OBJECTIVES OF NAFTA AND FTAA
The main objectives of these agreements as elaborated more specifically through its rules and principles are to:
Eliminate barriers to commerce in, and to facilitate the cross border movement of, services and goods between the territories of the three nation Parties.
Establish a framework for more trilateral, regional and multilateral cooperation to expand and enhance the benefits of the Agreement.
Provide adequate and effective protection and enforcement of intellectual property rights in each Party nation’s territories.
Promote conditions of fair competition in the area of free trade.
Create effective procedures for the establishing and implementation of this Agreement, for its joint administration and for resolving all of its disputes.
Increase substantial investment opportunities in the territories of the nation Parties.
The North American Free Trade Agreement (NAFTA) eliminates tariffs on practically all goods and products which originate in Canada, the United States, and Mexico over a maximum transitional period of fifteen years.
The North American Free Trade Agreement creates a free trade area and does not establish a common market. NAFTA does not and will not allow or permit for the unchecked movement of products and goods among the nations of the United States, Canada, and Mexico. Customs administrators will still continue to operate and goods and products entering Mexico, Canada, and the United States must still obey and to comply with the applicable laws and regulations of each country.
According to the immigration statistics of the Department of Homeland Security for the last decade some 64,633 Canadians and some 9,247 Mexicans were allowed entry into the United States for temporary employment opportunities under the North American Free Trade Agreement.
Canadian governmental agencies have estimated that as of December, 2006 a total of 24,830 American citizens and 15,219 Mexican citizens had entered Canada with the status of foreign workers. These estimated numbers include individuals who have entered Canada under the current stipulations of the NAFTA accord, and those persons who have entered under other prerequisites of the Canadian immigration law.
Since the earliest days of NAFTA, agriculture was and still remains a very controversial topic. Agriculture is the only section that was not negotiated on a trilateral basis. Instead three distinct agreements were negotiated and signed between each pair of Parties. The agreement between Canada and the United States contains significant restrictions and tariffs on agricultural products like sugar, poultry, and dairy products. The agreement between Mexico and the United States makes provisions for a wider array of options within their negotiated framework, this agreement was the first north to south free trade agreement to be implemented pertaining to agriculture.
The current agreement between Mexico and the United States in the area of agriculture is in dispute. The nation of Mexico did not invest any revenue into the infrastructure which is necessary to remain competitive. Lack of sufficient infrastructure such as efficient railroads and highways which will allow for the faster transportation of goods and products still remains a problem in Mexico, this situation creates difficult living conditions for the country’s poor. One of the most affected sections of the agricultural industry in Mexico is the country’s meat industry.
The nation of Mexico has gone from a small time player in the export market to the second largest importer of American agricultural goods and the North American Free Trade Agreement is the primary reason for this fact. By allowing the use of free trade many obstacles that at one time impeded business procedures in Mexico and the United States has been removed.
Because of these circumstances Mexican farmers have been able to provide a growing meat market for the United States which has led to a continual increase in meat sales and profits for American markets. This particular fact happens to coincide with a noticeable increase in Mexican per capita GNP that has also increased more meat consumption patterns in Mexico. This indicates that Mexicans can now afford to purchase more meat products which are produced in their own country and thus per capita meat consumption has been able to grow.
Mexican corn production has also increased with the implementation of the NAFTA accord. However, Mexico’s internal demand for more corn has at this time increased beyond the country’s ability to supply itself, and imports have become necessary.
In a research study taken in August of 2011 of the American Journal of Agricultural Economics, NAFTA has now increased American agricultural exports to the nations of Canada and Mexico even though the majority of the increases happened ten years after the agreements ratification. This particular research study emphasized on the effects that gradual phase in periods in regional trade agreements which includes the North American Free Trade Agreement can produce higher per capita profit margins. Also studies have shown that the rise in corn prices due to the demand for ethanol may improve the situation for Mexican farmers.
