The impact of the NAFTA treaty on wage competition, immigration, labor standards and cross-border co-operation

Abstract

The signing of the North American Free Trade Agreement (NAFTA) in 1993 led to the formation of a social and economic area characterized by marked asymmetry between its members: the USA, Mexico and Canada. Seven years later the results in terms of salaries, employment and labor standards are not very positive, although they have not produced the catastrophic results foreseen by some. In Mexico several hundred thousand jobs were created, especially in the maquiladora export industry, but this has been associated with falling living standards and rising poverty. Migration from Mexico to the USA has increased. Poor labor standards and illegal employment have led to collaboration between NGOs and trade unions on both sides of the frontier.

Standard-setting for Labour in Regional Trading Blocs: the EU and NAFTA Compared

“…The main impact has been the 'shaming' of some companies (Hualde and Ramirez, 2001). In particular, the public submission procedure of NAALC was used to get the American govern-ment directly involved in the way in which public authorities enforced core labour standards in Mexico.…”

“…But it would be naïve to make extravagant claims about the impact of NAALC: no systemic change has been triggered to labour market governance in Mexico due to NAALC-related activity. The main impact has been the 'shaming' of some companies (Hualde and Ramirez, 2001).…”