President Andres Manuel Lopez Obrador has launched an ambitious plan to stimulate economic activity on the Mexican side of the US-Mexico border despite recent US threats to close the border entirely.
Mexico plans to slash income and corporate taxes to 20 per cent from 30 per cent for 43 municipalities in six states just south of the US, while halving to 8 per cent of the value-added tax in the region.
Business leaders and union representatives have also agreed to double the minimum wage along the border, to 176.2 pesos a day, which is the equivalent of $9.07 at current exchange rates.
Lopez Obrador said that the idea is to stimulate wage and job growth via fiscal incentives and productivity gains. President Donald Trump has repeatedly complained that low wages in Mexico lure jobs from the US.