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U.S. manufacturing and an emerging Mexico


  • Leamer, Edward E.


This paper offers a vision of the future of trade in manufactured products between Mexico and the United States. This vision is formed from a study of the 1970 and 1985 trade patterns of OECD countries. The vision accounts directly for the proximity of Mexico and the United States, and also for the continuing wage gap between Mexico and the United States. The vision accounts indirectly for the declining level of trade barriers and for the technological improvements that are probable in a liberalized Mexico. Based on the OECD trade patterns, an emerging Mexico will present U.S. export opportunities that are a significant fraction of current U.S. production of transportation equipment, chemicals and machinery. But Mexican exports are likely to displace a substantial amount of U.S. production of apparel, footwear, pottery and leather products. This vision which is formed using 1985 data does not offer an entirely accurate description of the changes in trade between Mexico and the United States that have occurred between 1985 and 1992. It is possible that the vision is defective, but it is also possible that the Mexican liberalization is incomplete, is in its infancy, and is still under serious threat of reversal.
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Suggested Citation

  • Leamer, Edward E., 1993. "U.S. manufacturing and an emerging Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 4(1), pages 51-89.
  • Handle: RePEc:eee:ecofin:v:4:y:1993:i:1:p:51-89

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    References listed on IDEAS

    1. Baldwin, R E & Murray, Tracy, 1977. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP," Economic Journal, Royal Economic Society, vol. 87(345), pages 30-46, March.
    2. Gary Clyde Hufbauer & Jeffrey J. Schott, 1992. "North American Free Trade: Issues and Recommendations," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 71, January.
    3. Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015. "The New Regionalism: A Country Perspective," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 14, pages 323-357 World Scientific Publishing Co. Pte. Ltd..
    4. Pomfret, Richard, 1993. "Measuring the effects of economic integration on third countries: A comment on Kreinin and Plummer," World Development, Elsevier, vol. 21(9), pages 1435-1437, September.
    5. Brown, D.K., 1992. "The Impact of a North American Free Trade Area: Applied General Equilibrium Models," Working Papers 311, Research Seminar in International Economics, University of Michigan.
    6. Pomfret, Richard, 1986. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP: A Comment," Economic Journal, Royal Economic Society, vol. 96(382), pages 534-536, June.
    7. Kreinin, Mordechai E. & Plummer, Michael G., 1992. "Effects of economic integration in industrial countries on ASEAN and the Asian NIEs," World Development, Elsevier, vol. 20(9), pages 1345-1366, September.
    8. Gary Clyde Hufbauer & Jeffrey J. Schott, 1994. "Western Hemisphere Economic Integration," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 75, January.
    9. Richardson, Martin, 1993. "Endogenous protection and trade diversion," Journal of International Economics, Elsevier, vol. 34(3-4), pages 309-324, May.
    10. repec:fth:michin:311 is not listed on IDEAS
    11. Gary Clyde Hufbauer & Jeffrey J. Schott, 1993. "NAFTA: An Assessment, Revised Edition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 70, January.
    12. Kreinin, Mordechai E. & Plummer, Michael G., 1993. "A reply to Richard Pomfret's comment," World Development, Elsevier, vol. 21(9), pages 1439-1439, September.
    13. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
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    Cited by:

    1. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    2. Vêlayoudom Marimoutou & Denis Peguin & Anne Peguin-Feissolle, 2009. "The "distance-varying" gravity model in international economics: is the distance an obstacle to trade?," Economics Bulletin, AccessEcon, vol. 29(2), pages 1139-1155.
    3. Edward E Leamer & Michael Storper, 2001. "The Economic Geography of the Internet Age," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(4), pages 641-665, December.
    4. Magerman, Glenn & Studnicka, Zuzanna & Van Hove, Jan, 2016. "Distance and border effects in international trade: A comparison of estimation methods," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 10, pages 1-31.
    5. Buch, Claudia M. & Kleinert, Jorn & Toubal, Farid, 2004. "The distance puzzle: on the interpretation of the distance coefficient in gravity equations," Economics Letters, Elsevier, vol. 83(3), pages 293-298, June.
    6. Juliette Milgram, 2003. "Quantitative Restrictions on Clothing Imports: Impact and Determinants of the Common Trade Policy Towards Developing Countries," Economic Working Papers at Centro de Estudios Andaluces E2003/04, Centro de Estudios Andaluces.

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