The liberalization of international trade has always been associated with social, political and economic disruption. Indeed, such disruptions are the very source of much popular opposition to liberalization. The moment humans began trading with one another, anxieties were provoked about the impact of exotic foreign wares on everything, from local culture and politics to, of course, economic activity (Irwin 1996: 11–15). These anxieties have periodically, but regularly, spilled over into the kind of populist, anti-trade xenophobia infecting modern debates about trade. This chapter begins with a short discussion of how embedded the politically, economically and socially disruptive qualities of trade liberalization actually are. In part, this chapter will argue, there has always been a connection between trade and both labour and the environment. However, it was the NAFTA that permanently situated labour and environmental issues as meriting consideration in the governance of regional and global trade.

Yet having labour and the environment on the agenda has produced uneven results. The NAFTA’s side agreements on labour and the environment may have started it all, but these same agreements are also emblematic of the uneven treatment and impact of labour and the environment on global trade. Indeed, the NAFTA side agreements were initially afterthoughts, born of the politics of the day and – much to the mutual chagrin of people on different sides of the debate around the nexus of trade, labour and the environment – designed more for show than substance. The result was that the labour half of the side agreements quickly went dormant while the environmental half survived and become more robust than their authors intended. In other words, few were entirely happy with the side agreements. Finally, this chapter will note the significant, but also surprising, degree to which the importance of labour and the environment was affirmed in the NAFTA’s successor, the United States–Mexico–Canada Agreement.

Winners, losers and spillovers

There are few certainties in life, but there are two that students of international trade can commit to memory: (a) trade liberalization creates “winners” and “losers”; and (b) the “winners” are broadly distributed and the “losers” are highly concentrated.