NAFTA to USMCA: The Impact on the Labor Market in Mexico

The United States-Mexico-Canada Agreement (USMCA) substituted the North America Free Trade Agreement (NAFTA) in 2020, updating trade rules for one of the world’s largest free trade zones. Some key changes include stricter rules of origin and higher wage requirements in the automotive industry, as well as a requirement for broader worker representation in collective bargaining in Mexico. This project studies what is the impact of the new provisions on employment and wages in Mexico, using administrative employer-employee matched data.