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Title: Barring the Backdoor: Rules of Origin in a North American Free Trade Area

Authors: James K. Weekly

Addresses: Author address listing can be found in the "About the Authors" section at the end of the article.

Abstract: The prospect of establishing a North American Free Trade Area (NAFTA) has raised serious concerns regarding the so-called 'backdoor' problem. With regard to NAFTA, the fear is that foreign companies -- particularly companies from Japan and the Asian newly industrialized companies (NICs) -- will utilize Mexico as an assembly site or distribution center to 'sneak' their products into the United States market. Rules of origin have constituted the major defense against such incursions. However, there are many difficulties in applying and enforcing those rules, and those difficulties may be compounded by differing interests among the countries participating in a free trade agreement. This paper explores the backdoor issue as it pertains to a free trade arrangement between Mexico and the United States.

Keywords: NAFTA; foreign companies; free trade; NIC; rule of origin; backdoor issue.

DOI: 10.1504/JBM.1993.140988

Journal of Business and Management, 1993 Vol.1 No.1, pp.6 - 21

Published online: 05 Sep 2024 *