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1 1 (December 6, 2016)

handle is hein.crs/govcbzu0001 and id is 1 raw text is: 01;0 , riE SE.,., , ,. ,- , , Updated December 6, 2016 Environmental Provisions in Free Trade Agreements (FTAs) Linkages between trade and environmental protection have long been a concern to some U.S. policymakers and stakeholders. The central question is whether trade liberalization (i.e., the removal of barriers on the free exchange of goods and services between nations) advances shared economic and environmental goals. Some observers argue that economic expansion brought on by trade liberalization adversely impacts the environment. Among other concerns, they contend that for developing countries, international competition may lead them to adopt less stringent environmental standards or to engage in more polluting activities. Thus, they claim that environmental provisions are necessary in trade agreements to help raise or maintain international standards and protect U.S. businesses and workers from perceived unfair competition. Other policymakers and stakeholders believe that trade liberalization and environmental protection can be mutually supportive. They argue that while economic growth may adversely impact the environment during the initial stages of industrialization, it can also provide resources to mitigate such effects as countries develop. They also argue that trade liberalization can support U.S. environmental goals through the elimination of tariffs on environmental goods, and the reduction of trade-distorting subsidies. Trade-related environmental provisions in U.S. FTAs were first introduced in the North American Free Trade Agreement of 1994 (NAFTA), Through the years, they have moved from side agreements to integral chapters within FTA texts, and increasingly have incorporated cooperation and dispute settlement (DS) mechanisms. President George H.W. Bush instituted the first environmental assessment of a trade agreement with NAFTA in 1992, and President Clinton formalized the practice by executive order in 1999. In the Trade Act of 2002 (P.L. 107-210), Congress included environmental provisions as a principal trade negotiating objective in renewing the President's Trade Promotion Authority (TPA) (previously known as fast-track) legislation. Since then, the United States has been at the forefront of using trade agreements to promote core environmental protections. Additional negotiating objectives were incorporated into the Bipartisan Comprehensive Trade Priorities Act (TPA)(P.L. 114-26), enacted into law on June 29, 2015. Environmental provisions in the proposed Trans-Pacific Partnership (TPP) and the potential Transatlantic Trade and Investment Partnership (T-TIP) are currently under debate. T~h\ GATI T ,n d he W'TI0 Mechanisms to address environmental protection have been a part of international trade agreements since the General Agreement on Tariffs and Trade (GATT) was signed in 1947. While the GATT does not contain affirmative environmental commitments, Article XX lays out a number of general exceptions to its provisions-including exceptions for natural resources and protection of human, animal, or plant life, and public health-that could allow for environmental policy measures. Since its establishment in 1995, the World Trade Organization (WTO)-the successor to GATT-has addressed environmental issues through its dispute settlement system and through Doha Round negotiations concerning the relationship between existing WTO rules and international environmental treaties, known as multilateral environmental agreements (MEAs). While there has been much focus on the GATT and WTO dispute settlement systems, there have been only nine Article XX cases on environmental issues to date. In addition to the WTO's Doha Round, a plurilateral group of WTO members is negotiating the elimination of tariffs on environmental goods such as wind turbines or solar panels. Further, the reduction or elimination of fishing and/or fossil fuel subsidies is being negotiated in the WTO, G-20, and U.S. free trade agreements. Current Key Environmental Provisions in U.S. FTAs. A party shall: * Not fail to effectively enforce its environmental laws in a manner affecting trade and investment. * Not waive or derogate from environmental laws to promote trade or investment. * Fulfill obligations under certain multilateral environmental agreements (MEAs). * Develop mechanisms to enhance environmental performance. * Retain the right to exercise the reasonable or bona fide exercise of discretion in enforcement. Other provisions include: * Enforceable dispute settlement and consultations. * Cooperation and trade capacity building. * Environmental Affairs Council. Source: CRS. Although the WTO has played an important role in global environmental discussions, bilateral and regional FTAs have also impacted environmental policies. FTAs commonly include more detailed provisions than the WTO on trade-related issues such as the environment. A brief evolution of these provisions is outlined below. The North American Free Trade Agreement (NAFTA). The first U.S. bilateral FTAs-with Israel (1985) and Canada (1988)-did not contain environmental provisions. NAFTA (1994, with Canada and Mexico), however, included a list of MEAs whose provisions generally would .O 'T p\w -- , gnom goo mppm qq\ a , q 'S I 11LIANJILiN,

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