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Canada, Mexico and the United States cooperating to protect North America's shared environment.
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The Environment and NAFTA: Understanding and Implementing the New Continental LawBy Pierre Marc Johnson and André Beaulieu Island Press
Island Press Foreword The North American Agreement on Environmental Cooperation (NAAEC), concluded in August 1993, marked a major step in the legal, political, and institutional regimes affecting environmental protection and trade and environment processes in North America. This book is the first systematic attempt to understand the legal consequences for the environment of the NAFTA and its accompanying side agreement, the NAAEC. The NAAEC represents the conclusion of a debate surrounding NAFTA about the proper balance between trade and the environment and future directions for North American environmental enhancement. It also offers a significant opportunity to build on the existing North American framework through its Commission for Environmental Cooperation. The Commission provides a forum to aid the NAFTA Parties in avoiding and resolving environment and trade disputes, and it sets up a mechanism for cooperation in the development of sound and viable environmental policies, the enforcement of environmental laws and regulations, the optimum use of environmental technology, and the reduction of pollution in North America. The Agreement and the Commission are looked to with a great sense of expectation by a wide range of communities of stakeholders within, and beyond, North America. In practice, the extent to which these opportunities are realized and the particular directions they take will ultimately be defined by the specific elements of the legal agreement itself and the work of the Commission and their governments, in elaborating and implementing the mandate of the agreement. This is particularly the case as many of the legal elements embodied in the Agreement are novel and without precedent and will therefore be subject to ongoing interpretation in the context of evolving environmental concerns of North Americans. It is thus vital that legal scholars with a deep understanding of, and practical experience in, the broader policy context within which the NAFTA and NAAEC's legal regime will take effect explore in detail, with sensitivity, and in a forward-looking way, the provisions and potential of the NAAEC. Pierre Marc Johnson and André Beaulieu are exceptionally well positioned to take up this task. It is a challenge that requires the legal and analytic talents of those with distinguished experience in government and working with international institutions on a regional and global scale. It draws on considerable years of experience working with the many communities that form the constituencies of both NAFTA and the Commission, and who all have a stake in the successful resolution of trade concerns with the environment. More broadly, this task calls for an understanding of the human dimensions of sustainable development and a broad concern for social justice and equity. This book is particularly timely. It will have a growing relevance as the provisions in the agreement are tested in its implementation and as the governments, their publics, and perhaps the Commission itself take up the larger task of addressing how the innovative NAAEC regime might be relevant to new issues that arise. At a time when the three parties of the NAFTA are committed to geographically broader processes of trade liberalization and environmental dialogue, the innovative provisions and far-reaching potential of the NAAEC stand out as an intellectual model and an institutional platform on which to build. This book will represent a major contribution to the literature for legal professionals, policy makers, teachers, and students. The Commission for Environmental Cooperation enthusiastically welcomes the efforts of the authors. This book represents an important contribution to the work that has been undertaken by North Americans in their attempt to develop a deeper understanding of the economic and environmental interdependencies among us, and to an intellectual assessment of their implications for the future and their relevance to the ongoing hemispheric and global experience. Victor Lichtinger Preface Globalization is not only about more trade and investment. Enhanced commercial relations between the United States and the rest of the world, including its major and immediate partners Canada and Mexico, also means more people moving, more ideas exchanged and confronted, as well as a sharing in all three countries of concerns among citizens, civil organizations, and governments about the impacts of trade. This is the social agenda of trade liberalization of which environmental concerns represents a major and enduring component. While the United States agreed with Canada and Mexico to increase trade between the three countries, it also wanted the partners to include environment-related provisions in the legally binding commercial agreement. To what extent can the United States, Mexico, or Canada implement on their territory international treaties to protect the ozone layer or save endangered species using measures that adversely affect trade? To what extent is the sovereignty of each country limited as it adopts environmental legislation, consumer protection regulations, or measures that are there to protect the health of humans, animals, or plants, when these measures affect the trading of goods between the three commercial partners? How does this new trade agreement address the concept of weakening one's environmental legislation to attract new industries? These are all very practical questions, not only asked by the environmental community but also by those whose chief interest is trade policy or the efficient operation of their international business. This book analyzes those preoccupations that were at least partially addressed in the 1992 North American Free Trade agreement between the United States, Canada, and Mexico. It soon became obvious during that presidential election year that more would have to be done. The three countries, after having wound up their discussions on trade and some environmental issues, began negotiating a very broad-scoped agreement of environmental cooperation (science, education, training, implementation and enforcement of legislation, standard harmonization questions, and so on). By doing so, the United States, Canada, and Mexico set