Tax Reform and Nafta re-negotiation might deter Mexico’s foreign investment


Money wants certainty, Mexico’s Government admits that uncertainty around the re-negotiation of the North American Foreign Trade Agreement (NAFTA) has stopped new investment projects in the country, “. . .it has paralyzed new ideas, new projects, new intent ideas . . .” said the Economy Secretary, Ildefonso Guajardo.

“Entrepreneurs think that it is useless to advance forward if they don’t know precisely what the rules are going to be, said President Peña, in the dialog table for actualization of the biggest trade agreement on Earth, which joins Mexico, Canada and the USA since 1994, but Guajardo trusts the direct foreign investment flow (which still yield black figures) will be beyond the forecast for the whole Peña

“We have observed that the projects which have been already designed, that is already in process, have been materializing, they have bet on going forward” said Guajardo and added that the Tax Reform of December 2017 in the USA, threatens to deter Mexico’s investment attractions and American investors might prefer to leave their money in the USA, so many Mexican businessmen have asked their Government to analyze these effects within their “fair dimension” before committing to any changes in the Tax schematics.

The appeal of Mexico for foreign investors decreased the first eleven months of 2017, way down to their lowest level in the last six years according to the Institute of International Finance (IIF) due to the uncertainty associated with NAFTA re-negotiations which is an issue that surged with Donald Trump taking charge of the USA Presidency, there is even risk of termination of the agreement which would be a strong blow against Mexico’s economy.

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