NAFTA has been praised as a "job creating" agreement by its signatories and multinational corporations alike. In 1994, the Clinton Administration pledged that this particular free trade agreement would create the majority of new jobs in the U.S., with significant job increases in Canada and Mexico. Although NAFTA has had some success in producing jobs, a significant effect, which has not been given enough attention is the amount of job displacement that has occurred in the participating member countries of NAFTA as a result of multinational corporations relocating to lower-wage areas. Those who have gained from the effects of NAFTA are the corporations who have relocated their facilities to lower-wage areas, wealthy investors, and the small elite of professionals who service and direct global business. In contrast, those who have lost are the workers who constitute the backbone of such corporations and who have been exploited by the effects of downward harmonization. Overall, these workers resemble the low skilled, low wage, sector of the labor force from the U.S., Canada and Mexico. Such laborers are interdependently affected when any corporation from any NAFTA country relocates to a lower-wage arena. The failure of NAFTA to look at and enforce policies targeted towards the job displacement has adversely and interdependently affected the United States, Mexico, and Canada.
This chapter will look at looking at interdependent relationships within NAFTA and its effect on labor in terms of job displacement and downward harmonization and will compare the promises of NAFTA's proponents in regards to job displacement with the actual effect NAFTA has had on workers. This section looks at how the labor side accord has failed to promote its promises, and finally, possible policy alternatives that will allow for the protection of those who have been negatively affected by company moves.
The North American Free Trade Agreement allows for the free flow of capital and goods, creating what business leaders refer to as, a 'level playing field'. In the interests of multinational and trinational corporations, the agreement promises the elimination of tariffs on trade over a 10-year period, the harmonization of labor and environmental standards, and the spatial integration of the production and distribution networks of major industries like transportation equipment and textiles, among others. In 1992, when the United States, Canada, and Mexico concluded negotiations on the agreement, it was argued that NAFTA would create growth and stability.
In 1993, the Clinton Administration claimed that the trade agreement would create high-wage U.S. jobs and expand the base from which U.S. firms and workers could compete in a dynamic global economy. Along the same lines, the U.S. International Trade Commission and the Institute for International Economics, projected that over one million jobs were to be created in the U.S. by 1995. (1) Clearly this hasn't been the case; slightly under 200,000 skilled, high wage jobs have opened up in the U.S. economy, and as far as competition goes, only these 'types' of workers are eligible. According to the Bureau of Labor Statistics, the total number of workers displaced over the period January 1993 to January 1, 1996, was 9.4 million. (2) Workers in manufacturing have continued to make up the largest share of displaced workers and are among the least likely to be re-employed. Nearly half of the total 9.4 million displaced workers lost their jobs due to plant closings or moves. Among these statistics, textile, apparel and durable goods manufacturing industries are those most affected by changes in economic conditions. The Bureau of Labor Statistics 1996-2006 Employment Projections also re-affirms these findings. Under the Industry Employment section, the Bureau projects that manufacturing's share of total jobs is expected to decline; a decrease of 350,000 manufacturing jobs is projected; accounting for 14 percent of employment in 1996, manufacturing is expected to account for just 12 percent in 2006. Aside from the decline in manufacturing jobs, health services, business services, social services, engineering, management, and related services are expected to account for one of every two wage and salary worker jobs added to the economy. The Bureau of Labor Statistics projects that employment will increase in occupations requiring various amounts of education and training. Growth rates over the 1996-2006 period will range from 7 percent for occupations generally requiring post secondary vocational training to 25 percent for occupations requiring a bachelor's degree. (3) These statistics illustrate that while there may be an increase in the availability of high skilled jobs the number of low skilled manufacturing jobs is decreasing. As a result, there is a widening gap between workers who are eligible for the high-skilled jobs and those who do not have the training for such careers. Consequently, this portion of the workforce remains jobless as they have no means to attain the skills demanded by the increase in better paying, higher skilled jobs. David Cagen's chapter on the winners and losers of NAFTA touches on the role of free trade in widening the gap between high and low-skilled workers and how this has created wage disparities. (4)
In the first two years of NAFTA, over two million jobs were lost in Mexico, as the nation's small and medium-sized businesses could not endure tough competition from large foreign corporations.(5) Like the U.S. and Canada, Mexico has experienced a general downward shift out of better paying jobs into low-wage employment. The majority of these people are working for less than poverty-level wages due to the increasing gap between the rich and the poor. Professional occupations are projected to increase the fastest and to add the most jobs (4.8 million) (6), but where does this put the manufacturing part of the labor force that has been displaced; not just in the U.S., but in Canada and Mexico? Several of these displaced workers end up having to find day-to-day jobs, or worse yet, are forced to migrate from rural areas to border regions in order to find higher paying jobs. However, once migrants move to these areas they find that they lack the education and skills to perform these new jobs and end up having to settle with low or no skill jobs in order to survive. (7)
