Mexico at a crossroads of trade.

Latin America's resurgence in global trade and business is well under way. The success of the Mexican economic model commenced under Miguel de la Madrid's administration and was "perfected" under the Carlos Salinas' administration. Economic opportunity in Latin America is present in heretofore

Brazil, while on track, seems to have temporarily lagged behind.

Mexico's unprecedented economic reforms have been the model for Latin America. Mexican President Carlos Salinas de Gortari, with his Harvard economics background, has taken a disciplined approach to economic modeling.

Mexico's desire to play a meaningful role in the global economy and its desire to improve the economic status of its people have been paramount in its economic restructuring. The final element in this restructuring is the North American Free Trade Agreement ("NAFTA") soon to be signed with the U.S. and Canada.

The Mexican economic model deserves a careful look to understand its success. While the U.S. has suffered through its recession, Mexico has found economic growth. Quite a switch from the old adage that when the United States gets the economic sniffles, Mexico contracts pneumonia. Mexico's economic restructuring required significant and often seemingly impossible changes of attitudes, both culturally and economically. It greatly revised the old economic and political model of a closed, nationalistic economy wary of outsiders.

Competitive, market-oriented economics represented the direct opposite of past practices. The debt and economic crises of the '80s and the attendant hyperinflation provided the political environment for testing open market philosophies.

Mexico's accession to the General Agreement on Trade and Tariffs (the "GATT"), while seemingly a small step to those accustomed to open and competitive markets, was a major political barrier to be overcome in Mexico. The skill of then Secretary of Commerce, Hector Hernandez and the de la Madrid administration under the guidance of Carlos Salinas in selling these ideas to Mexican industry cannot be overstated.

The 1986 signing of the GATT by Mexico opened the way toward the economic reforms of the Salinas administration and very rapidly showed Mexican industry the benefits of a more open and competitive trade and economic policy. No one at the time, however, could have imagined the possibility of NAFTA.

Among the economic reforms of the Salinas administration were the privatization of most government-owned or controlled companies, the return of the banks to the private sector, lifting or virtually all import licensing requirements, abolition of laws relating to technology transfers, significant reductions in inflation, a restructuring of all foreign debt, balancing the internal budget, restructuring of rules and regulations relating to foreign investment, and a host of related changes designed to provide a stable and predictable foreign investment policy.

These major policies are now being fine-tuned. The reaction of industry to the "new Mexico" under the Salinas restructuring paved the way for the keystone in President Salinas' economic program: NAFTA. Under NAFTA, most experts see an increase in Mexico's real GNP of over 10 percent with the creation of many jobs in Mexico.

NAFTA, when signed, will place significantly more assurance in the minds of the international community that the changes reflected in the Salinas administration's economic restructuring will remain in place permanently. While there are still substantial roadblocks in the United States Congress to a final passage of NAFTA, it is clear that President Bush and President Salinas are both deeply committed to the concept and that a final agreement is nearing completion for submission to Congress.

In summary, the effect of Mexico's economic restructuring cannot be understated. Two-way trade with the United States has increased from $18 billion in 1986 to over $65 billion in 1991. Foreign investment has more than doubled to over $30 billion and Mexico's stock market is a leader in both value and investment yields.

Mexico has been able once again to access international financial markets, having placed in excess of $5 billion-dollars in those markets in the last 24 months. Mexico has restored the respect, internationally, of the banking and financial communities. It is impossible to track the significant number of business transactions being completed in Mexico. Almost every major U.S. company is looking for a business relationship in Mexico.

Additionally, we see significant movement between small to medium sized companies in accessing Mexican markets for sale of their products and/or manufacturing facilities for goods to sell in the Mexican market.

Initial indications suggest that in the foreseeable future, the economic restructuring will continue and that foreign investment in Mexico will continue to increase as it translates into help for Mexico and profit for the foreign investor. This in turn should translate to increased economic activity in Mexico and a steadily increasing stream of disposable income on behalf of the Mexican consumer. We watch with great anticipation as the balance of Latin America follows the economic reforms Mexico has instituted.

Duane H. Zobrist is a partner in the Los Angeles office of Carlsmith Ball Wichman Murray Case Mukai & Ichiki and is president of the United States-Mexico Chamber of Commerce. He is a specialist in international business law and a co-author of "Businessman's Legal Guide to Business in the United States."