FOREIGN DIRECT INVESTMENT IN MEXICO (FDI) INTRODUCTION Mexico is Latin America's leading trading nation and the ninth largest economy in the world. No country has signed more free trade agreements: 33 in all, including the world's two largest markets, the United States and the European Union. Overall, these signatory countries constitute a preferential market of over one billion consumers. Much of the foreign direct investment in Mexico is attracted by the country's strategic location within the North American Free Trade Agreement, which has positioned it as a stepping stone to the United States and Canada. Other attractions are competitive production costs and a young, skilled workforce, along with political stability and an open economy. As a result, the number of foreign companies established in Mexico has risen to more than 16,000. Opportunities for investors are numerous, particularly in sectors such as automotive, electronics, information and communication technologies, agri-food, chemicals and pharmaceuticals, biotechnology, financial services, water production and energy. As part of the Mexican government's campaign to attract foreign direct investment, the 44 foreign offices of the Mexican Bank for Foreign Trade (Bancoxt) operate as trade commissions that offer advice and assistance to potential investors. Mexico has long been one of the most attractive nations in which to invest, both in manufacturing and infrastructure. Its large population, inexpensive labor, stable political environment, and proximity to the United States have given it significant advantages over other potential recipients of foreign direct investment. Mexico is a showcase of how emerging markets can attract foreign capital flows into their economies. In 1999, Mexico remained the third largest destination for foreign direct investment among emerging markets only after China and Brazil. On a global basis, Mexico ranks 15th among recipients of foreign direct investments, representing 1.3% of total investment flows. During the first three months of 2000, Mexico received $3 billion in FDI and is expected to end the year with $12 billion. In addition to Mexico's economic reforms and liberalization processes, an important element in making Mexico a very attractive market for foreign investors has been the negotiation of bilateral investment treaties (BITs). To date, Mexico has established this type of agreements with 13 countries (Argentina, Austria, Benelux, Denmark, F...... middle of paper... ... Manufacturing industry participates with 79.0% • Transport and communications with 3.0% • Financial services with 2.9% • Construction with 0.4% • Mining with 0.3% • Agriculture with 0.1% • Electricity and water with 0. 1% COUNTRIES WHERE FOREIGN DIRECT INVESTMENTS COME FROMThe foreign direct investments made in Mexico come mainly from the United States, Holland, Germany, Canada, Spain, the United Kingdom and Japan. Foreign direct investments have allowed Mexico to acquire new technologies, improve infrastructure, boost productivity and increase competitiveness in world markets. Today, Mexico is a major producer and exporter of automobiles, televisions and laptops. More and more foreign companies are participating in Mexico's development and have become a key element in the transformation industrialist of Mexico. New capital has helped remake its industrial base, transforming the country into what Business Week has called a new “industrial powerhouse.” CONCLUSION