ABSTRACT
Mexico enjoys many of the advantages of a large developing country in producing steel. Relatively low wage rates, a large industrial work force, growing internal demand for steel, and easy access to raw materials and competitive technology make it an excellent location for steel production. Mexico has sought to offset the sharp decline in its internal demand for steel by increasing its exports to the United States, but US producers have successfully repulsed the Mexican exporters with trade suits that argue that subsidized Mexican firms are unfairly injuring US companies. There is a widespread view that the current problems in the world steel industry will dissipate once demand growth is restored and capacity is rationalized to more closely approximate current and future demand. No one can doubt the importance of excess capacity in the post-1974 world steel industry. Prior to 1960, the world steel industry was composed of essentially noncompeting national industries.
