ABSTRACT
As already suggested in the introductory chapter, structural rules that set the range of policy or strategic options apply equally for firms and States. In order to advance their own objectives, governments use their authority to negotiate and renegotiate basic rules of production and competition with firms and other governments in a triangular diplomacy dynamic, thereby also shaping the characteristics of the industry structure in each national setting. Mass production favored free trade, which enhanced efficiency and reduced the risks involved in foreign production, but many countries used tariff protection as a means to develop a national automotive industry.
