Automotive industry in the NAFTA region. An analysis of value added in bilateral exports

The objective of this document is to decompose the gross value of bilateral exports of the auto-motive sector in the NAFTA region, according to the source , destination of its value added. A multi-country input-output model is utilized. The results indicate that Canada and Mexico are highly dependent on U.S. inputs to produce automotive exports while the U.S. records the highest content of domestic value-added. Besides, the U.S. has formed production chains that supply Canada and Mexico with production inputs that after processing return to the U.S. or are re-exported to third countries, whereas Canada and Mexico are limited to supplying final and intermediate goods to the U.S. Trade between the two countries is minor.