Under NAFTA, The Clinton Administration committed to having adequate funded worker adjustment assistance that would provide 'prompt, comprehensive, and effective services'. Such services were the right idea, especially for those displaced workers who require retraining, yet in terms of availability and protection these services were never enforced. On both sides of the border, the labor side agreements of NAFTA have not been an effective tool for improved labor-law enforcement. Based on the lack of political wills of the governments involved, the side agreements have proven to be unenforceable. (8) The labor side agreement to NAFTA was supposed to prevent the abuse of workers has proved to be totally ineffective, with no sanctions when worker rights are violated. In Mexico, for example, workers are being fired, attacked, and threatened for forming labor unions, while Article 123 of the Mexican Constitution states that Mexicans are guaranteed the freedom to form unions and professional associations of their own choosing. It continues by saying that workers are protected against anti-union discrimination and that workers have the right to strike. (9) The Council on Hemispheric Affairs states:
Relatively little has been attained by the North American Agreement on Labor Cooperation (NAALC), NAFTA's labor side agreement. Although it was designed to defend labor rights and to level the playing field for workers in all three nations, it has done no such thing. Wages, conditions and benefits in Mexico, for example, remain substantially lower than those in Canada and the United States. This regional imbalance has also harmed the status of Canadian and U.S. laborers by reducing their ability to use collective bargaining mechanisms with their employers. In other words, corporate leaders are threatening to move plants to Mexico or other low cost areas to thwart U.S. organizing drives. (10)
In Los Reyes La Paz, Echlin Industries Itapsa workers were fired and later threatened with beatings during an Aug. 28, 1997 representation vote when almost 200 'beaters' took over the plant and intimidated employees during a certification vote. (11) Normally it is the responsibility of the NAO (NAFTA's national administrative office) to determine whether a participating government is inadequately enforcing its labor laws, however, this complaint has never been handled by the administrative office.
The failure of all three governments to deliver on the spoken promises of NAFTA's side labor agreement reinforces Robert Reich's argument that the trade pact will further polarize all three societies. Reich claims that Americans are no longer rising or falling together, we are increasingly being separated by the transnational trend of free trade. (12) Competition and open markets exacerbate the widening gap between low and high wage workers. What divides workers today is not only the quality of their formal education, but mainly their skill capacity. As said before, markets for highly skilled labor have become the most popular in the terms of job opportunity leaving a wasted workforce of lower skilled laborers jobless. The reason these workers remain unemployed is due to the lack of enforcement by the NAALC to provide efficient retraining programs. (13)
The issue here is the viability of Mexican, Canadian, and United States labor standards, now given that individual states and provinces have the incentive to discount their own standards in relation to other jurisdictions (national) all in hope of advancing their relative economic advantage. NAFTA restricts the ability of governments to apply independent domestic policies, allowing for lax labor regulations. As a result, TNC's reap great benefits from free trade policies as they are able to gain continental citizenship within any of the three member countries of the agreement, permitting them to restructure and rationalize their productive processes at a transnational level. This, however, has a downward harmonization effect on labor standards because neither NAFTA nor CUFTA (Canada-United States Free Trade Agreement) incorporate these type of standards into their agreements, and instead allow for corporate control of all labor by not forcing MNC's to adhere to international labor standards. NAFTA promotes deregulation and increased capital mobility, creating pressures on the labor market. The result is labor segmentation/displacement, which is evident in each member country.
Interdependence is understood as a systematic and influential interconnectedness between nations and other actors in the international political economy conditioned by trade, aid, finance, and investment. Reactions to interdependence include the need to cooperate. However, as David Balaam and Michael Veseth point out it also provokes negative reactions related to the vulnerability and sensitivity interdependent dynamics engender. (14) The three members of NAFTA are and have become increasingly interdependent through the trade pact, as increasing flows of capital, goods, information, and people create cross-border, web-like relationships. The implementation of free trade in this interdependent arena has weakened the significance of political boundaries and trade blocs. As a result of the opening of markets, highly mobile transnational corporations can easily establish production facilities in Mexico to take advantage of the most lax labor laws or to Canada to avoid the costs of health insurance. The government policies that once inhibited cross-border transactions, in terms of tariff and non-tariff barriers, have disappeared due to an increasingly competitive and highly mobile global economy.
