NAFTA at Seven: Its Impact on Workers in all Three Countries

Publication Date: April 2001

Publisher: Economic Policy Institute

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

Research Area: Economics; Trade

Type: Brief

Abstract:

Each year since the implementation of the North American Free Trade Agreement (NAFTA) on January 1, 1994, officials in Canada, Mexico, and the United States have regularly declared the agreement to be an unqualified success. It has been promoted as an economic free lunch--a "win-win-win" for all three countries that should now be extended to the rest of the hemisphere in a Free Trade Area of the Americas agreement.

For some people, NAFTA clearly has been a success. This should not be a surprise inasmuch as it was designed to bring extraordinary government protections to a specific set of interests--investors and financiers in all three countries who search for cheaper labor and production costs. From that perspective, increased gross volumes of trade and financial flows in themselves testify to NAFTA's achievements. But most citizens of North America do not support themselves on their investments. They work for a living. The overwhelming majority has less than a college education, has little leverage in bargaining with employers, and requires a certain degree of job security in order to achieve a minimal, decent level of living. NAFTA, while extending protections for investors, explicitly excluded any protections for working people in the form of labor standards, worker rights, and the maintenance of social investments. This imbalance inevitably undercut the hard-won social contract in all three nations.

As the three reports in this paper indicate, from the point of view of North American working people, NAFTA has thus far largely failed.