Press Releases

NAFTA a failure thus far, group reports

Contact: Brian Lustig (202) 331-5530 or Nan Gibson (202) 331-5546

Treaty failed to fulfill predictions made by promoters

Washington, D.C. – The North American Free Trade Agreement (NAFTA) has failed to perform as promised and should be repealed or significantly restructured, reports a coalition of six policy-research organizations. Although NAFTA has benefited some sectors of the economy, its overall impact on working families in the three signatory countries — the United States, Canada, and Mexico — has been negative.

In anticipation of the release by President Clinton of a congressionally mandated “comprehensive study on the operation and effects” of NAFTA, the group has prepared a report that examines the overall impact of NAFTA since its implementation. The Failed Experiment: NAFTA at Three Years evaluates the promised benefits of the agreement in several broad areas: the general economies of the participating countries, the living standards of their populations, labor relations throughout North America, and the continent’s environment. It finds that NAFTA has fallen far short in each of these areas.

In the United States, NAFTA:

* Put downward pressure on wages and living standards;
* Created “deep and probably chronic” trade deficits with its neighbors;
* Displaced more than 400,000 jobs;
* Weakened workers’ rights and reduced employee bargaining power;
* Exacerbated environmental and public-health damage along the U.S.-Mexico border;
* Compromised food safety standards; and
* Increased drug trafficking due to insufficient border inspections and heavier truck traffic from Mexico.

In Mexico, NAFTA:

* Precipitated the 1994 peso collapse, which led to an economic depression;
* Eliminated more than 2 million jobs;
* Reduced real hourly wages by 27% from 1994 levels;
* Caused the failure of more than 28,000 small businesses; and
* Weakened labor standards and increased violations of worker rights.

Canada, too, has suffered the continued effects of a recession that began in 1989 with the ratification of the original U.S.-Canada Free Trade Agreement. The effective merger with the U.S. economy has increased unemployment and forced Canada to begin to dismantle its longstanding social safety net, resulting in falling standards of living for the average Canadian.

The six organizations that contributed to the report concluded that NAFTA should be scrapped or significantly revised in order to create a trade agreement that complements the goal of high and rising living standards for all workers.

The organizations are the Economic Policy Institute; the Institute for Policy Studies; the International Labor Rights Fund; Public Citizen’s Global Trade Watch; the Sierra Club; and the U.S. Business and Industrial Council Educational Foundation.

For more information, contact:

Economic Policy Institute:
Nan Gibson (202) 331-5546
Brian Lustig (202) 331-5530

Institute for Policy Studies:
John Cavanagh (202) 234-9382
Sarah Anderson

International Labor Rights Fund:
Pharis Harvey (202) 544-7198

Public Citizen’s Global Trade Watch:
Lori Wallach (202) 546-4996
Bob Naiman
Chris McGinn

Sierra Club: Dan Seligman (202) 675-2387

U.S. Business and Industrial Council Educational Foundation:
Alan Tonelson (202) 628-2211

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The Economic Policy Institute is a nonprofit, non-partisan economic think tank
based in Washington, D.C. Founded in 1986, EPI seeks to widen the debate about policies to achieve healthy economic growth, prosperity and opportunity in the U.S.

To order copies of The Failed Experiment: NAFTA at Three Years, contact EPI at 1-800-EPI-4844 or order online.