up an original and novel set of institutions designed to implement a new (and untried) set of continental law. As the commercial and the environmental agreements are gradually implemented, at the very moment Chile's accession to NAFTA is contemplated, it seemed to the authors appropriate and timely that this book should be made available to trade experts, the environmental community, as well as to academics and students concerned about law, trade, environment, and the social agenda of trade in the Americas. This work purports to contribute to the understanding of the design and operation of new North American institutions. The authors thus hope that this book will allow a broad, specialized, or concerned audience to better grasp, through the presentation of this new continental law regime, the fundamentals of economic and social integration in the hemisphere. Contents Foreword xiii Preface xv Acknowledgments xvii Introduction 1 Part I The Context of NAFTA and NAAEC 7 Chapter 1 Historical and Regional Context 9 Chapter 2 Trade and Environment: Issues for the 1990s 35 Part II Environmental Content in the Main Treaty Text 65 Chapter 3 NAFTA and the Ability of Governments to
Legislate in Favor of the Environment 69 Chapter 4 NAFTA's Downward Pressure on Environmental
Norms and Upward Harmonization 111 Part III The North American Agreement on Environmental Cooperation 119 Chapter 5 Why a North American Agreement on
Environmental Cooperation? 121 Chapter 6 Institution Building: Creation of the North
American Environmental Commission 131 Part IV Dispute Settlement: The Effectiveness of Domestic Environmental Enforcement 171 Chapter 7 A Strictly Intergovernmental Process 175 What Is an Environmental Law? 184 Chapter 9 Legal Standard for Enforcement Diligence:
What Is Ineffective Environmental
Enforcement? 193 Chapter 10 Sanctions for Noncompliance 211 Chapter 11 A Special Regime for Canada 224 Chapter 12 Assessment of NAAEC Dispute Settlement Procedure 237 Part V Conclusion 241 Chapter 13 NAFTA/NAAEC and the Environmental
Agenda of Trade 245 Chapter 14 Redefining National Sovereignty in the
Hemisphere 256
Appendixes 277 Introduction This book deals with NAFTA's environmental implications. It is about the context in which such implications were brought to the negotiating table and the legal mechanism put in place to address them, as well as the original trilateral institution set up to maintain the focus on environmental cooperation at the continental level. On 17 December 1992 Canada, Mexico, and the United States entered into a historic trade pact, the North American Free Trade Agreement (NAFTA).1 Short of a common market, this agreement, which entered into force on 1 January 1994, is the most comprehensive framework regarding trade and investment ever signed between such large sovereign countries. A number of major issues such as labor market disruptions or import surges surrounded the debate over the agreement and fueled the NAFTA controversy. No argument, however, received as much coverage as the impact of NAFTA on the environment. In the three countries, opponents as well as proponents of the trade treaty used the environment to support their positions. The intensity and the relevance of this debate prompted the American, Canadian, and Mexican governments to include unprecedented environmental provisions in NAFTA and to sign a supplemental North American Agreement on Environmental Cooperation (NAAEC)2 in late summer of 1993, a few weeks before the ratification vote in the U.S. Congress. The NAAEC also entered into force on 1 January 1994. This book is thus about the important and ground-breaking international environmental public policy-making that took place in the context of NAFTA. Special attention is devoted to the role and positions of nongovernmental organizations (NGOs), as their contribution to both the emergence of the NAFTA environmental debate and its resolution in trilateral arrangements is central to the short history of NAFTA. This book also seeks, at an early stage, to inform the reader's understanding of the environmental stakes in NAFTA and the context in which the three governments had to integrate environmental concerns in a large, complex, commercial negotiation. It dwells at length on the innovative strategies and techniques that were used to devise the final legal package, their inadequacies, and their great potential. International law is the main tool of analysis of this book because in the international context, the boundaries between law and policy remain very porous and each informs the other. International environmental cooperation between states is usually formalized in legal instruments, and such instruments often form the foundation upon which cooperation is then expanded further. The reader will find more than a descriptive attempt at stating the new law in the light of international precedents, or an illustrated narrative of how environmental issues came to be so prevalent in the NAFTA debate. Rather, the authors are commenting at length on the policy and strategic choices embedded in the agreements, while always trying to let the reader know when analysis becomes opinion. It is hoped that the balance struck between traditional legal analysis and policy commentary will provide the reader with useful insight. This book is also a modest attempt at gauging the impact of globalization (and, in the case of North America, regionalization or continentalization) on our efforts to protect the human environment. NAFTA is of course very important for the future of Canada, Mexico, and the United States, but it has a larger significance. The Caribbean countries, North, South, and Latin America seem to be moving swiftly toward tighter commercial relations and even a form of economic integration. Hardly a month goes by without the announcement of a new trade initiative in the region. While the debate on how such integration will proceed is far from nacec.over, it is plain to see that the so-called social agenda of trade, which includes environmental, labor, and broad human rights issues, will and should remain a pressing concern. NAFTA puts forth a particular (and largely untried) model of cooperation on labor and environmental issues between trade partners that will durably influence the process and the substance of economic integration in the Americas. Indeed, to know how NAFTA parties have chosen to address environmental issues may provide a glimpse at the future of regional environmental cooperation. After the Miami Summit of the Americas in December 1994, one