Effects of NAFTA on US Employment and Policy Responses: A Product of the International Collaborative Initiative on Trade and Employment (ICITE)

The signing of the North American Free Trade Agreement (NAFTA) was a contentious event in United States (US) politics, in particular with respect to public views about the possible labour market effects. This paper is structured as follows. First, we provide background on the political debate in the United States at the time of the signing of NAFTA. We then outline the dynamics of trade and employment among the NAFTA partners over the last 20 years. The third section provides a literature review that summarises estimates of NAFTA’s employment impact, both shortly before its implementation and afterwards. Against this background, we provide an overview and assessment of US employment policy responses aimed at facilitating labour-market adjustment and support of trade-displaced workers.