Labour‐standard setting and regional trading blocs: Lesson drawing from the NAFTA experience

This paper examines the labour‐standard‐setting institution associated with NAFTA, the North American Agreement on Labour Cooperation (NAALC), sometimes referred to as the Labour Side Accord. The agreement is best described as a tri‐national institutional arrangement that grafts formal international procedures onto domestic labour market regimes. This feature ensures that it stands apart from the EU social policy, which is best seen as a supranational deliberative governance arrangement. The manner in which NAALC procedures have been used is documented and the main discernible pattern of action explained. The paper argues that NAALC is cumbersome and convoluted to operate. Yet it also argues that NAALC holds out interesting lessons for other regional trading blocs and other global experiments in labour market standard setting as its decentralised and “horizontal” character is more in keeping with the broad institutional design of such arrangements. The paper concludes by suggesting that NAALC will only reach its full potential when organised labour in the three participating countries adopt a more active approach to transnational collaboration inside NAFTA.