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Home > Data & Research > Research > Programs > Trade Research

Who determines Mexican trade policy?, Volume 1

Author:	Grether, Jean-Marie; de Melo, Jaime; Olarreaga, Marcelo;	Collection Title:	Policy, reseach working paper ; no. WPS 2187
Country:	Mexico;	Date Stored:	2001/04/25
Document Date:	1999/09/30	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	(Historic)Economic Policy
Region:	Latin America & Caribbean	Report Number:	WPS2187
Sub Sectors:	Trade	SubTopics:	Environmental Economics & Policies; Foreign Direct Investment; Payment Systems & Infrastructure; Economic Theory & Research; Banks & Banking Reform; Trade Policy; Free Trade; Trade and Regional Integration
Volume No:	1

Summary: Using a political economy approach, the authors analyze the pattern of protection in Mexico's manufacturing sector during the period of trade policy reforms (1985-89), when Mexico experienced significant trade liberalization and an important inflow of foreign direct investment. They take into account the potential effect of foreign direct investment on endogenous tariff formation. It turns out that the data support this analytic approach, in which the formulation of trade policy reflects political support, and in which the presence of foreign direct investment in the sector strongly affects the pattern of tariff protection before and after reform. In Mexican manufacturing, especially, sectors with heavy foreign direct investment received greater protection in import-competing sectors, although the move toward greater openness was associated with a reduction in the influence of industrial and foreign-investor lobbying.


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	PDF 39 pages	WPS2187	0.27

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