Research Symposium

BIO

Juan "Jack" Lopez is a Sophomore student pursuing International Affairs and Political Science. He is a QUEST Scholar who is involved in several organizations across the university, with the ultimate goal of pursuing a career in public service or private international law.

Responses to Labor Regulation Enforcement: The role of the USMCA’s Rapid Response Mechanism on Labor Market Outcomes in Mexico

Abstract

Designed to be at the vanguard of enforceable labor
rights in trade agreements, the USMCA’s Rapid
Response Mechanism (RRM) was conceptualized to
protect collective bargaining rights and strengthen labor
standards in Mexico. This paper examines the
cumulative impact of RRM investigations on wages,
employment composition, and job quality across
Mexican states and cities, leveraging facility-level case
variation and quarterly labor data. The findings reveal a
sequential adjustment process, rather than immediate,
uniform gains for workers. In the short run, RRM
enforcement is associated with an increase in worker
displacement, shown by an immediate decline in
permanent or unionized employment contracts,
followed by an increase in non-agricultural informal
employment. However, in longer posttreatment
evaluations, RRM enforcement is associated with
increased reported job-quality indicators, such as
increases in non-mandated employment benefits,
plausibly demonstrating the recognition and
enforcement of collective bargaining agreements
central to the RRM.

Keywords: USMCA, free trade agreement, labor, rights, treaties