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Why were labour side agreements added to NAFTA?
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North American Free Trade Agreement
(From left) Mexican Pres. Carlos Salinas de Gortari, U.S. Pres. George H.W. Bush, and Canadian Prime Minister Brian Mulroney meeting to initial the North American Free Trade Agreement in San Antonio, Texas, October 7, 1992.
Labour side agreements were added to the North American Free Trade Agreement (NAFTA) to address concerns regarding the potential impact of the treaty on labour markets.1
Critics of the agreement feared that the generally low wages in Mexico would incentivize U.S. and Canadian companies to shift their production to Mexico, leading to a rapid decline in manufacturing jobs within the United States and Canada. By incorporating these side agreements, negotiators sought to mitigate these concerns and address the potential labour-market consequences of the trade pact.12