NAFTA and Labor: A Canadian Perspective *

Abstract

The North American Agreement on Free Trade (NAFTA) has stirred passionate debates in Canada. Proponents predicted that increased trade liberalization would create more jobs, greater multinational investment, and an overall better standard of living. Opponents, however, argued that NAFTA would lead to wage cuts, job losses, the erosion of labor standards, and the harmonization of labor laws to the lowest common denominator. I systematically examined the evidence and found that with some exceptions, the predicted negative effects have not materialized. Furthermore, the NAFTA labor side agreement has enjoyed moderate success in bringing labor concerns to the fore.