The more recent interdependency between Mexico, Canada, and the United States, created by the North American Free Trade Agreement, proves that business leaders' private decisions have enormous public consequences. During the first year of NAFTA the Mexican economy fell into crisis. (15) This crisis cannot be blamed entirely on NAFTA, but the agreement did play a significant role. The only economic sector that has prospered under NAFTA has been the export-oriented sectors of a few large enterprises, otherwise known as multinational corporations. These exporting firms have brought about the decline or shut down of several other firms and have thus created a giant gap between the low and high-skilled workers in the marketplace. The jobs and incomes of workers in the U.S., Canada, and Mexico are threatened by corporate cost cutting sparked by trinational trade. For example, if the leaders of a local enterprise decide that it will be profitable to invest in new production facilities and to expand output, local employment will rise. However, if business leaders choose to slow down production or move their facilities to another state or country, unemployment will rise and the rural community most likely will suffer, such is the case in El Paso, Texas, Quebec, Canada, and Monterey, Mexico. An abundance of jobs is available for the workers in the new location, but now hundreds of workers in the original setting are jobless. These consequences are evident in old steel-producing areas of Ohio and Indiana, where citizens have experienced deterioration of their communities and fewer jobs as a result of their employers relocating production to Mexico. More and more of these workers are finding that once they've lost their jobs its even more difficult finding a new one- the reason being the lack of available low-skilled manufacturing jobs and retraining programs for displaced workers.
Now that more manufacturing jobs are relocating to cheaper labor areas, low-skilled natives are being swept aside. NAFTA's labor side accord failed to protect workers from layoffs nor did it bring about promised re-training programs. The relocation of factories is a result of corporate reaction to tax structures and government policy regarding labor and environmental standards. Such incentives, coupled with advancements in information technology, force companies to move operations to lower wage areas. When governments raise taxes or enact reforms that increase the cost of production and reduce profitability, workers are "punished" as business managers reduce output and employment. In these cases, managers will move their operations to a state or country with a "better business climate", an area with lax labor regulations and lower wages. Both enterprises and states see themselves as trapped in a situation of relentless competition due to open markets and free trade, where each participant is dependent on the decisions of all other players. As Rebecca Stanton will later illustrate, interdependency between NAFTA's member states increases every day when multinational firms cross borders. However, Ms. Stanton explains that as more of these economic ties are being built there come major responsibilities and pressures. (16)
Export-related jobs have offset manufacturing jobs in the United States and Canadian economies, yet the problem is finding the highly skilled workers to fill these positions. The number of jobs in technologically advanced computer based industries and computer-using service providers is enormous. The ITAA (Information Technology Association of America) estimates that about 190,000 information technology jobs nationwide are going unfilled due to the abundant amount of unemployed, low-skilled workers unable to match up to these job prerequisites. (17) Therefore, what people are calling "labor shortages" should, more accurately, be referred to as jobs-skills mismatches. (18)
There is also a shared common identity between Canadian, Mexican and American workers. Manufacturing workers are interdependently linked through the increasing amount of cross-border labor unions. There has been new cooperation emerging among unions from Mexico, the United States, and Canada. (19) Many of these unions are merging as a result of shared interests and a shared need to defend these interests. By forming alliances, American unions have helped Mexican counterparts seek victory in strikes and organizing drives. A recent New York Times article quotes a Mexican union organizer in regards to the union alliance:
They're showing more interest in understanding what we're up against in Mexico: the control, the manipulation, the gangster tactics. And we're learning more about the problems they face, the firings, the factory shutdowns. (20)
Union members and workers from Canada, the United States, and Mexico are taking sides on issues affecting labor rights, especially after the incident in the Mexico City Itapsa plant where workers were attacked for conducting a vote for a new union. The United Electrical Workers, Teamsters, Steel Workers and four other United States and Canadian unions have joined forces with the Authentic Front in an alliance to support the Mexican workers campaigning, an activity that the NAO was intended to protect yet failed to do so.
