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1 (May 28, 2015)

handle is hein.crs/crsuntaahzn0001 and id is 1 raw text is: Con qressional Research Service horr g [e gisIaiv~d bit moe 1914 0 May 28, 2015 Environmental Provisions in Free Trade Agreements (FTAs) Overview 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 policy makers and stakeholders believe that trade liberalization and environmental protection are 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. By executive order in 1999, President Clinton required trade agreements to undergo environmental assessments. In the Trade Act of 2002 (P.L. 107-210), Congress included environmental provisions as a principal 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. The structure and use of environmental provisions is currently under debate in the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), and in Congress' consideration of TPA renewal legislation. 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, Article XX lays out a number specific exceptions to its provisions-including exceptions for natural resources and protection of public health-to 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, they have heard only nine Article XX cases during their existence. 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 and elimination of fishing subsidies and fossil fuel subsidies are being negotiated in the WTO, G-20 and other fora. 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 environmental laws to promote trade or investment. Fulfill obligations under referenced multilateral environmental agreements (MEAs). Develop mechanisms to enhance environmental performance. Retain the right to exercise the reasonable, articulable, bona fide exercise of discretion in enforcement. Other provisions include: Enforceable dispute settlement and consultations Cooperative and trade capacity building. Environmental Affairs Council. Source: CRS analysis based on KORUS FTA. Environmental Provisions in U.S. FTAs 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. www.crsgov 7-570

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