NAFTA Labor Side Agreement: Lessons for the Worker Rights and Fast-Track Debate [Updated October 9, 2001] [open pdf - 179KB]
"The North American Free Trade Agreement (NAFTA), between the United States, Mexico, and Canada was the first trade agreement ever linked to worker rights provisions in a major way. Its companion 'side agreement,' the North American Agreement on Labor Cooperation (NAALC, which rhymes with 'talc') went into effect with NAFTA on January 1, 1994. The NAALC agreement is 'broad' in that NAFTA signatories agree to enforce their own labor laws and standards while promoting 11 worker rights principles over the long run. However, under NAALC, sanctions as an enforcement tool are applicable to only three of the 11 labor principles (pertaining to minimum wages, child labor, and occupational safety and health), and are not applicable to three basic rights: the right to organize, bargain collectively, and strike. [...] Trade liberalization ultimately results in gains to all economies; however, there are winners and losers (both industries and workers) along the way. Worker rights provisions could mitigate the effects of trade liberalization on both winners and losers by increasing labor costs in developing countries. However, NAALC as a worker rights promotion vehicle with a developing country has mitigated the effects of trade expansion from NAFTA very little so far, because most compliance is voluntary."
CRS Report for Congress, 97-861
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