Mexico's manufacturing sector has grown more sophisticated since the 1994 enactment of the North American Free Trade Agreement. Manufacturers now produce higher value-added products, such as automotive, aeronautical and electronic products, and they are doing so in factories outside their traditional production region: the U.S.-Mexico border. As the country's economy has grown, a secondary manufacturing core has emerged in the central lowlands, also known as the Bajio, which includes Aguascalientes, Guanajuato, Queretaro and San Luis Potosi states. Total foreign direct investment in the Bajio increased from $7.2 billion in 1993-2002 to $16.3 billion in 2003-2012. By comparison, foreign direct investment in the border states over the same period increased from $32.9 billion to $55.2 billion. Located near the bulk of Mexico's educated workforce, the Bajio is safer than many border towns and is now connected more efficiently to suppliers in the United States and Asia and consumers in the United States and Canada. Notably, the overall amount of manufactured exports from the Bajio is still far lower than that of the border. However, the number of manufacturing firms and the amount of foreign direct investment are increasing at a faster rate in the Bajio than in the border states. The manufacturing sector in this region will grow in importance in the years to come, though it will not replace the border region entirely.
