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11. The Politics of Trade in North America: Comparing Models and Industries

Author:
Arturo Borja Tamayo, Philippe Faucher, Scott Morgenstern, and Daniel Nielson
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This working paper studies the negotiations of the North American Free Trade Agreement (NAFTA) in two industrial chains: textile-apparel and auto parts-automotive. It compares two theoretical models. The first uses two internal variables (interest group strength and industry competitiveness) to explain the tariffs that were negotiated for the phase-out period of NAFTA. The second explores alternatives to increase the explanatory capacity of two-level games models. It incorporates the element of asymmetry between countries, and questions Putnam's (1988) hypothesis on the impact of domestic politics upon international negotiations. This second model explains the difference in the rules of origin that were adopted in NAFTA for the two industrial chains. The work reaches three conclusions. First, it confirms the necessity to specify different dependent variables to explain the outcomes of international trade agreements. Second, it concludes that a model using the two-level logic has explanatory advantages over one that does not combine levels. Third, it points out the potential to combine elements from the two models to reach a more complete explanation.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
North America

12. Government - Financial Sector Relations and the New Financial Structure in Mexico

Author:
Charles W. Parker III and Susan Minushikin
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
For the first time in its modern history, Mexico is confronting a financial sector that is controlled by foreign investors. At the same time it is highly concentrated. The economic challenges that such an industry structure presents were the focus of public debate over the sales of Bancomer and Banco Serfin. The political challenges have not yet become a part of the public debate. These include changing relations between the banks and the government. This paper traces the history of government-bank relations and speculates on how this relationship may change given the new structure of Mexico's financial sector.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
North America and Mexico

13. El TLCAN y la Inversióon Extranjera Directa: El Nuevo Escenario

Author:
Arturo Borja
Publication Date:
01-2000
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This working paper looks at the changes that have taken place in North America in foreign direct investment (FDI) after NAFTA. The first part analyses the regime defined in the treaty. The main four principles of this regime are: "national treatment", the prohibition of performance requirements for investors, a more liberal norm for foreign ownership of firms, institutional procedures for the solution of disputes. The rule of origin is identified as the most important measure for non-North American investors. The second part offers an empirical evaluation of changes in FDI flows during the first five years of NAFTA. It compares that period with the five years previous to the implementation of the agreement. The findings show a significant increase in FDI going to Mexico, Canada and the United States. At the same time, there have been changes in the distribution of these flows within the region. More FDI is going now to the United States than to Mexico, and investments between Canada and the U.S. are growing at a higher rate than those between Mexico and the U.S. The paper also identifies different patterns between Mexico and Canada. The increases in Canadian investments suggests that Canadian multinationals are adapting their strategies to the new conditions created by NAFTA.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States, Canada, North America, and Mexico

14. International Explanations for Stock Market Opening

Author:
Susan Minushkin
Publication Date:
01-2000
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
Most studies on financial market liberalization focus on wealthy countries, emphasizing international, economic or domestic political factors as explanations for financial liberalization or have specified the conditions under which one factor dominates in causal significance. They have not tested whether their arguments are applicable to the middle-income countries that comprise the 'emerging markets.' Focusing on these countries, this paper seeks to isolate and test a series of propositions derived from international approaches. The main contribution of this article is to provide some first-cut testing of the existing hypotheses, as a guide for other researchers in terms of the timing, pace and style of financial opening in middle-income countries.
Topic:
International Relations, Economics, Emerging Markets, and International Trade and Finance

15. Coping with US-Mexican Interdependence: The NAFTA Response

Author:
Miguel Ángel Valverde
Publication Date:
01-1999
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This paper examines the theoretical discussion on interdependence, and its use for analyzing U.S.-Mexican economic relations. It combines interdependence's premises with other perspectives on the position of the North American economies in the global marketplace, arguing that NAFTA is an institutional response to these developments.
Topic:
International Trade and Finance and Treaties and Agreements
Political Geography:
United States, Central America, North America, and Mexico

16. Theoretical Explanations of Trade Competitiveness and a North American Application

Author:
Imtiaz Hussain
Publication Date:
01-1998
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
How do we reconcile economic competitiveness with trade regionalism? This exploratory investigation first takes stock of how competitiveness has been defined by both economists and political scientists, then extracts an inclusive model from the different literatures, and finally broadly assesses business transactions and trends across North America using that model. Beginning with the Ricardo-Viner and Hecksher-Olin explanations, various types of competitiveness articulated by Michael Porter, Mancur Olson, and David Mares are subsequently brought in. preliminary findings presented as hypotheses for future testing, suggest that: that evaporation of hegemony has resulted in multiple claims to competitiveness across North America, policy convergences are more widespread and common than ever before, regional-level cooperation provides an efficient means for all three countries to offset global competitiveness, and domestic interests, though still a potential veto force, are slowly embracing, rather than opposing, supranational efforts.
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
Europe and North America

