Taking Stock: Trade's Environmental Scorecard after Twenty Years of 'Trade and Environment'
45 Wake Forest L. Rev. 319 (2010)
36 Pages Posted: 16 Sep 2019
Date Written: 2010
In many ways, the North American Free Trade Agreement (NAFTA) and the North American Agreement on Environmental Cooperation (NAAEC) negotiations represent the high water mark for linking trade and environmental issues. Those negotiations responded to a number of specific concerns of environmentalists. In the NAFTA itself, the Parties agreed not to attract foreign investment by lowering environmental standards. Most significantly, the NAAEC established the Commission for Environmental Cooperation (CEC), a trinational environmental institution to address trade-environment linkages and coordinate environmental policy throughout North America. Within the CEC, the governments created a Secretariat with some independent functions to explore environmental issues within the broad scope of work of the CEC and investigate allegations from citizens that one of the three Parties was failing to enforce its environmental law effectively. This citizen submission process responded to concerns that Mexico was failing to enforce its environmental laws, thus leading to immense environmental problems long the U.S-Mexico border.
Subsequent FTAs, however, have failed to act on the lessons learned from the NAFTA/NAAEC and otherwise fallen short in responding to criticisms from the environmental community about the process and scope of trade agreements. Concerning process, the environmental community remains woefully underrepresented on advisory committees to the United States Trade Representative. Even where environmentalists predominate, as on the National Advisory Committee, which advises EPA on trade and environment issues arising under the NAAEC, the agencies largely ignore the advice of the advisory committee. In addition, trade disputes involving important questions of public policy remain, on just a couple of exceptions, confidential affairs between nation states or, in the case of investment disputes, between private investors and governments. Nonetheless, while certain aspects of trade agreements have become more transparent—the WTO publishes dispute settlement reports on its website and the USTR places its submissions online—the proceedings of tribunals remain closed and the documents confidential as a matter of policy. FTAs continue to allow private investors recourse to confidential investment proceedings where the public rarely is made aware even of the nature of a dispute. Post-NAFTA FTAs have whittled away at the institutions developed in the NAAEC designed to strengthen trade-environment linkages.
Substantively, the environmental provisions of FTAs fail to account for the most important effect of trade—scale. Owing to the notorious Tuna/Dolphin dispute, FTAs continue to focus on regulatory effects by committing Parties to maintain high levels of environmental protection and prohibiting them from lowering standards to attract investment. Owing to the NAAEC’s emphasis on failures to enforce environmental law, FTAs also focus on competitiveness effects, with a continuing focus on investigating failures to effectively enforce environmental law. In addition, due to a number of inconsistent decisions of investment tribunals concerning NAFTA’s investment provisions, environmentalists have sought common language to key investment obligations, such as expropriation and minimum standard of treatment. Nonetheless, each FTA tweaks the language of these obligations, thereby enhancing ambiguity.
With the expiration of the President’s Trade Promotion Authority, the current Congress has the opportunity to move the trade-environment agenda forward. This article assesses the TRADE Act of 2009 (H.R. 3012) to identify the extent to which Congress has responded to 20 years of the trade-environment debate and the on-going criticism of current trade agreements.
Keywords: Trade, Environment, NAFTA, WTO, trade agreements
JEL Classification: F1, F53, F55
Suggested Citation: Suggested Citation