Mexico since the advent of the North American Free Trade Agreement has improved is economic picture and shifted its political orientation to a degree. Multinational investment has been part of this change, and multinationals can be seen as both benefiting Mexico and yet contributing to economic stagnation in some respects. Many multinationals take advantage of Mexico's relatively cheap labor market, for instance, and so tend to keep wages low. NAFTA can be seen as part of a new effort at globalization as trade barriers are removed and more and more companies become multinational in orientation. Trade openings pose a problem for countries like Mexico interested in introducing reform while dedicated to not losing the capitalist base they have already achieved. Emphasis has been placed on the need to change regulation of foreign investment in order to increase Mexico's attraction to multinational enterprises, and to a great degree this has been accomplished. Reliance on multinationals, however, can create problems when those multinational companies investing in Mexico experience problems elsewhere, as was recently true with General Motors. An examination of the climate today shows how multinationals operate in Mexico and how well they serve Mexican economic interests.
In 1997, Mexico experienced economic growth of 7 percent, the highest rate since 1981, yet this as seen as insufficient to overcome the underlying problems. analysts stated that what was required was at least a decade of sustained growth of more than four percent per year for the prevailing of poverty to begin to be overcome. The industrial sector saw a growth of 9.3 percent in 1997, and this dragged some other sectors along; however, most of the productive system, especially agriculture, remained at levels below those registered before the crisis in 1994. There was a slight fall in unemployment, but salaries are still 20 percent down from 1994 levels. Mexican ...