NAFTA and Social Responsibility

Donna M. Schaeffer, PhD, Marymount University, Arlington, VA
Patrick C. Olson, PhD, national University, San Diego, CA

(Source: National Institute of Health)

(Source: NASA)

Issues range from:

Efforts to Define CSR:

Universal Declaration of Human Rights
United Nations, 1948

The UN Global Compact
United Nations, 2000

International Labor Standards
International Labor Organization, 1918


What is NAFTA?

The North American Free Trade Agreement (NAFTA) was signed by the governments of the United States, Canada, and Mexico in 1994.



  • In Mexico, poverty rates have fallen and real income has risen
  • Business owners in all three countries have reported higher earnings

  • Farmers in Mexico saw food prices fall based on cheap imports from U.S.
  • U.S. workers in manufacturing and assembly industries have lost jobs

  • Facts on current trade under NAFTA:

    United States


    Two-way merchandise trade with Canada

    $ 602.5 billion (2008)

    $ 23.8 billion (2008)

    Canadian merchandise exports

    $ 375.5 billion (2008)

    $ 5.8 billion (2008)

    Canadian merchandise imports

    $ 227.0 billion (2008)

    $ 17.9 billion (2008)

    Canadian direct investment, stock

    $ 230.6 billion (2008)

    $ 4.5 billion (2008)

    Canadian commercial services exports

    $ 24.1 billion (2008)

    $ 222 million (2006*)
    * Latest year for which official data is available

    The North American Free Trade Agreement (NAFTA) has two supplements:
  • North American Agreement on Environmental Cooperation
  • North American Agreement on Labor Cooperation

  • NAFTA and CSR

    Canada: "While CSR does not have a universal definition, many see it as the private sector�s way of integrating the economic, social, and environmental imperatives of their activities. As such, CSR closely resembles the business pursuit of sustainable development and the triple bottom line. In addition to integration into corporate structures and processes, CSR also frequently involves creating innovative and proactive solutions to societal and environmental challenges, as well as collaborating with both internal and external stakeholders to improve CSR performance." (Source: Industrie Canada)

    United States: " CSR . . . involves business efforts to address the social and environmental concerns associated with business operations." (Source: Government Accountability Office).

    Mexico: "All companies in addition to fulfilling their legal obligations and generating profit for their stockholders�should take into account that their activities have an impact, whether positive or negative, on the quality of life of their employees, the communities where they conduct their operations and the overall environment as well as the business environment, in accordance with their ethical behavior." (Source: Alliance for CSR in Mexico)


    "We want to build stronger, long-term relationships with local communities and society in general. Hence, we encourage open dialogue to help us understand and respond to their concerns. As part of these efforts, many of our facilities hold regular meetings with community leaders to gather information about local needs." (Source: 2008 Corporate Social Report.)

    "We view social responsibility as our voluntary duty and believe it is the key to the continued growth and development of the company and Mexico. Through our partnerships with civil institutions, government agencies and different interest groups, we are supporting the country�s social and economic growth, as well as supporting the communities in which Modelo operates." (Source: Grupo Mondelo corporate Website,

    "To be leaders of the construction industry with products that will preserve our clients patrimony and the reputation of professionals and installers, while generating a growing and sustainable value for our distributors, personnel, and stockholders, having a lasting commitment to the community and it�s environment.

    Corporate Values
  • Respect for the Human: Working under the bases of responsibility, honesty and loyalty.
  • Focused on the Client: With a spirit of service, teamwork and positive attitude.
  • Emphasis on Quality: Always searching to improve our quality, the development of our personnel and respect towards the Ecology.
  • Results Oriented: Focusing our efforts towards responsibility, performance and the optimization of our resources. " (Source: Grup Lemosa Corporate website,
  • "I believe that a company's actions speak louder than its words. At RBC, corporate responsibility can be seen in how we govern our business with integrity, have a positive economic impact, operate with integrity in the marketplace, provide a supportive workplace, support environmental sustainability, and contribute to communities. - Gordon M. Nixon, President and CEO/" Source: Royal Bank of Canada corporate website,

    "At Manulife, we value our good name. Integrity is the hallmark of everything we do�" (Source: Manulife corporate website,

    �There�s no question that the environmental issues associated with oil sands development are pressing. However, tough issues have a way of getting solved when we apply human ingenuity and technological innovation." Corporate CEO Bruce Marsh. (Source: Q & A With The Chairman,

    Survey of American College Students (n = 35, 2009):

  • Only 28% of the recipients stated environmental or social awareness of a corporation was their reason for choosing the product

  • 100% percent of the participants chose to buy the products based on quality

  • 85% of the respondents said brand recognition was a factor in their purchase of a particular product.

  • 42% of the respondents stated they were likely to purchase products by companies known for their environmental stance

  • 42% of the participants stated they were likely to purchase products from companies that support human rights

  • 30% stated a company violating human rights would affect their purchasing habits
  • 28% said it would be unlikely that human rights violations would affect their purchasing of a product

  • 30% said they would unlikely support a price increase to benefit the environment

  • 70% of the respondents stated organizations should be very responsible concerning the environment

  • Organizations must provide products and services that satisfy cosnumers from various societies
  • Environmental concerns (see The Story of Stuff )
  • There is little agreement on what the term "social responsibility" means
  • There are individual-level efforts from individual organizations
  • Globalization presents new challenges
  • Thre is a growing awareness of abuses of human rights
  • There is an increase in poverty levels and growing disparity between the "haves" and "have nots"
  • Leadership education must include attention to the ethical implications of being a leader in a global society