Catalan Incorporated (CI) is based in the US and wants to sell its products in Mexico. Because of USMCA, there is no tariff on the products it manufactures in the US. CI currently exports its products to Mexico, and they make a good profit from the products they sell there. Because of the lower labor rates and lax regulatory environment in Mexico, CI is considering opening a manufacturing plant there to supply the Mexican market. The Mexican economy is known for its instability and its government is highly corrupt. Should CI consider opening a manufacturing plant in Mexico? Or, should CI continue to export its products? What other mode of entry might you recommend? If so, why? Explain your answer in detail.