As NAFTA has implemented free trade policies, the international trade system has reinforced Mexico's role as a producer of primary products and raw materials, while the United States and Canada have continued to prosper as producers of industrial and hi-tech products. This international division of labor reinforces the dependence of Mexico on the developed nations as outlets for Mexican primary products as well as providers of employment. In addition, Mexico has become dependent on more developed countries for capital and technology in order for the Mexican economy to generate economic development. Results of free trade have created an international division of labor in which workers in the U.S. and other developed industrial countries, such as Canada, have grasped the high-technology and high information sectors and have become a part of the most sophisticated, flexible, information-based producers for high wages, but there still exists the now unemployed, native, assembly-line workers who lost their jobs to Mexico. (21) This creates a division of labor within the nation itself. The low-wage, less-skilled, assembly-line work has been shipped to countries like Mexico and has left U.S. and Canadian assembly-line workers empty handed. The problem with this scenario is that within this open market of free trade, there is a harmony of interests, but that harmony ends when labor has been divided. Within the labor process, there is a gap between low-skilled and high-skilled workers.
The failure of NAFTA in regards to job displacement has already affected all three member countries, especially Mexico. Former Mexican President Salinas's attempted to attract foreign investment by maintaining low wages, weak regulations, and a powerful apparatus for containing dissent and labor agitation. (22) Displaced Mexican workers who fear maquiladorization of Mexico, see these factories as a tool of dependency. While these foreign businesses use low-skilled Mexican labor, they do not provide significant training or education. Higher skilled jobs remain in the United States. Furthermore, the maquiladora division of labor is structured so that most capital investment and the greatest technological resources are located in the U.S. markets. Mexican critics believe that NAFTA will produce a maquiladora economy throughout Mexico, with low wages, low technology, and little chance for advancement within the labor movement. One of the principal arguments in favor of NAFTA was that free trade would enhance both American, Canadian, and Mexican labor markets. With free trade, wages would rise in Mexico; therefore, encouraging potential migrants to remain home and work in their native country. This is clearly not the case, especially when the Maquiladora zone sucks migrants from the rural zones of central Mexico and also forces immigrants into the United States to seek higher paying jobs. (23) This displacement results from corporate moves to lower wage areas and the increasing gap between low and high-skilled workers. Based on NAFTA negotiators promises, Mexico was expected to gain jobs through trade, yet according to an associated press poll, Mexico's auto manufacturing workforce was slashed until 1997. Such jobs were replaced with dollar-an-hour employees on the Maquiladora assembly lines. Harley Shaiken, from The American Prospect, also touches on the misconceptions of Mexico's status. Shaiken explains that proponents of NAFTA incorrectly assure that free trade with Mexico will not send high-wage American jobs south while bringing Mexican wages up to world-class levels. Shaiken illustrates the false conceptions of free trade on the part of NAFTA's proponents through careful review of NAFTA's actual outcome. Shaiken points out that while average labor productivity in Mexican manufacturing has risen considerably since 1980 the hourly compensation of workers wages and benefits has actually fallen by more than 30% when adjusted for inflation. (24)
Another study of a Mexico City firm indicated that it has shifted 60% of its production from its factories to women home workers, displacing the original production workers. (25) Female workers have been displaced in unbelievable numbers due to lack of access higher education or other related skills. There are no re-training programs for displaced female workers even though that was part of the NAFTA agreement leaving female workers ineligible for higher skilled jobs. (26)
By 1995, Mexico had lost 13% of its 137,000 auto manufacturing jobs when foreign competition wiped out Mexican parts suppliers. In 1997, Mexican auto production recovered itself, but the new equipment and more efficient production has meant fewer workers necessary than were expected to produce cars in Mexico. Due to foreign competition, the pressure to keep reducing the cost of labor to produce a car is continuing and most of these new, low-paid jobs will be located in maquiladora plants.
Contrary to the trade agreement which predicted that low-wage, labor intensive Mexican industries could prosper under free trade, in actuality the industries that have prospered are mainly located in the border regions, leaving the rural areas empty. The value of clothing production fell by one fifth between 1994 and 1995 and most of this production is now conducted in homes in central and southern rural areas due to the impact of free trade and its incentive for people to migrate to the north.
