September 4, 2004

Wal-Mart in Mexico

Tyler Cowen over at Marginal Revolution posted some excerpts from a financial Times( which is subscription only) story talking about how Nafta has lead to social change in Mexico. Appearantly, most adds feature light skinned Mexicans, but the arrival of American companies has changed this somewhat as they seek out customers beyond the wealthy elite. Wal-Mart is mentioned:

Over the past five years, cheap credit from vehicle companies, department stores and credit card companies has put their products suddenly within the reach of the working classes.
Rogelio Ramirez de la O, an economic consultant, estimates that the Mexican market for cars and appliances is 30m, while the market for cell phones could be as high as 70m [TC: that is out of a total population of about 100 million]. He dates the change to the 1994 North American Free Trade Agreement, which lowered tariffs and prices for US goods and encouraged manufacturers to overproduce. Companies started to issue credit, while Wal-Mart brought rigorous pricing policies, enabling it to sell to more Mexicans. "Foreign companies came to sell to all Mexicans, not just the top 10m, and that is a reality that has influenced Mexican companies."

Posted by Bob on September, 4 2004 at 05:23 PM