Mexico Looking for FTA with Brazil

It is being reported that Mexico may go south of their border to establish a free-trade agreement with Brazil. The pact would further diversify Mexico's trade base. Currently, 80% of Mexico's exports go to the United States.

Such an agreement represents a new engine of growth in the global economy. What is the significance for U.S. investors? The two nations account for about 70% of Latin America's Gross Domestic Product. Any trade pact that increases GDP and real median incomes creates potential new customers for U.S. products and services, as well.

Past agreements have resulted in the creation of spin-off commerce in the participating countries. Experts say, typically, when free trade pacts are passed, they lead to increases in GDP and in aggregate demand, which leads to new businesses.