It is estimated that between 15,000 and 20,000 small to medium sized Mexican producers went bankrupt in 1995 resulting in a rise of 2.1% unemployment over the 1993 to 1995 year period. In other words, after the first year of NAFTA, unemployment grew by 10,996 and in 1995 another 893,114 workers joined the officially unemployed. (27) The disintegration and displacement of production and workers caused by the free trade agreement have largely affected manufacturing. During the first two years of NAFTA, the number of jobs in the manufacturing sector fell by 77,839 positions or 9.6% while the professional sector's population grew by 8%. (28) Consequently, the Mexican economy under NAFTA has been incapable of meeting the annual demand for new jobs resulting from 1.3 million new entrants to the labor force.
Mexico's low wages and weak regulations have led U.S. companies to divert investment and production south of the border and as a result, U.S. workers have experienced declining incomes and mass layoffs. Mexico offers a young, literate pool of low-wage labor and a growing market for U.S. products. Yet, with the implementation of free trade, NAFTA has continued to rob lower-skilled assembly and manufacturing jobs from America and transplant them to Mexico, where the labor rate is one-fifth to one-eighth as much as it is in America. (29) Mexico's low wage strategy for attracting investment and employment has exonerated important parts of the U.S. industrial base, causing massive layoffs in high-wage, blue-collar sectors. The maquiladoras are seen by many U.S. workers as a threat to their jobs. U.S. manufacturing workers are finding it increasingly difficult to compete with low-wage Mexican assembly-line workers. For example, since the implementation of NAFTA policies, Multinational companies like United Technologies slashed its U.S. employment by 29 percent and added 5,607 jobs over the same period in Mexico. Also, General Electric cut its U.S. workforce by 15 percent and expanded its labor force in Mexico by 27 percent, adding 1,766 employees in the same time period. (30)
Canadian labor is low cost too; one-third less than the United States and the quality and productivity are equal to or better than that of the United States. According to the Multinational Economic Organizations statistics, American auto makers save $300 for each car they make in Canada because of Canada's national health care system. The health care system in Canada subsidizes the average auto worker by giving free medical care that companies must pay for each U.S. employee. For example, GM spends about $5,000 a year to provide health care to each current and retired employee, but less than $1,000 for each Canadian worker. (31) By relocating auto industry plants to Canada and Mexico, U.S. manufacturers of automobiles dollars go further. Low labor costs are the main incentive for American multi and trinational corporations to relocate to places like Ontario, Quebec, and Mexico. However, as these corporations relocate to lower wage areas, thousands of workers are displaced and find it more difficult to be re-hired due to their lack of high skills and lack of retraining programs to fit them back into the workforce.
Originally, optimistic forecasts based on computerized equilibrium models showed that Canada would reap job, export, and production gains once the nation was to comply to the NAFTA agreement. However, these economic models did not incorporate the effects of TNC trade on the labor market. Under free trade, TNC's have the ability to move their capital and restructure production to lower cost production areas. TNC's are given this power through NAFTA's ability to shift decision making in these areas to corporate control. Canadian workers have witnessed a downward harmonization effect on labor standards due to the governments lack of enforcing domestic laws as a result of the process of free trade. Much like U.S. workers after the signing of NAFTA, more than 226,000 Canadian workers lost their jobs after signing the CUFTA agreement with the U.S. in 1990. General Motors, Allied Signal, United Technologies, General Electric, Rockwell, and Dupont cut 18,462 jobs from their Canadian operations in the years after Canada signed the trade deal with the United States on Jan. 1, 1988. (32) These leading Multinational corporations have slashed Canadian jobs and have hired 47,045 people from 1990-1996 in Mexico. The incentive for cutting jobs from all three countries relies on lower-wage destinations. Canadian businesses moved to take advantage of cheaper wages and non-union plants in the South East United States and in Mexico. (33) For example, 9,854 GM workers lost their jobs in Canada when the firm cut its workforce by 23 percent between 1990 and 1996. At the same time, GM hired 20,836 people at its low-wage Mexican maquiladora plants.
Rather than increasing by the hundreds of thousands, as promised by NAFTA, jobs have been disappearing in all three countries. The majority of jobs that remain are the high-skilled careers and those that pay less with fewer benefits. The majority of workers that have been displaced by company shutdowns or moves are the low-skilled manufacturers who are not eligible for the ever-increasing amount of high-skilled, higher paying jobs, and who were supposed to be placed in retraining programs under the NAFTA side accord, the NAALC.
