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.