In 2010, United States government subsidies to the American corn industry totaled fifteen billion dollars. Because of these subsidies charges of dumping have been brought up. This has jeopardized Mexican corn farmers and has also made it difficult for the country’s self sufficiency.
Other studies reject NAFTA as the leading factor of depressing the income of poor corn farmers within Mexico. Economist cite that this condition was well underway a decade before NAFTA’s existence. An increase in corn production after the implementation of NAFTA actually helped to benefit Mexican farmers. According to other agricultural experts NAFTA could cause the destruction of various peasant cooperative village holdings by corporate investors and may threaten to totally halt the positive gains made by the rural people of the Mexican Revolution.
INTERNATIONAL MARKET ANALYSIS
Canada and the United States has been arguing for years over the American decision to impose a twenty seven percent duty on Canadian goods and services ready for importation. The Canadian Prime Minister was able to compromise with the American government and the two countries reached a settlement on July of 2007. This particular settlement has not yet been ratified by either the United States or Canada, reason being to domestic opposition in Canada.
Other fears come from the effects that the North American Free Trade Agreement has had on the Canadian parliament. In nineteen ninety six the petroleum additive MMT was taken into Canada by a company located in the United States. At that time the Canadian government limited the importation of this gasoline additive.
The particular American company after discussing the situation with their legal team brought a law suit under NAFTA Chapter 11. The company was asking a two hundred million American dollars settlement from the Canadian government and also from the Canadian provinces under the agreement on internal trade. This certain American business claimed that their additive had not been conclusively attached to any health dangers and that by preventing its use was a damaging implication to the business organization.
After determining that the ban was in violation of NAFTA articles, the federal government of Canada repealed the ban and made a settlement with the American company for a total of thirteen million American dollars.
There is lots of concern in Canada over the implication that if goods or services are sold at least once as a commodity the government cannot stop the further sale of it in the future. These concerns apply to various commodities that come from Canada’s lakes and rivers, fueling fears over the possible destruction of the Canadian ecological systems and also Canada’s fresh water supply.
The North American Free Trade Agreement opened the doors for substantial trade possibilities by ending tariffs on various goods and services, establishing an even playing field between the trading partners of Canada, the United States, and Mexico. NAFTA and to a lesser extent FTAA has allowed goods and products such as poultry, eggs, and other meats and crops to be tariff free. This has allowed many American corporations and in particular many corporations from Arizona to trade freely, and import and export huge amounts of products and goods.
In the state of Arizona which is situated on the American/Mexican border, it has been able to establish a viable trading partner with the state of Sonora Mexico. Since the implementation of the NAFTA accord the countries involved have been able to achieve the following results:
1. Exports for Canada were estimated to be at $248.2 billion and $163.3 billion for Mexico, these countries were the top two buyers for American export products and goods in 2010.
2. America goods and products to NAFTA in 2010 were estimated to be $411.5 billion which was up 23.4% from 2009. These American exports to NAFTA accounted for 32.2% of overall American exports in that particular year.
3. In 2010 the top exported items were machinery which amounted to $63.3 billion. Also close behind were vehicle parts which were estimated at $56.7 billion, electrical machinery at $56.2 billion, mineral fuel and petroleum products estimated at $26.7 billion, and plastic products which were estimated at $22.6 billion.
4. American exports of agricultural products to NAFTA countries was estimated to total $31.4 billion much of these exports were from Arizona at least one tenth. Leading categories in exports included red meat products, fresh and frozen food products at $2.7 billion. Arizona played a key role in these export statistics.
5. American exports of private commercial services to NAFTA were estimated at $63.5 billion in 2009 which was up from the previous year.
Imports for Canada were estimated to be at $246.7 billion and $229.7 billion for Mexico, these countries were the top two suppliers of goods and products to the United States in 2010.
American goods and products from NAFTA were estimated to total $506.1 billion in 2010 which was up 25% from the previous year. These American imports from NAFTA accounted for some 27% of the overall American imports in 2010.
