MEXICO CITY -- The North American Free Trade Agreement doesn't deserve all the credit for the explosive growth of Mexico's auto industry, which has seen production more than triple since 1994.
Neither does it deserve all the blame for the flow of cheap, imported used cars that depressed the new-vehicle market here for much of the past decade.
Long before NAFTA, Mexican migrants regularly lobbied for legalization of the cars they brought in from the U.S. with temporary permits. The government offered waves of amnesty programs for work trucks mostly, since new pickups were too costly for poor farmers.
The 1994 trade pact promised sustained but limited relief, setting a legal mechanism for freer movement of new and used vehicles across the U.S.-Mexico border, said Guillermo Rosales, co-director of the Mexican Automobile Distributors Association. It called for a 2009 opening to used vehicles for a limited number of model years and allowed for safety and environmental regulations that would prevent importers from dumping substandard "junkers" on the newly opened market.
But it was the Mexican government -- in the run-up to a presidential election won by the ruling party -- that unilaterally moved up the timetable and expanded the range of model years that could be brought in, causing a tidal wave of imported used cars.
The government had "no requirement whatsoever to do so under NAFTA," Rosales said. "This was a totally unilateral decision."