A U.S.-Mexico-Canada Free Trade Agreement: Sectoral Employment Effects and Regional/Occupational Employment Realignments in the United States

Abstract

The purpose of this study is to estimate the changes in employment that will be required across sectors, occupations, and locations within the U.S. economy as a result of a North American Free Trade Agreement (NAFTA). Such changes will undoubtedly occur as reduced trade barriers among the members of a NAFTA-the United States, Canada, and Mexico-cause expanded trade among them and the need for certain industries to expand and for others to contract. These changes could also prove quite costly to the workers involved, to the extent that they find it difficult to transfer from declining to expanding sectors. Since it may fall to the U.S. government to assist workers in this process of adjustment, it is important to estimate not only where that adjustment will be needed, but also what the attendant

costs will be. This study, therefore, provides such estimates and examines the feasibility of meeting these needs within the existing programs of labor adjustment assistance in the United States.