The role of industrial planning in trade is one of the most important areas of dispute between Mexico and America. The official U.S. stance stresses the dominance of the marketplace, while official Mexican industrial policy demands a large and active government role. Although America espouses free trade in theory, in practice it responds to pressures from industry and labour by imposing uncoordinated restrictions on imports and often by providing government support. The contradictions faced often result in policies that are indistinguishable in their effect on specific industries. Analysing overall, as well as industry-specific strategies in both countries, the authors explore ways to foster cooperation in the industrial arena and to reduce the damaging effects of existing policy.