U.S. foreign direct investment in Mexico; its implications and immediate effects

Abstract

This essay reviews the evolution of FDI from the United States to Mexico during the period following the signing of NAFTA, analyzing its implications for Mexico's economic life. For this purpose, the recent past leading up to the financial crisis of 1995 is studied, and how the country's foreign trade, especially with the US, increased significantly within the framework of NAFTA. It is concluded that, given the limited effect that trade and FDI have had on the Mexican economy as a whole, it has become even more necessary to implement public policy strategies to enhance the positive effects of both phenomena.