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Mexico - December 2020

Gov’t focuses on nearshoring to increase foreign investment

The head of the United Nation Economic Commission for Latin America and the Caribbean (Eclac), Mexico’s Alicia Bárcena, reported on 1 December that Mexico was the Latin American country which experienced the least severe contraction of Foreign Direct Investment (FDI) so far this year, having only shrunk by 6% during the first nine months of 2020 compared to the regional average of 35%. Bárcena argued that this illustrates that Mexico remains an attractive investment destination due to several factors, such as the size of its economy, its installed industrial capacity, its proximity to the US market, its geographical location with access to two oceans, and the technological capability of its workforce in some regions. In addition, the US-Mexico-Canada Agreement (USMCA) on regional trade is also a critical element. However, Bárcena warned that the outlook for 2021 remains challenging.

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