In 2010 the top imported items were mineral fuel and crude oil which amounted to approximately $116.2 billion for that year. Also close behind were vehicles for $86.3 billion, electrical machinery at $61.8 billion and precious gems and gold which amounted to $13.9 billion.
American imports of agricultural products from NAFTA countries were estimated to total $29.8 billion for the year of 2010. The leading categories for importation included fresh vegetable worth 4.6 billion, snack foods including chocolate worth $4.0 billion, fresh fruit with the exception of bananas worth $2.7 billion, live animals worth $2.0 billion and fresh meat products along with other foods worth some $2.0 billion. The state of Arizona also played a major role in these import statistics.
United States importation of private commercial services not including the military and government services were estimated at $35.3 billion in 2009 which was actually up from the previous year.
Trade Balances: 10
The Americans goods trade deficit with NAFTA was approximately $94.7 billion in 2010, which is a 36.5 % increase and is $25 billion more than in 2009. The United States trade deficit with NAFTA accounted for some 26.8% of the overall American trade deficit in 2010. The United States had a services trade surplus of an estimated $28.8 billion with the nations of NAFTA in 2009 which is the latest data available.
The United States direct foreign investment in the North American Free Trade Agreement and the countries that make it up is estimated at $357.8 billion in 2010, and is up from the previous year. American investing involvement in NAFTA is accomplished by the use of non-bank holding companies and also in the manufacturing, finance/insurance, and mining industries.
The direct foreign investment of Mexico and Canada in the United States was estimated to be at $237.5 billion in 2010 which was actually up from the previous year. It has been determined by economist that all important categories have steadily been on an upswing in spite of the failing American economy of the previous years.
Maquiladoras which are Mexican factories that receive imported raw materials and create goods for the purposes of exportation have now become a landmark of commerce in Mexico. These are usually manufacturing factories that have moved to Mexico from the United States because of lower manufacturing and employee cost. This condition has sparked turmoil and debate in the United States as to if this should be permitted to happen since it leads to American job loses.
Experts have determined that income in the maquiladora industries has increased 15.9% since its implementation of the NAFTA accord in 1994. Other industries are now benefiting from the free trade agreement and the share of exports from border states such as Arizona has increased in the last decade. This has set the pace and allowed for the rapid growth of borde0r states and their larger cities on both sides of the borderline.
Marketing strategies for a business entity that wish to enter into trade in the North American Free Trade Agreement market needs to have certain marketing strategies available to them and in place in their infrastructure at the time of the entrance. In regards to American companies they can follow the example already provided to them by the world’s largest retailer which is the Wal-Mart organization.
Wal-Mart is the world’s largest retailer with yearly revenues in excess of $244.5 billion. The organizations international division maintains 1,500 units internationally, while providing employment for more than 330,000 associates. One of its earliest excursions outside of the United States was into Mexico where it operates 671 units and has had revenues of $10.6 billion Wal-Mart also entered into Canada by its acquisition of 122 Wool co stores and at this period of time is the dominant retail corporation in Canada.
Actually the Wal-Mart Corporation had entered Mexico and Canada before the ratification of NAFTA in 1994 and had retained much of the basic corporate model in these nations and was able to take advantage of NAFTA in a really beneficial manner.
Wal-Mart was also able to make significant improvements that were more in tune with the local taste of the population. These strategies outline Wal-Mart’s basic business strategies and describe how these strategies were also successfully utilized in both Mexico and Canada.
Primarily because of its dominating position in the retail marketplace Wal-Mart tends to bring up a multitude of different responses from people. They tend to admire businesses that are very successful, but at the same time resent it for various business practices that it uses on some of their suppliers. These variables should be left out of the equation when trying to determine which of this corporations business and marketing strategies can be utilized successfully. The focus should be on this businesses logistics and marketing practices and marketing strategies and how as a business that wishes to trade within NAFTA you can incorporate and adapt some of this organizations practice to become successful in the markets of Canada and Mexico. Any marketing strategies should be geared towards that determination and what will be required to achieve these goals.
