Over the past two and a half decades, Mexico has progressively integrated into the world economy and become a regional economic powerhouse. Yet, the country has the potential to realise even larger dynamic, growthenhancing gains from trade. It would benefit from developing trade flows to new destinations, especially those that can allow a greater integration with fast-growing economies. Likewise, the sophistication of export activities towards higher-valued tasks would foster productivity. In this context, the development of its services sector would offer new opportunities for trade and for the development of a knowledge-intensive economy. This requires developing strong, innovative and flexible supply chains that can feed into global specialisation and distribution systems. Here, improving competitiveness and easing regulatory barriers – notably restrictions on foreign investment and on competition in “backbone services” of the economy – is essential. This would both help promote exports of goods and services, and support the overall competitiveness of the Mexican economy