It's not just Mexico's proximity that makes it such an ideal export destination for U.S. companies--although this helps. Mexico is the 11th largest market in the world and the third largest export market for the United States, thanks to NAFTA.
"Despite the economic problems in Mexico, our exports to Mexico have increased from pre-NAFTA days," says Jim Desler, director of public affairs for the Commerce Department's International Trade Administration. Since the implementation of NAFTA in January 1994, U.S. exports to Mexico have increased--from 1993 to 1996, they grew by 26 percent, from $42 billion to $53 billion.
Among other things, NAFTA eliminated nontariff barriers, including almost all import license requirements, making it easier for U.S. companies to win Mexican government contracts. This also allows the United States to provide more services to Mexico, most notably transportation, financial, telecommunications and engineering services. NAFTA also protects the intellectual property rights of U.S. companies in Mexico--good news for U.S. entrepreneurs.
Mexico's need for infrastructure services can't be overemphasized: The Mexican government plans to invest $35 billion in infrastructure over the next decade. And almost all of Mexico's materials are imported from the United States. Other hot industries are transportation and financial, information and environmental services.