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Introduction
The wine industry in the United States has been gaining international recognition during the 1990s. US wine exports went from 27.5 million litres in 1986 to 272.3 million in 1998, an 890% increase. The value of wine exports went from $35 million in 1986 to $537 million in 1998, that is an increase of 1435% (Figures 1 and 2). With the international awareness and the growing demand for US wines, Mexico could be a natural market for US wines.
NAFTA a comprehensive rules-based agreement between the United States, Canada, and Mexico, came in force on January 1, 1994. NAFTA instantaneously eliminated some tariffs while other tariffs were significantly reduced and will fall to zero in the next few years. Many positive outcomes occurred because of NAFTA. Textile, agriculture, energy, and automotive sectors were opened. Border trade was expanded to include trade in financial, transportation, and telecommunication services. NAFTA greatly increased commerce between the United States and Mexico and improved the Mexican economy. In 1993 trade between Mexico and the US totalled 80 billion dollars. In 1997, three years after NAFTA, trade totalled 160 billion dollars. Employment has grown by 22% (2.2 million jobs) in Mexico, and by more than 7% (12.8 million jobs) in the United States.
After being the fourth largest export market for US wines, the US market share in Mexico significantly decreased due to the peso devaluation of December 1994 that substantially reduced the buying power of Mexicans. However, the Mexican economy seems to have recovered quickly. In 2000 the Gross Domestic Product (GDP) is being predicted to be US $295.5 billion. With reduced tariffs for US wines (due to the tariffs phase-out of NAFTA) and an improved Mexican economy resulting in an increased demand for wines, the opportunity of US companies to export wine products to Mexico is greater than ever.
Background
Mexico is a Spanish-speaking country located in North America with an area about three times the size of Texas. Mexico's neighbours are the United States to the north and Belize and Guatemala to the south.
With a population expected to be above 100 million by the year 2000, Mexico has been growing at the rate of 2.3 percent in the last 20 years. Mexico is a country...