Mexico's Competitive Advantage in NAFTA: A Case of Social Dumping? A View from the Automotive Industry

Alex Covarrubias

Abstract


 In the midst of NAFTA renegotiations, the Mexican Automotive Industry (MAI) draws more attention. Gaining a progressive share of the markets, jobs, and portfolio investments within the region and accounting for the entire U.S. trade deficit, the MAI is one of the most critical pieces towards the definition of a new NAFTA. This and the fact that Trump has criticized MAI as an example of the wrongdoings of the old agreement calls for new contributions to better assess the sources of MAI’s competitive advantage. This paper builds on business and investment cycle theories as well as socioeconomic perspectives of market-embedded institutions to provide an additional window to study the MAI. It articulates theory and extensive primary and secondary evidence to demonstrate that the MAI position rests on social dumping policies underpinning illegitimate sources of competitive advantage. 


Keywords


NAFTA; Automotive Industry; Labor; Social Dumping; Renegotiations;

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DOI: http://dx.doi.org/10.22201/cisan.24487228e.2019.1.340

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