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1 1 (September 1, 2023)

handle is hein.crs/govemsh0001 and id is 1 raw text is: Congressional Research Service Informing the Iegislative debate since 1914 0 Updated September 1, 2023 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 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 affects the environment. Among other concerns, they contend that international competition may lead developing countries to adopt less stringent environmental standards to encourage producers to relocate from jurisdictions wit more stringent environmental standards. Thus, some observers argue that environmental provisions are necessary in trade agreements to help raise international environmental standards and protect U.S. businesses and workers. Other policymakers and stakeholders believe that trade liberalization and environmental protection can be mutually supportive. They argue that while economic growth may adversely affect 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, among other actions. Trade-related environmental provisions in U.S. FTAs were first introduced in a side agreement to the North American Free Trade Agreement of 1994 (NAFTA). Through the years, they have moved from side agreements to integral chapters within U.S. FTA texts, and increasingly have incorporated cooperation and dispute settlement (DS) mechanisms. In 1992, President George H.W. Bush instituted the practice of conducting an environmental assessment of trade agreements in conjunction with the consideration of NAFTA, 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) 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 United States-Mexico-Canada Agreement (USMCA) were, in part, based on these negotiating objectives. The GATT and the WTO 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, its 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. The agreements establishing the World Trade Organization (WTO) in 1995 maintained these exceptions, which have been the subject of several disputes resolved by the WTO's dispute settlement system. The WTO has hosted a variety of multilateral and plurilateral negotiations. The Doha round of multilateral negotiations were supposed to, among other things, clarify the relationship between existing WTO rules and multilateral environmental agreements. A plurilateral group of WTO members is also engaged in negotiations to eliminate tariffs on environmental goods, such as wind turbines or solar panels. However, both these negotiations have stalled. In 2022, WTO Members finalized a limited agreement that prohibits subsidies to certain fisheries in order to reduce overfishing. The agreement would enter into force if it is ratified by two-thirds of WTO members Environmental Provisions in U.S. FTAs Although the WTO has played an important role in global environmental discussions, bilateral and regional FTAs have also addressed 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. 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. Adhere to 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.

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