North America: compelling but complex.
North America may be one of the most attractive regions in the world to do business, but it’s not without complications for those who live, work and establish commercial ventures there.
Comprising the U.S, Canada and Mexico – the first, ninth and fifteenth largest economies in the world – North America continues to stand at the centre of the world’s commercial stage. With favourable business conditions, international trade agreements and long-standing developed markets, it’s unsurprising that parts of the region continue to top rankings of attractive places to do business.
In the latest Foreign Direct Investment confidence (FID) index, compiled earlier this year, the U.S. took the top spot for the 10th year in a row, with its post-Covid economic rebound of 5.8% and $1.2 billion infrastructure bill further cementing it as an alluring commercial location for overseas investors, entrepreneurs and businesses. Canada followed shortly behind in third place, bolstered by its political and economic stability: as of 2022, the country reported a 90.09% stability ranking from the World Bank. While the third North American nation, Mexico, may not have appeared at the top of the confidence rankings – presenting a more complex commercial landscape – it remains
a thriving international economy and exciting opportunity, with an economy projected by the OECD to expand 2.1% in 2023 and newly-reformed trade links with Canada and the U.S.
In July 2020, NAFTA – the trade agreement that had shaped trade between Canada, Mexico and the U.S. for 25 years – was replaced with the USMCA. This new trade agreement was designed to create mutually beneficial trade conditions between the three nations and address some the perceived shortcomings of NAFTA. Two years into the new agreement, there are already signs that it is having a positive impact on commerce for all three countries, with cross-regional trade rising
from $166 billion to $267 billion in the first quarter of 2022. Further to the USMCA, Mexico and the U.S. are also engaged in the High Level Economic Dialogue: an ongoing commitment by the two nations to foster prosperity and technological progress.
In a time of so much international uncertainty – political, geographical, and economic – trusted, developed markets like North America are often preferential to more volatile developing markets. Yet they, too, are not without challenges and uncertainties. The rapid pace of technological change
continues to reshape the way we live and work worldwide, and North America is no exception. Combined with an ongoing focus on environmental and social factors in the business landscape,
as well as increased global mobility, new regulations and expectations are arising as the result of a transforming world: from shifting work from home rules to laws promoting more fairness and equality in society and, specifically, workplaces. The social, cultural and legal impact of these changes are positive, but in some cases need careful legislative navigation and understanding by businesses looking to enter the market.
“It’s unsurprising that parts of the region continue to top rankings of attractive places to do business.”
uptick in remote working also presents taxation, employment and IP issues, with some regions across the three countries presenting a more friendly prospect for employees and employers alike.
Overall, the region seems to present a positive opportunity for foreign direct investment, with 69% of respondents to the 2022 FDI survey in the Americas expressing optimism in their market.
In the following publication, IR Global members in the U.S, Canada and Mexico share their expertise on some of the most pressing issues in their jurisdiction. From the broad-sweeping
impact of international geopolitical events to specific legislative changes that effect inhabitants on a more personal level, they cover a broad range of topics to provide insight into the commercial landscape of North America.