Pestle of Mexico

4394 words 18 pages
PESTEL analysis Mexico:
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
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In 1990, Mexico approached the United States with the idea of forming a free trade agreement.
Mexico’s main motivation in pursuing an FTA with the United States was to help stabilize the
Mexican economy and attract foreign direct investment. NAFTA is a free trade agreement that eliminated trade and investment barriers among Canada, Mexico, and the United States. Mexico’s intention in entering NAFTA was to increase export diversification by attracting FDI, which would help create jobs, increase wage rates, and reduce poverty. The agreement also contains provisions for market access to U.S. firms in most service sectors; protection of U.S. foreign direct investment in Mexico; and intellectual property rights protection for U.S. companies. NAFTA is the first U.S. agreement that addressed environmental and labor concerns by including related provision in separate side agreements to NAFTA. At the time the agreement went into effect, a number of economic studies predicted that the trade agreement would have a positive overall effect on the Mexican economy, narrowing the U.S.-Mexico gap in prices of goods and services and the differential in real wages.

Mexico-Costa Rica:

The Mexico-Costa Rica FTA was signed on April 5, 1994, in Mexico City and entered into force on January 1, 1995. It was the first in a series of FTAs negotiated by Mexico loosely based on the NAFTA model


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