U.S. firms invest in Mexico's processed food industry

摘要

As well as increasing trade between the USA, Canada, and Mexico, the 1994 North America Free Trade Agreement (NAFTA) has resulted in a sharp increase in foreign direct investment (FDI) between the partners, and in particular between the USA and Mexico. Mexico is now the third largest host country for US FDI after the UK and Canada. This increase in FDI continues a trend that began in the late 1980s when the Mexican government changed many FDI rules. Trends in FDI since this time are outlined. Economic growth in Mexico has also had a positive impact on FDI. Whilst this is particularly true for the processed food sector, US companies have also invested in Mexico's farmland, poultry farms, and other production agriculture, to a lesser degree. Mexicanfirms have also increased their investments in US processed food companies and the case of the Mexican company Grupo Industrial Bimbo S.A. is cited as an example of this. The benefits of two way FDI and trade for the US and Mexican economies are discussed.