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Impact of North American Free Trade Agreement on Canadian Employment

Canada is a strategic trading partner of the United States as well as Mexico because of their geographical closeness. Another is because it is the largest trading partner in agricultural products and by-products. The trend in the trade is increasing between these countries. This is the result of the zero tariff-rate on these products. It has created new market or employment and job opportunities to Canadian citizens. Furthermore, Canadian consumers will have more purchasing power in terms of greater freedom of choice for agricultural products in a more competitive marketplace. The effect of NAFTA in the Canadian employment competitiveness has not been clearly measured or put into a figure. As claimed by Karakowsky (2004), this resulted in contrasting views on how competitiveness. One view is positive on the effect of the free trade or the NAFTA in particular as it has created new jobs in Canada. Another view opposes the first proposition as it claims that NAFTA has caused a negative effect on competitiveness because of job losses. The pro-NAFTA proposition argues that competition with products and services with NAFTA member countries will push for the improvement of the domestic goods which will eventually trickle down to the improvement of the employment situation such as improved labor skills and labor conditions. The elimination of tariff on products and services of NAFTA member countries means a non-protectionism policy that is geared towards domestic companies and domestic labor force. This necessitates the adoption of new measures to enhance their present stance and develop for the better in order to survive. This will lead to more efficiency both of the company and that of the labor. The argument above is supported by the government of Canada which states that, the enhanced economic activity and production in the region which affects Canada’s labor pool has contributed to the creation of jobs for Canadians.