might say that the New World finds itself at a crossroad encountered by the Old European World half a century ago. Evidently, as the circumstances and the actors are very different, the way the economic area of the Americas will be built will be vastly different than that which led to the establishment of the current European Union. It is safe to say that NAFTA and its successor agreements will not yield an institutional harvest as abundant as that of Europe for a very long time, if ever. Nevertheless, the same fundamental principle seems to be at work: trade and investment liberalization forcing states into a much broader cooperative agenda on social issues. In and of itself, the environmental aspects are important and merit much inquiry and study. Because the environmental cooperative agenda is the most advanced, however, it might tell us a lot about the future of the rest of the social agenda of trade in the region. There are at least three specific ways in which the environmental content of the NAFTA package will influence the broader geographic trade and investment liberalization efforts. First, it creates an institution, namely the Commission for Environmental Cooperation (CEC), that will have a legitimacy and an expertise of its own and that may in turn become an important actor in the unfolding integration process. As a small step toward the recognition of shared sovereignties in the environmental jurisdiction, it might become the focus of attention of would-be NAFTA partners. Second, the parallel environmental agreement, NAAEC, institutes an environmental dispute settlement process of a peculiar kind that could, in time, become a genuine rule-generating instrument. Such rules will often find a broader constituency in the region if they favor both environmental protection and smoother trade competition. Third, NAAEC sketches the outline of a new, more significant role for nongovernmental organizations in international environmental forums. Environmental groups and their allies will argue intensely for such new openings to be replicated in regional and global trade and environmental arrangements. This broader context is a further reason why the significance of NAFTA's environmental choices can hardly be overestimated. This book will therefore attempt to explain how the functioning of NAFTA (and its interaction with the environmental parallel agreement) might take place and how they will impact on trade policy and practices, domestic and regional environmental protection efforts, and the relationships among Canada, Mexico, and the United States. Part I of this book, devoted to the general context of NAFTA and the debate surrounding its environmental implications, will be divided in two chapters. The first will present cursorily the political and historical context of North American trade and political relations in the early 1990s. It will also consider the relatively new place that environmental concerns and their promoters, the nongovernmental organizations (NGOs), occupy in the political landscape of the continent, especially in the area of foreign and trade policy. The second chapter of Part I will provide some insight into the recent but heated debate over the relationships among international trade, the environment, and the elusive search for sustainable development. This backdrop of GATT negotiations and global questioning is essential in assessing the shortcomings and the progress achieved by NAFTA. Part II will present and analyze, in the light of precedents, the provisions of NAFTA that refer to or may have an impact on environmental policies and measures taken to implement them. Close attention will be paid to the treatment of environmental measures by NAFTA's standards-related trade disciplines, including the relevant NAFTA sections on sanitary and phytosanitary measures, technical barriers to trade, and the special provisions on international environmental agreements. Part II will, moreover, examine the provisions of NAFTA that address the concern that pollution havens may act as investment magnets, as well as the treatment of environmental standards harmonization under NAFTA. Part III is concerned specifically with the NAAEC and its potential for improving environmental cooperation in North America. The origins of this environmental side-agreement will be explained and possibilities for its relationship with NAFTA and NAFTA institutions will be examined. Part III will also describe the newly created Commission for Environmental Cooperation and its three component parts: the Council (of Ministers), the permanent Secretariat, and the Joint Public Advisory Committee (JPAC), as well as the broad mandates that were given to those three bodies by the NAFTA parties. Special attention will be paid to two aspects of the NAAEC: first, the special investigatory reporting functions of the CEC, and second, its relationship with NGOs. Part IV will focus on the formal procedures for the settlement of disputes that relate to the effectiveness of domestic environmental enforcement practices. Particular attention will be given to the issues of what constitutes sanctionable ineffective environmental enforcement, the definition of environmental laws and regulations, the possible consequences for noncompliance by parties with environmental enforcement obligations, as well as a special set of rules that apply only to Canada. Part V will present the authors' preliminary conclusions on the environmental record of the NAFTA/NAAEC package and offer some suggestions on how to ensure that the new institutions and procedures set forth in both trilateral agreements translate into concrete gains for the environment. Finally, recalling the broader regional and global context, the authors will attempt to assess the meaning of NAFTA and NAAEC for the next stages of Pan-American economic integration and environmental cooperation. Notes 1. North American Free Trade Agreement, 8 December 1992, Canada-Mexico-United States, 32 I.L.M. 289 [hereinafter NAFTA]. See Appendix II. See also: North American Free Trade Agreement Implementation Act, S.C. 1993, c.44; North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057. 2. North American Agreement on Environmental Cooperation, 8 September 1993, Canada-Mexico-United States, 32 I.L.M. 1480 [hereinafter NAAEC]. See Appendix III. See also: An Act to Amend the Crown Liability and Proceedings Act; S.C. 1994, c.11; Federal Implementation of the North American Agreement on Environmental Cooperation, Executive Order 12915 U.S.C.C.A.N. (108 Stat.) B42. |