Divergent Reactions to Globalization: Labor Unions and the NAFTA and the EU Enlargement Process

Abstract

The 1990s witnessed the launching of two ambitious trade regionalization plans, the NAFTA and EU enlargement to Central and Eastern Europe. In contrast to previous projects for the creation or expansion of regional trade blocs, these two projects concerned states at dramatically different levels of economic development: The NAFTA involved the very wealthy economies of Canada and the USA and the significantly poorer economy of Mexico, whereas EU enlargement involved the very wealthy economy of the 15 member-state European Union and the significantly poorer economies of former Communist states in Central and Eastern Europe. Ultimately, the NAFTA and EU enlargement are responses to the challenges of globalization. Paradoxically, however, they have been met with radically different societal reactions in the wealthy partners that participated in the launching of these processes. This paper focuses on the reaction by labor unions on both sides of the Atlantic. I conclude that while labor relations and welfare institutions constrained the trade policy choices made by labor unions in the United States and Europe, they do not tell the whole story. It would seem that United States labor unions were more sensitive to the potential risks for workers associated to the liberalization of trade than were their European counterparts.