An Empirical Estimation of the Level of Intra-Industry Trade between Mexico and the United States

This paper presents an evaluation of the level of intra-industry trade between Mexico and the United States. The calculated indexes of intra-industry trade indicate a rapid increase in this type of trade during the 1982-1990 period. Additionally, the current level of intra-industry trade between these nations is quite high when it is compared to similar indexes of other nations. These results help to explain the apparent ease of adjustment to expanded Mexican exports to the U.S. during the 1980s. Furthermore, the high level of intra-industry trade indicates that after the NAFTA is implemented, there should be no major dislocation of productive activities in these countries as a result of the expansion in trade.

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