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boss, who was an extraordinary academician and executive, was female and we already had one other senior female vice president on the team.

FORMALITY

Mexicans can be very flexible in accommodating those in business with whom they have achieved a comfort level. However, when it comes to documenting the transaction, particularly if it is in a regulated industry in which Mexican governmental agencies will become involved, the documentation must fit precisely into the accepted practice. Innovation on that score is simply not part of the equation. Accordingly, as you negotiate, you should bear in mind how you are going to express this and try to assure that you can fit it within the parameters of the Mexican system, hopefully assisted in that vein by experienced counsel.

Be aware also that direct confrontation is not the Mexican way. If they have bad news to deliver to you or if they don’t agree with a fundamental position that you have taken, the odds are that you will not hear it during the face-to-face meeting, but rather by subsequent written correspondence. Obviously, the lesson is that you should not take at face value everything you hear during meetings.

HISTORICAL EXPLOITATION

Rightly or wrongly, the Mexicans are particularly sensitive as to what they perceive to have been historical exploitation of Mexico by the United States. Accordingly, you need to guard your language in both oral and written communications, including presentations, proposals, and contracts, in such a way as to show respect for Mexican nationalism and culture. This can be tedious, but it is fundamental and nothing will break down negotiations in Mexico quicker than the all-too-prevalent American habit of believing that the rest of the world must do things in the same manner as we do.

A corollary is that economic development drives the train in Mexico. This is a country that will move mountains for you, including finding ways to remove regulatory or other impediments, if they are convinced that you will provide good-paying and long-term jobs to Mexican citizens. They will be less enthused if you just want cheap labor that you are able to quickly replicate in another country if you find a better labor price point there. They are interested in deals that will tie you to Mexico and tend to view deals for cheap replaceable labor as less desirable and, in some cases, a continuation of historical exploitation.

MISCELLANEOUS

There are a few other points that you should bear in mind in negotiations in Mexico.

· Foreign Investment Act Restrictions: You should ascertain early on what restrictions the Foreign Investment Act imposes. You can get a waiver in some cases, but otherwise, you can only obtain minority ownership in many Mexican entities that you might want to form as a subsidiary.
· Labor: The rules are very different. Once hired, it is particularly difficult to terminate Mexican members of your workforce economically. Think about forming a subsidiary or allowing your Mexican business partner to employ the labor.
· Language: Don’t underestimate the language barrier. Many senior executive and government officials in Mexico are not comfortable in English and may not share that with you. Better to be prepared to conduct the entire meeting in Spanish with an