North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement is a controversial trade and investment agreement between the U.S., Mexico, and Canada that was initiated in 1994.

NAFTA’s economic benefits for the three countries have been mixed. While NAFTA has been beneficial to some (e.g. corn exporters in the U.S.), evaluations of the impact of NAFTA after its first ten years have found that an estimated 1.5 million farmers in Mexico lost their farms due to the import of cheap U.S. corn while 1 million manufacturing jobs were lost in the U.S.

NAFTA has been a model for subsequent free trade agreements like the Central American Free Trade Agreement (CAFTA). Trade unions, civil society and religious groups have rejected NAFTA as a failed model for trade and development. Some have called for a renegotiation of NAFTA.

NAFTA has very weak labor provisions that have proven useless in protecting worker rights. The labor provisions were added as a “side accord,” outside the main body of the agreement, and provide for no effective enforcement mechanism. USLEAP has supported the filing of complaints under a process provided by the NAFTA side accord primarily as a means to demonstrate the uselessness of NAFTA’s labor provisions as well as the need to reform Mexican labor law to allow for the formation of independent unions.

Mexico workers are frequently denied their basic rights by a protection contract system under which “stealth” unions have secret contracts with employers. If workers begin to form an independent, democratic trade union, the stealth union emerges and nearly always defeats the independent union's effort, in collusion with the employer and the local labor board. It is therefore exceedingly difficult to form independent unions in Mexico.

Complaints filed in 2005 and 2003 with the U.S. government using NAFTA procedures document the collusion between protection contract unions, local labor boards, and employers to block workers' aspirations for democratic unions that could improve working conditions.  In late 2011, a new NAFTA labor complaint was filed against Mexico, the first NAFTA labor complaint filed with the Obama Administration, focusing on the firing of 44,000 Mexican electrical workers and the liquidation of their company by the Mexican government.

The U.S. agency charged with implementing the labor “side accord” of NAFTA, as well as the labor provisions of other bilateral and multilateral agreements, is the U.S. Department of Labor’s Office of Trade and Labor Affairs (OTLA). OTLA has replaced what used to be known as the National Administrative Office (NAO).

Read more here about the "Escalating Struggles Over Mexico's Labor Law," published by the North American Congress on Latin America.

Check out USLEAP's fact sheet that explores the link between NAFTA, labor rights violations, and immigration.

For on-going updates and actions on Mexican labor issues, see Mexican Labor News and Analysis, published in a collaboration between the United Electrical Workers and the Authentic Labor Front of Mexico.