In terms of strategies that must be built to cope with the labor problems that have evolved out of NAFTA, Jefferson Cowie of Duke University constructs some interesting observations and potential bases for improved policies. Cowie explains that perhaps the interdependent relationship between labor in the United States, Mexico, and Canada can be used in their best interests. According to Cowie, transnational labor solidarity and worker-to-worker networking does occur and get reported regularly and is most effective when stories are channeled to the rank and file such that they engender a shared interest; this shared interest is seen through cross-border labor alliances. (34) Perhaps such organized labor is the only answer in being able to forcefully push for labor rights and protection. The problem here is that such unions have existed for a long time and have accomplished close to nothing in terms of convincing NAFTA to follow through with its promises in terms of retraining programs and worker rights. Cowie further explains that the complexity of building a transnational framework for labor action remains a delicate and challenging process and this puts labor unions in an extremely difficult position. The base of Cowie's argument is that labor must continue in the search for strategies that will play in all three member countries of NAFTA, which has been more recently seen through cross-border alliances.
The NAALC can also be used to create a stronger base for labor policy. Currently the side accord is ineffective in enforcing stability and worker security. The only way the side accords can work effectively is by encouraging the continuation of cross border labor alliances who can then collaborate in targeting the key players behind the side accord; policy makers, the government, and the NAALC staff and trade unionists. This idea works in accordance to a similar argument by Steven Herzenberg about the need for NAFTA to take a "high-road" approach to labor. In this case, Herzenberg makes a contrast between the low-road NAFTA versus the high-road NAFTA, with the low road referring to business strategies that rely on managerial authority in the workplace, production relocation to low-wage areas, and hard bargaining over price between dominant firms and suppliers. Basically the low-road is what NAFTA has helped facilitate for large corporations to take advantage of mass production but with much lower wages and benefits. (35) As a result, workers have been displaced and a division between high and low-skilled workers has now occured within and among U.S., Mexican and Canadian societies. As Herzenberg points out, there is a need for NAFTA's policy makers to re-direct their focus to a high road approach in terms of business strategies. By investing in human resource development, such an alternative would focus on quality, service, and raising productivity for business. Herzenberg says:
The high road would depend on better trained workers. Since individual firms today appear unable to supply the investment in workers and employment security that high road workplaces demand, strengthening of career ladders and training institutions that cut across firms is needed. Constructing these two elements is likely to require cooperation between labor organizations and industry associations and networks of the type happening now. (36)
The steps taken by the high road approach would ensure to displaced workers that there still is a place for them in the labor market by providing workers with retraining facilities. The basic requirement for such an alternative to the low road approach is this need for cooperation between labor, industry, government, and NAFTA policy makers. The side agreement is already in place and can work as a tool for these networks to provide and enforce labor protection and stability. (37)
As mentioned earlier, labor can be seen in the U.S., Mexico, and Canada as an interdependent relationship, where in each of these countries, workers have been displaced due to the breakdown of trade barriers. NAFTA, in terms of labor, committed to having adequate funded worker adjustment assistance programs, but such services have not been enforced. The lack of enforcement is a result of the lack of political will of each government involved. Therefore, with the issue of displaced workers and the growing gap between high and low-skilled labor, there needs to be a way of promoting and enforcing the objectives of the NAALC. By taking a high road approach, an active network of government, labor organizations, and policy makers can work to succeed in establishing efficient retraining programs that will increase skill capacity enabling displaced workers can re-enter the job market.
In addition to this chapter, the following sections on migration, institutions and innovations will illustrate the failure of NAFTA and its side accord have failed to create stronger labor markets within and among its members. In correlation to this chapter, Yasmin Azam further explains how job displacement has propelled an increase in rural to urban migration and northward migration, which has, in turn, caused uncontrolled growth in the border regions and cities as well as led to agrarian decay. With the implementation of the free trade agreement, thousands of U.S. multi-national corporations have taken over the border regions of Mexico and have introduced new jobs. However, these new jobs, along with new technologies, have forced more and more Mexican producers to give up their land to more modern, multi-national producers and migrate to labor positions. As a result, rural areas become underdeveloped as border regions are exploited.
As explained by Rebecca Stanton, this detriment can be linked to the failure of NAFTA's labor side agreement to protect pre-existing labor standards. The NAALC's lack of enforcement measures results in a continued gap between high and low-skilled workers and an increase in migration.
Finally, Margaret Bek takes an innovative approach to the NAALC, using the European Union as a model to build and learn from in terms of providing effective labor policies. Such alternatives, provided by Ms. Bek, will create an environment in which all three member countries of NAFTA will prosper.