Soumaya Keynes of The Economist and PIIE Senior Fellow Chad P. Bown discuss the evolution of the auto industry in North America. Long before the 1994 North American Free Trade Agreement (NAFTA), the 1965 Canada-US Auto Pact, Mexican maquiladora program, OPEC-induced oil shocks, voluntary export restraints on Japan, and changing consumer preferences shaped the auto industry. NAFTA led to new cross-border supply chains and geographic clusterings in the American “auto alley” as well as in Mexico, affecting hundreds of thousands of North American jobs.