TY  - JOUR
AU  - Berry,Steven
AU  - Grilli,Vittorio
AU  - Lopez-de-Silanes,F.
TI  - The Automobile Industry and The Mexico-Us Free Trade Agreement
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4152
PY  - 1992
Y2  - August 1992
UR  - http://www.nber.org/papers/w4152
L1  - http://www.nber.org/papers/w4152.pdf
N1  - Author contact info:
Steven T. Berry
Yale University Department of Economics
Box 208264
37 Hillhouse Avenue
New Haven, CT 06520-8264
Tel: 203/432-3556
Fax: 203/432-6323
E-Mail: steven.berry@yale.edu

Florencio Lopez-de-Silanes
EDHEC Business School
393, Promenade des Anglais BP 3116
06202 Nice Cedex 3
France
Tel: +33 (0) 4 93 18 78 07
Fax: +33 (0) 4 93 18 78 41
E-Mail: Florencio.lopezdesilanes@edhec.edu
M2  - featured in NBER digest on 1992-11-01
AB  - This paper considers the likely effect on the automobile industry of a free trade agreement between the U.S. and Mexico. As there are currently large restrictions on imports into Mexico, one important outcome of a free trade agreement would be the opening of the Mexican market to U.S. producers. This is consistent with the history of the international auto industry and the fact that the U.S.-Canada Auto Pact opened a new, large market to U.S. manufacturers. The current state of the Mexican auto industry is considered in great detail, suggesting that the Mexican industry will continue to prosper, increasing output but also relying heavily on production from U.S. owned plants and on inputs imported from the U.S. and Canada. However, much of the existing domestically oriented industry is likely to be replaced by other North American producers. Finally, an econometric demand analysis implies that economic growth together with declines in prices to world levels could rapidly expand the size of the Mexican auto market. The free trade agreement represents an opportunity for product diversification and rationalization in the auto industry.
ER  -