WHEN Mexicans allude to the lingering aspects of dependency, they generally focus on two economic themes: the extent and industry composition of U.S. direct investment in Mexico and the dominance of the United States in Mexico's foreign trade. When the two heads of state get together, one item on the agenda usually deals with U.S. protectionism--both actual restrictions, such as on textiles and apparel, and the threat of restrictions, such as on fresh tomatoes and other vegetables. This chapter will examine the current bilateral trade structure and analyze the justification for Mexico's trade complaints. If there were a movement toward free trade between the two countries, U.S. trade restrictions against Mexico would disappear gradually. But so would Mexico's restrictions against imports from the United States, which are more extensive; that, of course is the core of Mexico's resistance.
Trade between Mexico and the United States grew substantially in recent years (tables 3-1 and 3-2) until 1982, when Mexico was forced to limit imports in order to meet a balance-of-payments crisis. U.S. imports from Mexico increased by an average of 36.5 percent a year in current dollars, or by 24.4 percent in 1976 dollars, from 1976 through 1980. U.S. exports to Mexico during the same period grew by an average of 32 percent a year in current dollars and by 20.3 percent in constant 1976 dollars. In 1976 Mexico was the third largest market for U.S. merchandise exports, after Canada and Japan, and remained third in 1980. Mexico grew from being the sixth largest supplier to the United States of merchandise imports in 1976 to the third in 1980, after Canada and Japan.