Any business that wants to be competitive in today’s global marketplace needs to utilize marketing strategies that will make their business successful. The countries that form NAFTA offer a ready market for these businesses but these businesses must know how to market their products to the general populace of these countries. A business must ask itself some basic questions when trying to determine what directions their marketing strategies must take, these questions can go as follows: Who are my customers? How to deliver my product or service to my customers? Cost analysis.
One successful business strategy to accomplish this is to sell nationally advertised well-known brand name products at low costs. The brand names draw customers to the businesses. Since brand name products are available at other businesses which you may be competing with the deciding factor may be in the pricing, a potential customer may choose your product because it has a lower price.
By utilizing a consistently low price for your products on a daily manner, this can become a major cornerstone on with your company’s marketing philosophy can rest upon. This actually means that customers do not have to wait for any particular special sales or mark down price event. On a daily basis store traffic is maximized and expenses for any promotional events are kept to a minimum.
Marketing strategies attempt to build a virtuous cycle by using low pricing which will increase foot traffic in the business which in turn permits the business to show a profit from volume, which in turn allows the organization to purchase in bulk from suppliers, which in turn permits the business to charge low prices.
Any potential business entity must attempt to maintain a low cost structure by focusing on factors such as economies of scale, the environment of a store, and to ensure that the store is convenient to use by a customer. These factors will aid in the overall marketing strategies and it will eventually save on distribution costs in a variety of ways. Distribution center locations are one such marketing factor. A wise business manager needs to go against the conventional wisdom in retailing by constructing scale efficient distribution centers first and then locating stores that are located close to the distribution centers.
Strategies such as cross docking allows for the products or goods to spend maximum time in inventory. The main objective for this procedure is to allow the business to maintain its low pricing strategy by using extremely low margins in the world of discount retailing. In keeping low distribution costs this could prove to be an insurmountable barrier for any potential business competitors.
A business needs to prioritize on scale efficiencies especially by enabling the huge majority of square footage in any stores to be utilized for the purpose of selling. Large stores seem to give the customers more options to buy and this also gives the store lots of chances to replenish their stores with more items for sale. The best option for this strategy is keep the store inventory low and yet not be afraid of stock outs. Cost savings can also be achieved by this particular marketing strategy by making the most out of minimizing any promotional costs.
Utilizing the most recent technology is another very good marketing strategy for any business entity. Any business organization can quickly become a dominant player in their area of expertise by using technology for business purposes. A company can use technology to mine for any potential customer data and information and then use it in the decision making processes. By utilizing technology a business organization can stay connected to the various stores and distribution centers within its domain and allow for real world information flow.
Any new business organization that wants to enter the NAFTA business arena should study how some very large American companies did financial when they first became active in NAFTA. They should also learn from the mistakes that these companies made when entering NAFTA.
In the pre-NAFTA world many large American corporations were not successful in Mexico because they had to deviate considerably from the way they were used to doing business in the United States. Tariffs made procuring items more expensive. In addition inadequate infrastructure reduced its logistics efficiency. The information technology system at the time utilized certain centric metrics and database systems that often led to receiving faulty data for decision making processes, NAFTA ended up changing all of that.
NAFTA permitted well known manufacturers such as Sony to locate some of their operations in a manner that minimized transportation costs for retailers. By locating distribution centers in strategic areas a business can continue to utilize a strategic advantage.
Businesses must continue to make significant adaptations. Greater diversity in store formats must be utilized by the parent companies in any foreign market. These same business strategies that are used in one country in NAFTA can also be utilized when entering another one although variations in marketing strategies will need to be implemented depending on the customs and culture of the country. Some American companies when entering a foreign market failed to take this into account and ended up losing millions of dollars by implementing unsuccessful marketing strategies to a customer base that was unresponsive.
