Revisiting NAFTA: Still Not Working for North America's Workers

Publication Date: September 2006

Publisher: Economic Policy Institute

Author(s): Carlos Salas; Bruce Campbell; Jeff Faux; Robert Scott

Research Area: Labor; Trade

Type: Brief

Abstract:

Despite its name, the primary purpose of the North American Free Trade Agreement (NAFTA) was not to facilitate trade among separate sovereign societies. Rather, it was to promote an integrated continental economy and establish the rules to govern it. As a former foreign minister of Mexico once remarked, NAFTA was "an agreement for the rich and powerful in the United States, Mexico, and Canada, an agreement effectively excluding ordinary people in all three societies." It should, therefore, be no surprise that NAFTA rules protect the interests of large corporate investors while undercutting workers' rights, environmental protections, and democratic accountability. Hence, NAFTA should be seen not as a stand-alone treaty, but as part of a long-term campaign by the conservative business interests in all three countries to rip up their respective domestic social contract.

This report details how this campaign played out in the labor markets of all three nations. It is, of course, not the full and complete measure of the impact of NAFTA. But it is arguably the most important one, because the agreement was sold to the people of each nation on the promise that it would bring large net benefits in better jobs and faster growth. Indeed, supporters claimed the gains would be so large as to more than compensate for the erosion of the average workers' bargaining power and the weakening of citizens' rights to use government to protect themselves against the insecurities of unregulated markets.