The Impact of the Changes in NAFTA on Automobile Manufacturing Between the United States and Mexico

In this paper, I am analyzing how the North Atlantic Free Trade Agreement (NAFTA) and the United States Mexico Canada Agreement (USMCA) affect the automobile manufacturing industry, with a focus on Mexico and the United States. In order to determine the impact realized on the company level I compiled the cost of revenue data for Ford five years pre and post each agreement. Then, I used the data and ran a regression to see if a correlation presented itself between the agreements’ ratification and company performance. The results of my study indicate that both trade agreements increased the cost of revenue and cost of goods sold for Ford. This paper will contribute to the discussion surrounding the general efficacy of trade agreements as the enforcers of labor regulations and support mechanisms to encourage the success of specific industries.