Businesses must always consider this factor when entering a foreign marketplace and they must remember who their customers are and how to get product to them at an affordable cost while still making a profit for themselves. By holding on to these variables and meeting the needs of the locals a business can make huge profits in utilizing the North American Free Trade Agreement.
RISK FACTORS AND SWOT ANALYSIS OF A CROSS BORDER BUSINESS
Because of the less expensive labor market that is available in Mexico many American and Canadian corporations are moving some of their manufacturing facilities to that country which is part of the North American Free Trade Agreement (NAFTA). As of May 2009 Mexico outranked China as the lowest cost manufacturer of certain industrial components. Many American manufacturers have reduced costs in recent years but still the cost of production in the United States is still significantly higher than most other countries.
When starting up a business in Mexico the type of business entity will be a determining factor for taxation purposes. There will be some businesses that will be required to pay taxes in Mexico as well as in the United States, while still others businesses will not be required to do so. A potential business owner will need to estimate the amount of profit they intend to repatriate and then discuss their plans with an attorney in order to determine the best business entities, Mexican and American for their particular operation.
Mexican labor laws are very protective of employees and they incorporate certain statutes that we do not have in the United States. By carefully assembling a Mexican business organization and possibly having more than one company can help to avoid unnecessary expenses. Getting familiar with the various types of Mexican labor laws will help to avoid any unpleasant surprises that tend to come up when starting up any business organization in any country. Unlike the United States, labor laws in Mexico require a company to pay wages to laid off workers as well as three month severance pay to terminated workers.
Even with these conditions that exist in Mexico labor cost are substantially lower overall in Mexico than they are in the United States and the longer work week can provide increased productivity over the typical forty hour work week that is prevalent in the United States.
Another interesting fact is that the 41% drop in the Mexican peso when compared to the American dollar has made Mexico an even cheaper country to start a business. Manufacturing workers in some border towns can be hired for $1.50 an hour.
Even though starting up a business in Mexico may not be area of high cost for a business operation an entrepreneur will want to become familiar with the Mexican legal system in order to protect yourself from certain risks because there are several important differences from American business law practices. Be sure to use a Mexican attorney with experience in multi-national business in order to prevent any mistakes that could come back to haunt a person at a later time. The United States Department of Commerce offers listings of legal and other services that pertain to matters of business service providers with expertise with Mexican law.
Despite some problems, opportunities do exist for cautious investors that are considering doing business in Mexico. The economic and political turmoil that has gripped Mexico over the first half of the year has for the most part sent many potential American investors running back to the sidelines. Some American corporations that were making big plans to expand into Mexico are now deciding to wait on those plans and see what the coming year brings forth. Some companies that committed themselves to Mexican projects are now attempting to find ways out of those commitments.
Many experts tend to think that the best approach at this time is the wait and see attitude for any potential investors. Although the Mexican government seems to actually want to solve their problems and accomplish real reforms, such fundamental changes will take time and more bumps on the road will surely be waiting.
Even though Mexico has problems it still has tremendous market potential. Foreign investors should look past Mexico’s current problems because these current economic problems will not hamper the nations exploding population growth or Mexico’s citizens never ending appetite for American goods and services. The labor market in Mexico remains very trainable and literate.
Investors on both sides of the border are just now starting to enjoy the full benefits of the North American Free Trade Agreement (NAFTA) which should help the nations of Mexico, Canada, and the United States to prosper financially. The fact that the United States and other countries have already approved massive aid to Mexico shows that these nations remain committed to seeing Mexico become an international economic powerhouse.
When one considers the potential that Mexico has for economic growth a smart investor will not scratch Mexico off of his or her list as a country into which they can expand their business into. Those individuals that enter the marketplace armed with patience and also with a team of experienced business consultants should in all probability receive a substantial pay back from their initial business investments. Although it is difficult to say anything about Mexico’s current problems an assessment can be made about the three primary types of properties that most interest the majority of American investors.
