North American Environment and Its Linkages to Trade

Richmond Journal of Law and the Public Interest, Dec 1999

This article will follow a deductive approach in order to comprehend the intricacies involved in the NAFTA and NAAEC's environmental provisions. It will also contextualize the inseparable relationship between environmental protection and trade which is depicted in these agreements. Part I will review and analyze the NAFTA's environmental provisions, focusing on their relevant mechanisms, nexus to trade, and shortcomings. In Part II, the uniqueness and effectiveness of the formula developed to reconcile trade and the environment in the form of the NAAEC will be introduced. Part III is divided into three categories: the Commission for Environmental Cooperation ("CEC"), Dispute Resolution Mechanisms, and the Submission Process under the NAAEC. Here, each subsection's viability in ensuring that member nations dutifully enforce their environmental laws is examined, as well as each component's efficiency in monitoring the efforts made by the Parties to reach the NAAEC's goals. Part III will consider the mandate and operations of the NAAEC and its relevant elements, the Parties and the CEC, while defining the flaws and virtues of the NAAEC. Finally, Part IV will suggest revisions to particular sections of the NAFTA and NAAEC in light of the North American experience regarding environmental protection and trade since 1994.

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North American Environment and Its Linkages to Trade

THE NORTH AMERICAN ENVIRONMENT LINKAGES TO TRADE AND ITS Nicole A. Kleman 0 0 Williams School of Law 1 North American Free Trade Agreement , Dec. 17, 1992, U.S.-Can.-Mex., 32 I.L.M. 289 The augmenting concern for the environment over the past twenty-five years is reflected in the amplification of environmental laws and international environmental agreements. This growth has occurred in the context of an increasingly integrated world economy and a rapidly expanding flow of international trade and investment. The potential for conflict between environmental and trade policy objectives was vividly realized in the debate over the North American Free Trade Agreement in the early 1990s. 31 Although the NAFTA's provisions failed to appease political views in the United States, they connote, however, a small piece of a large environmental puzzle which was ultimately completed upon the consummation of a separate side agreement on the environment, the North American Agreement on Environmental Cooperation. 32 The NAAEC's implementation reflects a heightened desire to enforce international environmental cooperation and a rising concern that the NAFTA failed to adequately protect against the adverse effects of increased trade on the environment. - viability in ensuring that member nations dutifully enforce their environmental laws is examined, as well as each component's efficiency in monitoring the efforts made by the Parties to reach the NAAEC's goals. Part III will consider the mandate and operations of the NAAEC and its relevant elements, the Parties and the CEC, while defining the flaws and virtues of the NAAEC. Finally, Part IV will suggest revisions to particular sections of the NAFTA and NAAEC in light of the North American experience regarding environmental protection and trade since 1994. PART I: THE NAFTA When the NAFTA took effect on January 1, 1994, it created the largest free trade zone in the world.34 The United States, Canada, and Mexico entered into this agreement in order to remove restrictions on imports and exports among the three Parties and to increase the opportunity for investment in each member nation.35 By removing these trade barriers, the countries anticipated economic growth through a rise in the availability of consume36r goods and stronger positions for each nation in the global market. Although the NAFTA is primarily a trade agreement, it contains environmental provisions that exceed the boundaries of previous trade agreements. This article, in part, focuses on these environmental provisions and their association with trade. While the NAFTA's purpose is to promote free trade between the Parties, its preamble lists environmental protection and conservation, sustainable development, and the enforcement of environmental la3w7s and regulations as factors meriting support within a trade agreement. In Article 104 (Relation to Environmental and Conservation Agreements), the NAFTA acknowledges various environmental commitments, as well as the relationship between trade and the environment. 38 Simultaneously, however, it provides wide boundaries for exceptions and a permissive understanding of its environmental provisions.39 The NAFTA's primary and most detrimental flaw is that it 34 See NAFTA, supranote 1. 35 See id. at 287; LESLIE ANN GLICK, UNDERSTANDING THE NORTH AMERICAN FREE TRADE AGREEMENT 3 (2d ed. 1994). 36 See NAFTA, supranote 1, at 297. 37 See id. at 297 (outlining the six trade related objectives in the NAFTA). The NAAEC refers to member nations as "Parties." 38 See NAFTA, supra note 1, at 298. In an attempt to protect the integrity of the traderestrictive enforcement provisions in multilaterally negotiated environmental treaties, the NAFTA's Article 104 exempts from challenge certain multilateral agreements including the Convention on the International Trade of Endangered Species and the Montreal Protocol. Id. 39 See id., art 104, at 298 (providing that in the event of an inconsistency between the NAFTA and certain trade obligations provided in certain international environmental fails to set any environmental standards or a particular level of environmental quality. 40 Instead, the Agreement balks at standard coofndvoemrseisotnic aenndvicroonnmfoermntaaltiorengualnadtioenms.b4r1aces each Party's unparalleled set The majority of the NAFTA's environmental provisions are included in Chapter 7 on Agriculture and Sanitary and Phytosanitary Measures ("SPS") 42 and in Chapter 9 on Standard Related Measures ("SRM"). In these chapters, the NAFTA establishes "zones" that are impervious to forbidden trade barriers and nontariff trade barriers ("NTBs"). Although they are usually ambivalent, NTBs are national standards that were constructed to obscure trade.43 The NAFTA specifically condones NTBs in Chapter 9, permitting Parties to embrace any SRM but particularly those that44would help define the Parties' levels of environmental protection. Moreover, any SPS "necessary for the protecti (...truncated)


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Nicole A. Kleman. North American Environment and Its Linkages to Trade, Richmond Journal of Law and the Public Interest, 1999, Volume 3, Issue 3,