RE: On Globalization

Mexico has always portrayed itself as one of the most pro-trade countries in the world. For instance, we have a free trade agreement with the United States and Canada, and another one with the European Union. We are active members of the WTO, the OECD, the APEC, the Pacific Alliance, and have also signed multiple bilateral agreements with many nations, most of them deemed “strategic”.

a. What are the potential costs and benefits of adopting such a free trade strategy?

Nowadays it is very important to get strategies and alliances with different countries in the world, because with such negotiations each country can trade products with other country. For Mexico this type of trades are very important because Mexico can expand his market, exporting our own products, therefore, the Mexican economy will increase. In this free trade strategy the government stays out of the trade so the prices are a reflection of true supply and demand

b. What can it be done to reduce these costs and maximize those benefits?

To reduce theses costs and maximize those benefits it’s necessary to get strategies in the area of production, which means, that we can get a better equipment to increase the production. After getting the equipment necessary the production will be faster, so in that case our products will reduce the cost of production. For example in Mexico our skilled labor is not as good as it is in other countries that’s why it is very important for us to get solutions to that problem.

2. Drawing upon the new trade theory and Porter's theory of national competitive advantage, outline the Mexican case for one of these national industries: (1) oil and petrochemicals, (2) agriculture and foods, (3) mining, (4) manufacturing, (5) automotive, (6) entertainment and sports. Choose only one out of the six, and answer:

a. What kind of trade and economic policies would you recommend that the federal government adopt in order to build national competitive advantage in that specific industry?

In Mexico to build national competitive advantage in the manufacturing industry is necessary to get an economic policy in which the government promotes national products instead of getting international products. In order to do that the government requires support for Mexican investors by decreasing taxation and also getting national enterprises advantage over international products.

b. Do your policies support the basic free trade philosophy? Why, or why not?

Yes, this economic policy totally supports the basic free trade because it promotes internal and external commerce. With this policy the Mexican economy will increase, so we will be able to trade products to another country.

3. Read Objective 5.3 of Mexico’s current Plan Nacional de Desarrollo (attached).

a. What’s in there? How does the Mexican government frame the issue of international trade according to the theories we reviewed? Write a quick analysis covering all of these elements (if applicable):

After reading the different theories of International trade, Mexico has potential to export national products to other countries because after reading how is the industry in Mexico it is important for us as Mexican citizens to pay extra attention in developing strategies to increase our national economy.

Nowadays Mexico is part of different trades with many nations, which is a good thing so in my opinion it’s time for us to work on our industry to produce our own products and to use them instead of using international products.

As Michael Porter said in his theory each industry has to keep in touch with their customers, in order to supply them in the right form. The Mexican government plays a role very important in the Mexican economy because without a leader

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