Resort properties and most of Mexico’s other popular areas have been largely unaffected by the weak peso and the country’s other economic problems. In fact some Mexican firms based in the United States claim that the falling peso has actually help to boost tourism because foreign travelers are taking advantage of favorable exchange rates.
However development of new resort properties is probably going to slow down in the coming years due to the fact that some of these popular resorts are becoming very expensive to build and the money needed to build them is getting tighter all the time. There are currently lots of major American corporations that are looking to purchase existing resort properties immediately, so the financial problems that Mexico is having has not frightened everyone away.
Commercial and industrial properties are also popular properties for foreign investors however the current credit shortage has curbed the construction of these types of buildings in most areas of Mexico. There are still a lot of American businesses especially banks, insurance companies, and telecommunication corporations that are looking for space but are having difficulties finding areas that will work for them.
The industrial market is still very strong driven for the most part by owner-users. A powerful industrial belt is developing just south of the United States/Mexican border which stretches all the way from Tijuana to the area of Mexico that are just below the state of Texas.
The manufacturing industry is exploding further south in the cities of Guadalajara, and Monterey, but new manufacturing plants in much of Mexico City have been banned in an effort to battle air pollution.
Retail properties are in abundance in Mexico and various American companies claim that their businesses have actually been hurt because of the dropping value of the Mexican peso. However many American retail firms are sticking to their plans for corporate expansion as are many businesses from Spain, Canada, and other countries. These nations still continue to show much interest in leasing space in Mexico.
High end retail firms in Mexico have not felt too much pain mainly because there is a tremendous number of extremely wealthy people in Mexico, and they do not usually panic every time the peso fails. As a matter of fact Saks Fifth Avenue is still going through with its plans to construct a 200,000 square foot shopping facility in Mexico City. In addition to making sure that they have the most current data pertaining to the best shopping areas to build on and offer the most promising markets, American investors also need a basic understanding of how Mexico’s real estate industry and laws operate. Recent changes in Mexican law have brought forth markets that were closed only a few years ago to foreign investment firms. However there are still great differences that exist between Mexican and American laws in the real estate and investment markets.
Investors from North America interested in purchasing property in Mexico should first determine whether the property lies inside the Mexican government’s so called restricted zone. This area goes for 100 kilometers which is about 65 miles from the international border and about 35 miles from all of its coastlines. For decades foreigners were not allowed to directly purchase and to own property inside the restricted zone, instead legal title had to be held by a Mexican bank or a Mexican citizen.
In the last few years the Mexican government loosened many of the laws pertaining to foreign investment. Foreign investors can now own property directly in the restricted zone by creating a Mexican corporation. This is a major breakthrough that permits investors the opportunity to avoid the various fees charged by a broker and to own and develop the property without the use of a trustee.
American investment firms who create Mexican corporations in order to own property directly may also have a simpler time raising financing which is an extremely important consideration in a nation where most lenders do not like to loan money on commercial projects. Mexican corporations that hold title to real property can offer stock in the newly formed Mexican corporation as either primary or secondary collateral for a real estate loan, thus skipping some of the typical concerns that lenders have concerning loans for real estate developments which are located south of the border. Although foreign investors that fail to create Mexican corporations must still utilize a broker to purchase real estate property in the restricted zone, the property trust can now last for 50 years instead of the thirty, and can now also be renewed.
Even though today it is much easier for foreigners to buy land in Mexico most Canadians and Americans still do business with a reputable real estate corporation for insight into local Mexican markets and business customs. Using a Mexican business partner really improves a business entities chance of succeeding. A good Mexican real estate company will know its markets and the localities of any specific area much better than any foreigner can ever hope to. A business organization armed with this type of information and knowledge can make a world of difference when doing business south of the border.
