Trading the Environment

The United States is currently engaged in its most significant Free Trade Agreement (FTA) negotiations since the passage of NAFTA in 1992. These negotiations are over the proposed Trans-Pacific Partnership agreement and would involve an FTA between the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The negotiations have been quietly occurring for the last five years and are a major aspect of President Obama’s “pivot to Asia.” However, despite attempts to maintain a low profile, the negotiations have not been without controversy. Disagreements and public outcry in participating countries over proposed Intellectual Property requirements, agricultural subsidies, and state owned enterprises has threatened to derail the negotiations. Now, with the release of a draft of the agreement’s environmental chapter by Wikileaks this week, it appears the proposed environmental rules will join that list.

As the New York Times reported this week the weak draft environmental chapter represents a concession by the U.S. to the interests of many of the other participating countries. While the U.S. has strict environmental requirements for its FTAs (more on that in a minute), many of the participating countries see binding environmental regulations as an unfair constraint on their development. Indeed, legally binding environmental agreements may be a deal breaker for countries like Vietnam in the negotiations.

Environmental groups, understandably, have blasted the leaked chapter as a major step backwards – suggesting that this chapter would give Obama a worse environmental record than Bush – and a significant missed opportunity. The U.S., since a 2007 agreement between Congressional Democrats and the Bush Whitehouse, has required stringent and legally binding environmental regulations in all FTAs. This agreement, in effect, meant that the provisions of major international environmental agreements that the U.S. was a signatory to became part of any FTA. Further, these provisions were given the same legal status and, crucially, were accorded the same methods of enforcement as the commercial aspects of the deal. That meant violating the terms of the Ramsar Convention on Wetlands could be punished by trade sanctions in the same way employing goods dumping or protectionist tariffs could be punished.

Incorporating legally binding environmental regulations into FTAs was a notable achievement. It provided for legal and commercially punishing enforcement of international environmental agreements that have been notoriously difficult to enforce. Because many international environmental agreements are primarily voluntary (the Kyoto Protocol, for example) there are no binding mechanisms for enforcement. Countries can sign on as a PR measure and violate the agreement at will with few consequences. This is the classic problem with international environmental regulations. By incorporating the terms of these agreements into FTAs, the U.S. took important steps towards making these voluntary agreements non-voluntary and actually ensuring compliance. According the environmental chapters the same legal status as the commercial chapters in the FTAs was critical and it represented progress in overcoming the free-rider problem inherent in voluntary international environmental agreements.

In this environment the current draft environmental chapter of TPP represents a major step backwards. TPP is an opportunity to add nine more countries to the list of countries which would have a commercial interest, and legal obligation, to obey the terms of international environmental agreements. While the U.S. has been derided for not signing numerous environmental agreements, incorporating legally binding environmental language into TPP would be a major positive step in protecting the global environment.

The roll-back of environmental protection as part of the TPP negotiations also represents a disregard for the input of the youth whose world will be shaped by the eventual TPP agreement. While the 2011 Future Partners Forum was not an official part of the negotiations nor representative of every country, or young person, who will be affected by the eventual agreement, it was convened with the explicit purpose of bringing the views of typically marginalized but affected youth to the table in a formal setting. As part of that, twenty-one participating Americans and New Zealanders produced a set of three recommendations for negotiators to consider, reflecting the interests and concerns of young people in two of the TPP countries. First among these was that the agreement include “environmental impacts in the bottom line.” The agreement should give the environment clear protections and an equal legal weight to commercial interests, in effect, maintaining the status quo of U.S. FTAs. The current chapter on the environment is an explicit rejection of this recommendation.

Perhaps there are sound reasons for such a rejection. FTAs, after all, are about much more than the environment and the TPP is a strategic part of the Obama administration’s larger foreign policy. However, rolling back environmental protections in the agreement would certainly be a missed opportunity for Obama to burnish his environmental credentials without needing the approval of an intransigent Republican majority in the House. It would be one more rejection of the interests of younger generations and a clear rejection of the notion that sustainability has permeated the highest levels of business and government. Most importantly, it sets a poor precedent for the inclusion of environmental protection in future FTAs.

Image Credit: Chilean Government via Wikimedia Commons.


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