Dean Rusk Professor Lyndon B Johnson School Of Public - Industrial Strategy and Planning in Mexico and the United States

The role of industrial planning in trade is one of the most important areas of dispute between Mexico and the United States. The official U.S. stance stresses the dominance of the marketplace, while official Mexican industrial policy demands a large and active government role. Although the United States espouses free trade in theory, in practice it responds to pressures from industry and labor by imposing uncoordinated restrictions on imports and often by providing government support. Mexico, usually more thorough and coordinated in its policy, has been forced by fiscal austerity and the noncompetitive posture of its industry to reconsider past programs. The contradictions faced by these two countries often result in policies that are indistinguishable in their effect on specific industries. Analyzing overall as well as industry-specific strategies in both countries, the authors explore ways to foster cooperation in the industrial arena and to reduce the damaging effects of existing policy.

Sidney Weintraub is Dean Rusk Professor in the Lyndon B. Johnson School of Public Affairs, University of Texas, Austin.

edited by Sidney Weintraub

First published 1986 by Westview Press

Published 2018 by Routledge
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Library of Congress Cataloging-in-Publication Data
Industrial strategy and planning in Mexico and the
United States.
(Westview special studies in international economics
and business)
Includes index.
1. Industry and state--United States. 2. Industry
and state--Mexico. 3. United States--Industries--Case
studies. 4. Mexico--Industries--Case studies.
5. Mexican-American Border Region--Industries.
I. Weintraub, Sidney. II. Series.
HD3616.U47I46 1986 338.972 86-18932

ISBN 13: 978-0-367-01126-0(hbk)

The Norteamericano who conceived this volume with me died before the work could be completed. He brought distinction to it as he had during his lifetime to the study of the history of Mexico.

This volume grew out of Stanley Koss's conviction that the Mexican-United States relationship, whether political, economic, social, cultural, or the combination of all of these, need not be conflictual. Contrasting histories, unequal development, different social structures, and separate ways of approaching the wonder and challenge of life are often adduced as leading to inevitable strife between the two countries. Stanley did not think so,and the collaboration that led to this book is testimony to that conviction.

Scholars and governments are often antagonists. Scholars are critics, and government officials are defenders. This venture seeks to reconcile the two stances in the critical pursuit of knowledge to assist in the formulation of policy in both countries. Industry was chosen as the focus of the collaboration because it is a sector in which jobs must be createdespecially in Mexicoif development and social aspirations are to be met.

Stanley was a much-honored scholar. As an undergraduate at Queens College in New York City, he was named a Queens College Scholar, an honor granted only to persons from the upper two percent of the senior class. He graduated from Queens summa cum laude. He later received his Ph.D. in history from Columbia University. He once told me that his passion for Mexican history was stimulated by the great scholar of Mexican social and economic history then at Columbia, Frank Tannenbaum. I do not want this text_indent to be a curriculum vitae, but I do wish to stress how much Stanley was respected by Mexicans. He was awarded the Order of the Aztec Eagle Medallion in 1983. This is the highest honor that the government of Mexico can give to a foreign national.

Earlier in 1983 he was honored by his Mexican peers and was elected a corresponding member of the Academia M exicana de The Instituto de Investigaciones Historicas of the National Autonomous University of Mexico nominated him to receive a Doctorado Honoris, Causa shortly before he died

This book is a fitting memorial to Stanley. It represents scholarship in the service of two countries. The legacy that a teacher leaves is in the works he published, the ideas he propounded, the students he inspired, the teachers he stimulated, and the scholarly institutions he helped create. Stanley's contribution was immense in each of these ways. We at The University of Texas at Austin miss him and so do his colleagues throughout the United States and Mexico.

Sidney Weintraub
Austin, Texas

Sidney Weintraub

The Mexico-United States economic relationship is a mixture of conflict and cooperation. As trade and economic interaction between the two countries grew, so too did the conflicts; but there is also cooperation across a broad spectrum of economic activities. There is ample evidence of the cooperation. The United States is by far Mexico's most important trading partner and in recent years Mexico has become the third largest trading partner for the United States after Canada and Japan. Hundreds of U.S. companies divide their industrial production between Mexico and the United States, producing segments of final output in the country which has a comparative advantage for that part of the production. This co-production first focused on simple manufactures, like doing the hand work on textile products or the assembly of integrated circuits in Mexico, but is now proceeding in more varied production involving automobile engines, machinery, and petrochemical products. The two countries are financially linked. The level of U.S. interest rates forces changes in Mexico's economic policy, and the concern that Mexican companies and government agencies cannot meet debt obligations on time has brought about a profound change in U.S. financial regulations. When the Mexican economy was forced to slow down after 1982, as part of the medicine to correct the economic crisis, hundreds of thousands of workers in the United States were affected because Mexico could no longer buy the goods they produced.

Conflict is inevitable when two countries are so interdependent. This conflict is sharpened because this interdependence is asymmetrical; Mexico depends more on the United States than the reverse. Basic U.S. industries that are declining in output or employment, like steel, automobiles, trucks and parts, and textile products, are precisely those which are growing in Mexico. Comparative advantage is a dynamic phenomenon. The one immutable rule of economics is that change takes place constantly and is unsettling. Some gain by change, but others lose. It is not accidental that the deepest trade conflicts between the two countries are in those industries in which the change is reciprocal, in which the U.S. industry is declining in relative and even absolute importance and growing in vitality in Mexico. Governments act to help or deter this process, but the process itself is less a matter of what governments dictate than what economic efficiency mandates.