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Trade of car parts in the NAFTA area
Submitted by Francisco Javier García Pando, Universidad Nacional Autónoma de México on 31 mars 2016 - 16:17
Type de publication:Conference Paper
Source:Gerpisa colloquium, Puebla (2016)
Mots-clés:automobile industry, Canada, Car parts, Mexico, NAFTA, United States
Car parts are essential for the automobile industry. The location of production facilities is linked to the location of car assembly plants. The NAFTA (North America Free Trade Agreement) has given way to a significant reduction on tariffs, which has allowed the import and export of car parts under favorable circumstances. Car manufactures have changed their production strategies, which have posed a challenge to their suppliers. They have also taken similar strategies to avoid cost increases. This has also meant the creation of clusters and car production regions after the 2008 crisis.
The aim of this paper is to study the development of the automobile components trade toward the USA market from its commercial partners; Canada and Mexico. The former country is the main partner of the automobile industry in Mexico and in Canada. Due to partnership condition established in the NAFTA, it could be inferred that the two countries participate as such. While developing this document, it was discovered that the specialization areas created in both countries before the 2008 crisis have experimented some changes; some of them can be taken as competition to supply the American market, while others are examples of taking advantage of the capacities and the facilities created before. This means that car part makers are creating new strategies to continue in the market.
In order to carry out this study, the methodology provided by the USITC (United States International Trade Commission) was followed through its Interactive Tariff and Trade DataWeb. Trade Tariffs are studied according to the Harmonized Tariff System, aimed at having a clear view on which components are supplied from each country, the dynamics, and their development. To compare the trade structure of Mexico and Canada, the export similarity index is used.