Does Mexico Specialize in Polluting and Injurious Industries? Empirical Evidence from NAFTA-related US-Mexican Trade Expansion

Trade expansion along with weaker environmental protection in developing countries has raised concerns that developing countries have specialized in the more polluting and injurious industries. I examine the pollution intensity of the NAFTA-related expansion in US-Mexican bilateral trade in the manufacturing sector using new detailed measures of air, water, metal and toxic pollution intensities and injury rates at the 4-digit Standard Industrial Classification level. Based on this resolution of pollution and injury measures, I do not find strong evidence of greater growth in the shares of US net imports from Mexico in the more polluting or injurious industries between the pre and post-NAFTA periods. *Dept. of Economics, MIT. I thank Dora Costa and Steve Pischke for comments, David Wheeler and Randy Becker for information on the IPPI project and the concordances, respectively. The Center for International Studies and the Center for Environmental Initiatives Martin Fellowship for Sustainability provided financial support for the 2000-2001 academic year. Errors are mine. Please send comments to [email protected].