Intra-Industry Specialization in United States-Mexico Trade

This paper uses changes in intra-industry specialization indicators to assess factor adjustment pressures that may have been experienced by U.S. industries as a result of growth in U.S.-Mexico trade over the North American Free Trade Agreement (NAFTA) implementation period. Many industries experienced large increases in intra-industry trade. Few U.S. industries were candidates for significant factor adjustment pressures. Industries facing adjustment pressures accounted for nineteen percent of total U.S. imports from Mexico. Findings should lessen opposition to the North American Free Trade Agreement and future regional integration initiatives in the Western Hemisphere by easing fears that jobs will disappear.