The politics of strategic trade: South Korea and Mexico in a comparative perspective

This thesis examines the applicability of the theoretical framework of strategic trade to the export-led growth of the automobile industry in South Korea. The study focuses on four areas. First, the "new" theory of international trade is elaborated in order to identify the “prerequisite” industrial characteristics under which policies of strategic trade are theoretically advantageous. Secondly, the development of the automobile industry in South Korea is analyzed. The focus is on examining the role of the state in initiating industrial and trade policies that specifically targeted the automobile sector. This thesis argues that strategic trade is a valid analytical framework in the case of the South Korean automobile industry. Thirdly, the development of the automobile industry in South Korea is compared with that of Mexico. The comparative perspective helps highlight several factors that may have helped make policies of strategic trade effective in the South Korean case. These factors include a virtual absence of transnational corporations and domestic industrial conglomeration in the South Korean automobile industry. Finally, based on the possible critical importance of these factors for policy implementation and outcomes, the thesis ends with a discussion on the relevance of strategic trade as a model for economic development.