nient regulatory agencies, lower wages, cheaper raw materials, attracting new demand for a product, and avoiding trade restrictions. According to Sowinski (2000), Mexico meets many of these requirements of comparative advantage for the United States and other countries. Mexico especially meets these requirements for the U.S. under a preferential trade agreement. The agreement was started as far back as 1965; the same year Border Industrialization Program was started (Graham 2000).
             Mexico's governing policies of FDI have only recently been liberalized. Kling and Alexander (1998) explain why Mexico's trade policy has been so strict. Mexico has come from being a Colony of Spain, to being its own independent country with a dictatorial government and Plantation type economy. This Plantation economy set the foundation for the country's classes to become a caste type system. This caste system allowed for a very small portion of the population to control a very large part of the country. As late as 1910, only 800 families owned 98% of the land in Mexico.
             As noted above, previous to1965, Mexico's FDI policy was one of the most restrictive. In 1972, Mexico began revisiting its policy on FDI. By 1994, Mexico's FDI policy had to meet the policy of the NAFTA. This would allow the U.S. and Canada the security to invest in Mexico (Graham, 2000).
             NAFTA helps to ensure U.S. FDI into Mexico under its chapter 11. These rules are up to allow continued liberalization of Mexico's FDI policy, making it easier for the U.S. to invest. A major victory arises from these rules for the investor. If the investor believes that a NAFTA-member country has violated these rules, compromising an investment, the investor can engage in actions against the state who hurt their investment. Under NAFTA chapter 11 part B, there is an investor-to-state resolution process that is heard by a tribunal. If the hearing is in ...