Who determines Mexican trade policy?

Using a political economy approach, we analyze the pattern of Mexican manuf acturing tariff protection during the period of trade policy reforms. Betwe en 1985 and 1990, Mexico experienced both important inflows of foreign dire ct investment (FDI) and a significant trade liberalization. The approach in corporates the effects of FDI lobbying on tariff formation. Results support the proposed approach in which the presence of FDI has a strong influence on the determination of the pattern of protection. FDI-intensive sectors te nded to be 'over-protected', though the move towards greater openness was a ssociated with a reduction in the influence of FDI lobbying. (C) 2001 Elsev ier Science B.V. All rights reserved.