American Chamber of Commerce: Foreign Direct Investment in Mexico: Is Your Investment Safe?

Executive Summary

The Mexican government is engaged in a vital effort to disrupt and dismantle drug cartels. The military has been called in, local police are being reorganized, retrained and purged of corrupt elements, and changes have been made to streamline criminal trials.

The result has been an unprecedented number of arrests, extraditions, prosecutions and large-scale seizures of drugs, weapons, cash and assets. These efforts have also led to increased violence as criminal gangs confront government forces and battle among each other for control of key territory. These events have been widely publicized on both sides of the U.S.-Mexico border.

The media coverage, AMERICAN CHAMBER OF COMMERCE OF MEXICO (AMCHAM) is aware that the perceptions of Mexico as a place to live, work and do business are very often at odds with the reality. Although the number of armed confrontations has increased markedly since the government’s enforcement them. While the risk of being a victim of random drug-related shooting is minimal, it must be acknowledged that crime does have an impact on business in Mexico. As reported by our members in the 2010 Security Survey, the areas most affected include employee security, executive protection and transportation of goods.

As AMCHAM members will readily attest, Mexico offers tremendous investment opportunities. Since joining NAFTA, Mexico has developed a stable market economy, now the eighth largest in the world, and enjoys a solid record of macro-economic success. The middle class is now the largest socio-economic group in the country.

In addition, China’s low wage advantage has all but disappeared while transportation costs have soared. As a result, Mexico with its myriad of free trade agreements, is perfectly positioned to serve as an export platform for manufacturers.

In 2010 alone, a number of foreign companies have announced investment plans involving hundreds of millions of dollars to create or expand productive capacity in Mexico or to serve the burgeoning middle class. Mexico is a strategic economic partner of the U.S. AMERICAN CHAMBER/MEXICO is committed to working with Mexico in its efforts to reduce crime, to create more and better economic opportunities for its citizens, to improve transparency and the rule of law, and to promote greater integration between our two nations.

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