The North American Free Trade Agreement (NAFTA) is a trilateral trade agreement between Mexico, Canada, and the United States. NAFTA provides for the elimination of all tariffs on goods originating in the three member nations. The agreement was implemented in January 1994 and resulted in the creation of a total market encompassing 370 million people and $6.5 trillion worth of goods (Farmer, 1994: 293). Included within NAFTA is the North American Agreement on Labor Cooperation (NAALC). The Labor Agreement was added to the final version of NAFTA to define the obligations of the member nations toward workers employed in trade-related occupations and to define general labor-related goals among the three nations. The preamble to the NAALC proposes that the governments of the member nations:
... create new employment opportunities and improve working conditions and living standards in their respective territories; ... [and] protect, enhance, and enforce basic workers' rights.
This research note covers three areas: (1) the procedures established in the NAALC to resolve labor disputes and to meet the promises of the preamble, (2) the status of the economies and labor disputes in the member nations, especially as it relates to trade-related jobs, and (3) the potential use of U.S. anti-discrimination law in conjunction with the NAALC to alleviate worker grievances stemming from allegations of sex discrimination in the United States or involving U.S. companies.(1)
The North American Free Trade Agreement on Labor Cooperation
The NAALC establishes guidelines for the promotion of labor rights and worker well-being in the member nations and develops mechanisms for cooperative resolution of specific labor disputes. The Agreement contains seven sections with 55 articles that are summarized in Appendix 1.
Part I outlines the objectives of the Agreement. Included in this section is an extensive list of labor principles that, according to the Agreement, are "guiding principles, but do not establish minimum standards for each Parties' domestic law." Part II, the "obligations" section of the Agreement, declares that each country, not any NAFTA-created body, is responsible for the promulgation and enforcement of its own labor laws and policies. This section requires that member nations establish "fair" procedures for workers to allege a violation of an existing labor law. The Agreement does not mandate a minimal level of worker rights or labor standards for workers engaged in trade-related work. No requirement exists for similar treatment of workers in each country who are engaged in the same occupation and employed by the same company.
The subsequent sections of the Agreement establish procedures for the review of a limited number of alleged labor violations that affect trade. The NAALC establishes three types of labor violations, with separate procedures for the resolution of each type of dispute. First, alleged violations of the right to organize, bargain collectively, and strike are handled by each country's respective National Administrative Office (NAO). These offices review alleged violations and issue reports. The NAOs have no enforcement mechanisms.
The NAALC's second level addresses allegations of the use of forced labor, employment discrimination, unequal pay for men and women, violations of existing workers' compensation rules, or the improper use of migrant workers. These allegations are handled through a trinational Evaluation Committee of Experts (ECE). The ECE issues evaluations and recommendations, but like the NAOs has no enforcement power and lacks the authority to issue sanctions for violations.
For alleged violations of national occupational safety and health laws, minimum wage, or child labor laws, the enforcement rises to a third level where sanctions are possible. Evaluating and resolving allegations of these three labor violations require an attempt at a cooperative solution and, if a solution is not reached, the use of an arbitral panel. …