Trade and Environment Regimes in Operation: The North American Auto Industry
Beyond the realms of dispute settlement, management, and prevention lie the instruments for regulatory communication, capacity building, convergence, and coalition building offered by the new NAFTA regime. As the centre of the new era of complex institutional responsiveness, it offers improved mechanisms to combat environmental regulatory protectionism when conflicts erupt between firms, governments, and environmental non-government organizations ( ENGOs). Equally importantly, the NAFTA regime provides instruments of proactive cooperation, aimed at reducing regulatory barriers before conflicts arise. These create a wider regulatory regime that directly strengthens firms' competitiveness through international commerce, while simultaneously protecting and enhancing the natural environment.
The activities of firms and governments in the North American automotive industry in the lead-up to, and during the first five years of operation of, NAFTA show many of these new cooperative instruments being created and employed. The variety and vigour with which automotive firms are mobilizing these instruments reflect the fact that the conditions of complex institutional responsiveness are most advanced in this sector. The 'big three' North American assemblers built on the highly integrated regional production system they first constructed in the 1960s across the US-Canadian border, to move towards partnerships on a global scale, as the 1998 Chrysler-Daimler Benz merger shows. It is in this industry that many of the new techniques of just-in-time inventory and lean production were first pioneered.
Automobiles, and their impacts on the atmosphere through emissions from their operation, have long been at the forefront of the move to more stringent environmental regulation in North America, Europe, and Asia ( Vogel 1995). As the dominant industry sector in the North American manufacturing economy, the automotive industry is the subject of many of the most important changes in the new NAFTA regime.
The firms in the North American automotive industry have focused their energies in the post-NAFTA era on the highly cooperative end of the array of instruments that complex institutional responsiveness allows. Firms have not primarily looked to national governments to settle, manage, or prevent their international disputes, nor even to NAFTA's intergovernmental institutions to assist in this process or lead the way in regulatory convergence. Rather, the firms have preferred anticipatory private