The Prospects for Mexico in the North American Automotive Industry: A Global Value Chain Perspective

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Abstract:

This paper considers the prospects for Mexico’s automotive industry as it has evolved, especially since the signing of the North American Free Trade Agreement (NAFTA) in 1994, in the context of these nested and highly dynamic global and regional value chains.  We find that the fate of an industry in a small, regionally embedded country like Mexico is tied to factors that lie largely outside the control of the state or of local firms.
Ironically, the flagging prospects of the Big 3 automakers have created more risks for Mexico and Canada than it has for the United States.