The political economy of protectionism: Antidumping in the Mexican-U.S. trade relationship

The world trade system is subject to two competing forces: one for more open trade with less tariff and investment barriers and the other for more protection. This tension is explained by the fragmentation of domestic political alliances in western nations, including one cluster demanding protection because of its exposure to international competition brought about by greater integration and interdependence, and another demanding liberalization because of its integration into new global patterns of production and distribution. In the end, the future of the trade interaction will depend on which of these two sets of alliances is triumphant.; Antidumping is by far the preferred instrument among those groups demanding protection and those supplying it (governments). In the last two decades antidumping demand and supply has increased sharply in several key countries, for example, the United States, Australia, the European Community, Canada, and Mexico. Antidumping, therefore, is a real menace to free trade and growth.; This thesis documents how and why antidumping has become the preferred instrument for protection in Mexico and the United States. It also documents the significant biases in the regulations and the administration of the antidumping investigations.; By comparing the U.S. and Mexican regulatory frameworks the thesis shows areas where there is room for negotiation between the two governments. This point is of particular interest given the on-going negotiations for a North American Free Trade Agreement.; Based on an inductive approach the thesis develops a comparative analysis of the trade policy-making processes of the two countries to explain how lobbying, negotiation and pressure-group politics take place in both countries.; Building from the thesis's theoretical and empirical framework, it makes policy recommendations, first to change the antidumping regulatory frameworks in both countries to make them less biased against foreigners; second, to change the international antidumping regulatory frameworks; and finally to take specific steps to eliminate or substitute antitrust regulations for antidumping ones. In terms of pressure-group politics, the thesis also suggests specific ways to exert pressure and to form successful strategic alliances for free trade.