International Business?

Question

The U.S. Congress approved the North American Free Trade Agreement despite strong opposition from organized labor. What motivated labor’s stand? Have labor’s forecasts turned out to be correct?

Answer 1

Labor unions in both the United States and Canada opposed the North American Free Trade Agreement (NAFTA) because they feared certain types of jobs that are often filled by union members would move to Mexico where labor costs would be cheaper.

Proponents of NAFTA did not necessarily dispute this claim, but argued that making it easier to move goods between Canada, Mexico and the United States would make all three economies more efficient, provide more affordable goods available to residents of all three countries, and result in a net increase of all jobs in North America as the economies became more efficient.

I don't think very many people would dispute that some low wage jobs moved from the United States to Mexico. Even most NAFTA supporters would agree with that claim. However, the question is whether all three economies have improved as a result of NAFTA. You'll find plenty of arguements on both side of that question.