GENERAL INFORMATION:

Mexico has a total area of 1,972,547 sq.kms. It occupies the Central American region and it is a developing country. Fifty percent of the country's 195 million hectares are desert, and 75% are in mountainous areas; less than 11% have adequate rainfall; 16% receive sporadic rains, and 64% very little rain at all.

The Country's population rose from 13,670,000 inhabitants in 1900 to 81,140,922 in 1990. The rural population alone went from almost 10 millions in 1900 in 1900, to nearly 23 million in 1990. The economically active rural population currently stands at 6 million, of which 56% are ejido members and communal landholders, and 3% live on government-owned land. Although almost 60 million Mexicans live in cities, the rural population growth rate has more than doubled the pressure on productive land. The average rate of illiteracy from 1941 to 1950 was 42.2% dropping to 23.7% in 1970, 17% in 1980 and 8% in 1989.

ECONOMY:

The new economic policy aims at reducing high inflation rates, resuming economic growth, consolidating public finances and stabilising the exchange rate. Under the pact for Economic Stability and Growth (PECE), inflation had fallen from 52% in 1988 to 18.8% in 1991. During the first six months of 1991, GDP grew by 4.8% as compared to the same period in 1990. This constitutes the highest growth rate in 10 years. From a demand view, economic growth has been based upon increasing investment and non-petroleum exports. Estimated investment growth for 1991 surpassed 10% in real terms; the volume of non-petroleum exports rose by 6% and consumption has grown at moderate rate, similar to that of GDP. The economy will continue to function within a framework which promotes the revitalisation of savings, investment, production employment and salaries.

IMPORTING ENVIRONMENT:

Mexico's trade negotiations with the rest of the world follow five basic principles:

1. They must lead to significant tariff reductions, taking into account the economic difference between Mexico and its trading partners.
2. They must minimize non-tariff barriers restricting exports, without violating norms applicable to other areas such as health or the environment.
3. They must ensure stable access to foreign markets, so as to promote long-term certainty.
4. There must be flexible mechanisms for the settlement of disputes, avoiding unilateral measures.
5. Comparative advantages and economic complimentarily must be utilized to the full.

Mexico has adopted a more fluid and flexible trade policy. This is required by the entry of new participants into the world of international trade, the emergence of trading and blocks and the growing competition for markets and capital. In consequence, Mexico will attempt to broaden and improve its bilateral economic relations with Latin America, the countries of North America, the European Community and the Pacific Basin. At the same time Mexico will continue to participate actively and constructively in regional and multilateral organisations such as the Association for Latin American Integration (ALADI) and the GATT, in order to help liberalise trade flows and thus open the door to an increasing participation of Mexican products in the world markets.

The following Organisation can offer advice on Commercial information:

EMBASSY OF INDIA
Avenida Musset 325,Colonia Polanco,
C.P.11550,Mexico D.F.

TEL :00-552-5311050
FAX :00-52-5-2542349
E-MAIL:indembmexico@iserve.net.mx