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Since the initial implementation of NAFTA (North American Free Trade Agreement) in January of 1994, the United States, Canada, and Mexico have been tightly interconnected in free trade. The low cost of labor in Mexico has been one of the primary advantages of doing business with Mexico. Aside from labor costs which ultimately drive down expenses and maximize profits, the geographical location of Mexico gives it an advantage over China when doing business with the United States. Costs of imports are significantly lower when doing business with Mexico, when compared to the product cost of having goods made and shipped overseas from China to the United States. The presence of NAFTA in the case of doing business with Mexico allows for the United States to conduct business with minimal externalities that would otherwise be present with other countries such as China, which include virtually no tariffs, a stable currency, and of course, a strong labor force that demands a portion of the wages that would be demanded elsewhere. The cost of labor in China is rapidly increasing with the wage in Mexico being only twenty percent higher than in China. Although Mexico seems favorable in some areas, the instability of their political construct may drive away the desire to conduct business within their country. The corruption and the isolated power within their society threatens the possibility of business growth and prosperity. China on the other hand, also is beneficial in terms of a similar labor cost and quality production of their goods. The major downfalls seem to lie within the proximity between the United States and China and the costs associated with importing products overseas. The absence of tariffs and other barriers to trade that Mexico has with the U.S. is also absent leaving a noticeably heightened cost of production for business between the United States and China. In sum, both China and Mexico offer favorable costs in terms of the price of production and potential of quality produced, the major difference between conducting business between these two countries is dependent on the costs associated with importing and exporting goods and tariffs and other obstructiuons to trade. 

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