Mexico bans U.S. cars

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Mexican lawmakers enacted a new law last week that only permits American-made cars built in 1998 to be imported to Mexico from the United States.

The ban was put in place after Mexican car dealers said that cars brought in from the United States limit their sales. Melissa Birch, an associate professor of business at KU said another possible reason for the ban on imports stems from NAFTA rules being relaxed in the coming years.

"I don't think it's designed to help the auto dealers at all," said Birch. "I think what it's designed to do is to give the domestic manufacturing industry some space here to adjust. And I think that's the bigger industry and job creation machine in Mexico."

After the ban has been in place for two years, Mexico will gradually begin to allow cars made in the year 2000 and newer. These cars will be phased in through the year 2019 in order to meet NAFTA standards.

"So it's really a way to warn Mexican producers of cars that this is going to be changed. In two years they're going to face any kind of used car coming in," said Birch.

Johnny Inverarity, the owner of Johnny I's Used Cars, said that local used car dealers are already seeing the effects from the new law.

"It's going to hurt prices on older, higher mileage units; trade ins mainly because that market's not there anymore," said Inverarity. "Those people would drive up here by the hundreds and pay real strong money for those older cars. They're not going to be doing that anymore."