Section I

                    COMMERCIAL OVERVIEW

Overview of the Import Market

The bulk of imports into Mexico are intermediate goods, which
accounted for over 71 percent of all imports from January to March
1994.  Imports of intermediate goods were up by 18.8 percent during
the first three months of this year.  Much of this was for the
maquiladora industry.  In the first three months of 1994, 25 percent
of imports were for the in-bond industry.  Capital goods imports
were up 13.9 percent as of March 1994, reflecting some growth in
investment after a decline in the second half of 1993.  The higher
rate of import growth also reflects the passage of NAFTA, which
lowered tariffs on many goods.  Consumer goods imports (11.4
percent of the total) grew 14.9 percent.  Trends in 1994 are in sharp
contrast to 1993 when intermediate goods and consumer goods
imports grew only 2.5 and 1.3 percent, respectively, and capital
goods imports fell 4.3 percent.

Regulatory and legal changes in Mexico may be having some impact
on patterns of trade.  In September 1992 the government began
enforcing strict quality standards and labelling requirements for
certain imported products; although the rules had been on the books
for several years, they had not been rigidly applied.  Implementation
of these product norms caused some trade disruption during the last
quarter of 1992 and early 1993.  In December 1992 the Government
of Mexico began enforcing a statutory $50 limit on the value of
products that a Mexican resident could import duty free via land.
Previously, in practice, the duty free limit was $300 per person for
residents entering Mexico via land transport.  Since residents of the
Mexican border states previously did a large part of their shopping
in the United States, enforcement of the $50 per day duty-free
allowance probably has marginally reduced Mexico's imports.  The
Mexican Foreign Trade Law allows the Mexican Government to
apply safeguards against imports harmful to local industry as well as
countervailing duties in the case of dumping of goods.

Synopsis of the Commercial Environment

Mexico is one of the top markets for U.S. exports, which in 1993
totalled 41.6 billion dollars.  U.S. imports from Mexico in the same
period were 39.9 billion, yielding a positive trade balance of 1.7
billion dollars.  U.S. exports are expected to continue to a strong
growth trend during 1994.

Since the entry into force of the North American Free Trade
Agreement in January 1994, half of all U.S. exports to Mexico were
eligible for zero Mexican tariffs.  These include some of the U.S.
most competitive products:  semiconductors and computers, machine
tools, aerospace equipment, telecommunications equipment,
electronic equipment, and medical devices.  The majority of
remaining duties have been reduced, and will continue to drop
annually until complete phase-out.  Within the first five years after
NAFTA, two thirds of U.S. industrial exports will enter Mexico
duty-free.

The opportunities for U.S. service exports will benefit such
industries as telecommunications services, insurance, banking,
accounting, and advertising.

Host Country Attitude

There is a strong preference on the part of the Mexican purchaser
for U.S. goods of most types.  Advantages include more rapid
delivery times, ease of communications, expectations for better
follow-up and technical support, and familiarity with U.S. product
offerings.

Major Business Opportunities

There are good opportunities in virtually all sectors, ranging from
intermediate goods through consumer products and into the services
sectors.  Companies that can supply goods and services to
infrastructure should stay aware of developments in Mexican port
privatization, highway construction, railroad services, and water
projects in particular.  There will be increasing environmental
activity in the border region.

Nature of Competition

Mexico's reforms, improved international image and roles in GATT,
the OECD, and NAFTA have greatly increased the attractiveness of
its marketplace.  Investor and consumer confidence in an
environment characterized by fiscal responsibility, sustained
economic growth, and stability has increased competition for the
acquisition of assets to be privatized, public tenders, major projects
and even the individual consumer's preference.  European and
Asian competitors are expected to expand their marketing efforts in
Mexico, and bilateral trade agreements with Chile, Columbia,
Venezuela and others in the region are likely to play a role in
market share redistribution during the next three to five years.

Of all food and agricultural imports it is estimated that the U.S.
holds about 80 percent of market share.  For consumer-ready
products the U.S. market share jumps to over 90 percent.  The U.S.
faces stiff competition from Canada in wheat and livestock genetics,
Argentina in oilseeds and vegetable oils, and Chile in fresh fruits.