Mexico Is a `Must See' for American Business Mexico Is One Model for Latin America of How to Secure Access to the US Market and Attract Foreign Investment. Argentina Exemplifies the Region's Battle with Corruption

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SCIENCE Applications International Inc., a successful United States-Canada-based company specializing in high-tech applications to industry and infrastructure, was looking for opportunities to further its presence in the international marketplace.

Passage of the North American Free Trade Agreement was all it took to convince SAIC that Mexico was a "must" site for expansion.

"NAFTA was clearly influential in our decision to do business here," says John Glancy, president of SAIC Canada and Mexico, which last month announced plans to set up shop in Mexico.

"We saw NAFTA as a signal that Mexico was serious about becoming a lot more involved in high-tech development and the kinds of skills our company offers," he adds. SAIC will hire "the best Mexican scientists and technologists we can find" to focus on three areas in which Mr. Glancy says he sees NAFTA promoting technological advancement: transportation, the environment, and telecommunications.

The link between free-trade agreements and increased foreign investment and job growth - especially the kind of good-paying, highly skilled jobs SAIC will create in Mexico - is the reason why Latin American countries attending this weekend's Summit of the Americas in Miami will be looking for concrete steps toward a hemispheric free-trade zone. That link, which appears to be operating in Mexico with the arrival of companies like SAIC, explains why Latin countries are keeping an eye on NAFTA-member Mexico as it adjusts to a closer relationship with its economically powerful neighbors, the US and Canada.

"The most important thing all these {Latin} countries want is secure access to the US market and strong foreign investment," says Sidney Weintraub, a Latin specialist with the Center for Strategic and International Studies in Washington. "Mexico has secured this with NAFTA, so they look to Mexico as the way to go."

Not that all of Latin America is ready to join NAFTA, Mr. Weintraub notes. "Mexico took important internal steps to prepare for free trade," including tough decisions to control debt and inflation and to privatize industry, preparing it for foreign involvement, "but that's not true yet everywhere else. …