Determinants of U.S.-Mexico Trade Under the USMCA
Abstract The U.S.-Mexico-Canada Agreement (USMCA) will impose a restructuring of North American supply chains to meet the new input content requirements. To evaluate the determinants of U.S.-Mexico trade under the new agreement, the author creates an econometric model, and the estimations indicate that the distance from U.S. states to the Mexican border and the size of the economies of the states of Mexico are factors that impact trade between the two countries. Tariffs applied under the USMCA have had a minor but positive impact. Foreign direct investment showed positive effects on trade, indicating the existence of value chains between the U.S. and Mexico. The results suggest that polices to encourage trade between the two countries would require the development of transportation infrastructure, as well as the promotion of investment in strategic sectors to further develop regional supply chains.
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| Format: | Digital revista |
| Language: | English |
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Universidad Nacional Autónoma de México, Centro de Investigaciones sobre América del Norte
2021
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| Online Access: | http://www.scielo.org.mx/scielo.php?script=sci_arttext&pid=S1870-35502021000200375 |
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