17. Agriculture and Supranationalism: A Comparative Study on North American and West European Policy-Making Experiences

Author:
Imtiaz Hussain
Publication Date:
01-1998
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
The proliferation of regional trading blocs in the 1990s raises a fundamental question: To what extent is policy-making shifting from the national government to a regional entity? The conversion of GATT into the World Trade Organization, also in the 1990s, further complicates the search for an answer since new or revitalized multilateral rules also exert influences upon policy outcomes. I apply that question to a study of farm policy, with the European Union and the North American Free Trade Agreement (NAFTA) as my cases. The next two sections profile the importance of agriculture and my rationale in selecting the two cases before pointing gout the organization of the remainder of the study.
Topic:
Agriculture and International Trade and Finance
Political Geography:
Europe and North America

18. Dispute Settlement, Domestic Institutions and Political Integration in North America: A Comparative Study

Author:
Imtiaz Hussain
Publication Date:
01-1998
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
Created to cultivate interaction between domestic and supranational economic arrangements/institutions, the North American Free Trade Agreement is in increasing need of arrangements/institutions which bridge political boundaries as well. The document's binational panels, for instance, have been authorized to review domestic duty determinations, but have also dragged domestic political practices, customs, arrangements, and institutions into the supranational arena, in turn exposing potentially deep differences across national boundaries. A comparative study of both basic and complex domestic political structures, affected directly or indirectly by NAFTA's dispute settlement procedures, reveals: that as reciprocal relationships increase, arrangements and/or institutions at both levels, domestic and supranational, become more vulnerable; and that different experiences across national boundaries may produce uneven degrees of integration. These findings lead to an explorative assessment of political integration stemming form the economic integration currently underway.
Topic:
International Relations, International Trade and Finance, and Politics
Political Geography:
North America

19. Coping with US - Mexican Interdependence: The NAFTA Response

Author:
Miquel Ángel Valverde
Publication Date:
01-1997
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This paper examines the theoretical discussion on interdependence, and its use for analyzing US-Mexican economic relations. It combines interdependence's premises with other perspectives on the position of North American economies in the global marketplace, arguing that NAFTA is an institutional response to these developments.
Topic:
Economics, Globalization, and International Trade and Finance
Political Geography:
United States, North America, and Mexico

20. The Politics of NAFTA: Presidential use of Side Payments

Author:
Miquel Ángel Valverde
Publication Date:
01-1997
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
In June 1990, President George Bush and Mexican President Carlos Salinas de Gortari announced their intention to begin negotiating a free trade agreement. Canada joined the negotiations the following August. The proposed North American Free Trade Agreement (NAFTA) provoked an intense lobbying campaign in the US Congress, in what became a major political battle for its congressional approval. Some economic interests would win, others would lose with NAFTA. Congress members were worried about the loss of American low-skilled jobs and environmental issues. Regional interests were voiced loudly in the House of Representatives. A loose coalition of interest groups, including the AFL-CIO, public interest groups, and environmental organizations, coordinated opposition to the agreement. On the pro-NAFTA side was an ad hoc group of corporations, labeled USA-NAFTA, which included the National Association of Manufacturers and the US Chamber of Commerce. The Mexican government mounted an extensive lobbying campaign in favor of the trade pact. After intense congressional lobbying, President Bush obtained fast-track negotiating authority for NAFTA. Negotiations concluded in August 1992, and the following December, Presidents Bush and Salinas, as well as Canada's Prime Minister Mulroney, signed the pact, Presidential candidate Bill Clinton, under intense pressure from key constituencies of the Democratic Party, supported NAFTA "in principle," but only if complementary agreements on labor and environmental issues were included. Once in the office, Clinton negotiated these "side agreements" with Mexico and Canada, but still, strong opposition to NAFTA continued. In order to win congressional votes needed for the pact's approval, President Clinton engaged in a series of political compromises or "side-payments" with legislators, being able to form a congressional bipartisan coalition that allowed NAFTA passage.
Topic:
Economics, International Trade and Finance, and Politics
Political Geography:
United States, Canada, North America, and Mexico