Mexico Foreign Direct Investment Unclear for 2018

Newmark Senior Managing Director, Gregg Wassmansdorf, recently authored his third of six annual editorials for fDi Intelligence, part of fDi Magazine, providing industry-leading insight into globalization and foreign direct investment (FDI). In this article, Mr. Wassmansdorf explains that Mexico’s immediate FDI environment, due to several factors including the U.S. NAFTA renegotiation, is looking unclear in 2018.

Excerpt below.

"In the complex mix of macroeconomic, investment and trade statistics it can be difficult to clearly identify causal factors but several things we know for sure. Growth in total trade between Mexico and the US has averaged nearly 9% annually for the past 25 years. For the first time in a quarter century, the past two years showed back-to-back declines in Mexican/US trade. 

Also, there has been a persistent imbalance in this trade arrangement since 1995 whereby the US has imported on average 26% more than it exports each year, though this deficit has steadily declined for the past decade and now sits at 20% per annum. This is the trade imbalance US president Donald Trump seeks to rectify through either renegotiating – or abandoning – Nafta. 

The US trade imbalance with Mexico is largely a result of the dramatic increase in FDI that has arrived there since the early 2000s. Depending on the specific reference year, the number of FDI projects in Mexico has roughly tripled in a decade; the value of capital investment, which is always volatile, has doubled or tripled; and jobs created from FDI quintupled in both 2015 and 2016 compared with 2003.”

Read the full article, View from the Americas: Mexican FDI faces perfect storm.

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