Joint ventures can be formed in Mexico by utilizing the Mexican equivalent of a corporation which is a limited liability company, or a general or limited partnership. Careful consideration must be used when deciding upon which business entity to use. The right structure is crucial and must take into account both American and Mexican laws and tax rules.
A Mexican business partner may not care which type of entity is utilized because Mexican law treats partnerships the same as corporations. However American investors must take a substantial interest in how the deal is structured because it can have a tremendous effect on their American tax liability.
Financing can still be difficult even though American investors who form a Mexican corporation in order to hold title to their real estate, these investors usually find it easier to procure financing than investors that do not have in holdings in Mexico. In the past Mexican banks have for the most part steered clear of loaning revenue to these types of investment ventures. Mexican developers have for the most part used cash for any projects that they wished to accomplish raising additional needed funds through presales, or by forming condominiums for their projects. As a matter of fact in various Mexico City office buildings each tenant owns the floor that it occupies.
Many American investment firms are self-financing their Mexican projects or employ the assistance of an American based financial institution, although the nation of Mexico’s recent economics and political troubles have pushed many American lenders to the sidelines. Also the nation’s current credit crunch is not helping matters out either.
FINANCIAL STATEMENT AND PREDICTIONS
Determining the future viability of a cross border business requires constant evaluation of the interests of the financial institutions which is providing the capital. Any divergence which may arise needs to be addressed by the financial provider and may eventually result in changes to the business template if not the strategy.
Cross border private banking primarily relies on a foundation that entails provisions both for market, products and services analysis as well as organizational terms. The primary reason for market and services analysis is to access and categorize certain risk factors. It typically focuses on the interaction of existing regulatory requirements on the items of securities or banking services, advertising, prevention of money laundering, taxes and foreign exchange transactions and the consequences that occur due to non-compliance with these requirements.
Cross border banking operations can be conducted either offshore or onshore. The first option requires the establishment of a local permanent subsidiary by the financial service provider, while the last option clients are managed by an agent based in a nation other than that of their residence.
Regardless of which one of these operational strategies is utilized it is of the upmost importance to consider the applicable legal and tax legislations. Legislation that is implemented on a local level can be quite different and difficult from those in the country of domicile of the financial institution.
The organizational dimension of a cross border business template will include policies, formulas, training operations, monitoring and processing. Policies and formulas allow for all business parties to be aware of the rules of conduct that must be followed by everyone engaged in a cross border business entity. Market specific training operations are meant to render client consultants aware of the existing regulatory rules and guidelines in a foreign market. Monitoring can help to verify if after receiving training, client consultants are ready to perform cross border business transactions in a proper and efficient manner.
With all of this information and data said, it is of vital importance that any investment firm or private investor that wishes to invest in Mexico develops a team. There are many legal and tax issues that American and Canadian investors who are serious about doing business in Mexico or any other country will not be aware of. Any investor needs to address whether as developers they are hoping to build a new office or resort, looking to acquire property, or as real estate brokers they are looking for space for a specific client of theirs.
Being successful at conducting business matters south of the border or north of the border needs an effective and savvy business team of consultants with expertise in different areas. In this manner these professional individuals will be able to come up with various business plans and can by combining their creative talents resolve complex issues.
The North American Free Trade Agreement (NAFTA) eliminates tariffs on most goods which originate in Canada, Mexico, and the United States over a maximum transitional period of fifteen years. Currently for most Mexico-U.S. and Canada-Mexico economic interaction, NAFTA will for the most part either eliminate currently existing customs duties, or eventually phase them out all together in five to ten years.
NAFTA has managed to open many doors that were previously closed to many investors and has provided them the opportunity to begin the construction and implementation of revenue producing endeavors on every side of the border for the nations of NAFTA. Statistics have been shown in areas of agriculture, manufacturing, services, and real estate development that show there is great potential and prosperity that can be accomplished by these three great nations working together as one colossal economic engine.
The NAFTA corridor
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