Why have some American companies relocated to Mexico since the North American Free Trade Agreement (NAFTA)?

Question

Responses

a Resources are more plentiful in Mexico.
a Resources are more plentiful in Mexico.

b Tariffs are higher in Mexico.
b Tariffs are higher in Mexico.

c Labor is less expensive in Mexico.
c Labor is less expensive in Mexico.

d Workers are better educated in Mexico.

Answer 1

The most accurate response to why some American companies have relocated to Mexico since the North American Free Trade Agreement (NAFTA) is:

c Labor is less expensive in Mexico.

The primary motivation for many companies to relocate to Mexico involves the significant cost savings associated with lower labor costs. NAFTA also facilitated easier trade and reduced tariffs between the U.S., Mexico, and Canada, making it more attractive for American companies to move production to Mexico.