top 50 list are proof positive of that.
STABILIZING THE MACROECONOMY
As previously stated, Mexico's universally acknowledged success must be attributed to many factors besides the obvious ones, such as the low cost of labor and the country's ideal location between the United States and Latin America. For starters, we have the signing of Nafta, as well as a handful of recent investment-rating upgrades.
Add to that President Ernesto Zedillo himself. Already being penned into the history books as the man who brought democracy to Mexico, Zedillo will also be known as the president who...