2 The Evolution of Environmental Provisions in US Trade Agreements

Environmental provisions in US trade agreements have gotten progressively stronger over time. Scholars have sliced this evolution in several ways. Some see only two phases, differing primarily in terms of how dispute settlement is treated (Bourgeois, Dawar, and Evenett 2007).1 Others identify four phases (Gresser 2010). Although our own assessment is closely in line with Gresser’s, we slice the history slightly differently. Gresser groups the US-Jordan Preferential Trade Agreement (PTA), opened for signature in 2000, with the seven that followed it (until 2006) because those subsequent agreements largely replicate the environmental provisions found in the Jordan agreement. However, we separate out, into a distinct phase, those agreements opened for signature after the renewal of “fast-track” authority in 2002, because with that renewal came a strengthening of environmental provisions over what we saw in the US-Jordan PTA.

More specifically, during the first phase (1985–1999), the United States recognized connections between trade and environmental goals, but positioned the latter as a secondary priority. This was done by incorporating highly circumscribed environmental exceptions to trade rules, rather than pursuing specific environmental objectives directly. During the second phase (1992–1999), US trade policy began to flesh out environmental provisions in trade agreements by identifying environmental objectives and developing norms to navigate potential synergies and conflicts between environmental protection and trade liberalization. Centrally, this was done by creating environmental cooperation mechanisms and by leveling the playing field to ensure that Mexico and other developing countries did not benefit economically from lower environmental standards and lax enforcement.

During phase three (2000–2001), the US executive branch began to integrate accountability mechanisms for environmental issues into its PTA review process. In phase four (2002–2005), the US Congress came on board by reinforcing and further strengthening those environmental provisions identified by the executive branch. Finally, during phase five (2006-present), the United States has greatly expanded its reach in using trade agreements to achieve environmental goals, especially those that it has already committed to under multilateral environmental agreements (MEAs) or otherwise through domestic legal instruments by, for example, greatly strengthening dispute-settlement provisions for environmental issues.

Rather than representing a departure from the previous phase, each phase has built on the last, incorporating and extending the reach of the environmental provisions contained therein. Importantly, this has been an issue that has historically enjoyed strong bipartisan support. Indeed, once an environmental provision is included in one US PTA, that provision often serves as a template for subsequent agreements irrespective of who was in the White House at the time of negotiations, signature, and/or entry into force (see table 2.1). Indeed, more often than not, environmental provisions are replicated verbatim from one US PTA to the next.

Finally, it should be noted that although the Trump administration has pulled the United States back from multilateral processes, including those related to trade negotiations, the policies developed during the third phase continue to influence ongoing bilateral and regional trade negotiations. As explained in the pages that follow, US negotiating objectives are defined by law and thus cannot easily be changed by presidential whim. This suggests that the third phase will continue into the foreseeable future, even if the pace of new negotiations has slowed under the Trump administration. We discuss this in more detail below in the context of the recent signature of United States, Mexico, and Canada Trade Agreement (USMCA), including as related to the 2018 renewal of US Trade Promotion Authority on June 30, 2018.

The next section provides an overview of the types of environmental provisions we find in US PTAs. This is followed by a narrative history that traces the evolution of environmental provisions in US trade agreements over time. That history is organized along the five phases of US trade-environment politics identified above, and it is explained against the political and legal backdrop that shapes and defines US negotiating objectives and strategies in trade-environment politics. The concluding section briefly compares the United States to other countries and suggests areas where the United States could integrate environmental provisions into future PTAs.

Table 2.1

US Preferential Trade Agreements, 1985–2018

PTA^a	Phase	Year Negotiations Began	Administration When Negotiations Began	Year of Signature	Administration at Time of Signature	Entry into Force for US	Administration at Time of Entry into Force
Israel	1	1984	Reagan	1985	Reagan	1985	Reagan
NAFTA	2	1991	H.W. Bush	1992	Clinton	1994	Clinton
Jordan	3	2000	Clinton	2000	Clinton	2001	G. W. Bush
Vietnam	3	~1995	Clinton	2000	Clinton	2001	G. W. Bush
Singapore	4	2000	Clinton	2003	G. W. Bush	2004	G. W. Bush
Chile	4	2000	Clinton	2003	G. W. Bush	2004	G. W. Bush
Australia	4	2003	G. W. Bush	2004	G. W. Bush	2005	G. W. Bush
CAFTA-DR	4	2004	G. W. Bush	2004	G. W. Bush	2006	G. W. Bush
Morocco	4	2003	G. W. Bush	2004	G. W. Bush	2006	G. W. Bush
Bahrain	4	2004	G. W. Bush	2004	G. W. Bush	2006	G. W. Bush
Peru	5	2004	G. W. Bush	2006	G. W. Bush	2009	Obama
Colombia	5	2004	G. W. Bush	2006	G. W. Bush	2012	Obama
Oman	5	2005	G. W. Bush	2006	G. W. Bush	2009	G. W. Bush
Korea^b	5	2006	G. W. Bush	2007	G. W. Bush	2012	Obama
Panama	5	2004	G. W. Bush	2007	G. W. Bush	2012	Obama
TPP^c	5	2008	G. W. Bush	2016	Obama	NA	NA
USMCA	5	2018	Trump	2018	Trump	NA	NA

^a The agreements also include the content of their associated environmental cooperation agreement, if applicable.

^b Currently under renegotiation by the Trump administration.

^c The Trump administration withdrew from this agreement in 2017.

Overview of Environmental Provisions in US Preferential Trade Agreements

Based on a coding analysis of all US PTAs using the Trade and Environment Database (TREND),2 we identify 130 distinct environmental provisions in US PTAs. These provisions are diverse, but can be grouped into the following 17 categories: preamble, affirmation of state sovereignty, domestic levels of protection, enforcement of domestic measures, public participation, transparency, improvement of environmental governance, implementation of the agreement, cooperation, technical assistance, coherence with non-environmental issues, specific environmental issues, limits to environmental measures, environmental exceptions, dispute settlement, joint institutions, and relationship with MEAs.

Table 2.2 below briefly explains each of the 17 categories; a more detailed description of each category can be found in the TREND codebook, which is contained in the appendix at the end of this chapter.

As noted above, TREND identifies 130 specific environmental provisions across these 17 categories. The appendix at the end of this chapter summarizes where each of these 130 environmental provisions can be found in individual US PTAs. First, however, we provide a narrative history of how these provisions found their way into US PTAs.

Phase One: 1985–1991

The first phase of trade-environment linkages in US trade policy was quite circumscribed, including only the 1985 US-Israel PTA. While the Israel PTA does not mention environmental issues or objectives explicitly, it adopts the general exceptions contained in the 1947 General Agreement on Tariffs and Trade (GATT). Those exceptions, which are replicated in all subsequent US PTAs, allow for countries to adopt environmental policies that would otherwise conflict with PTA obligations under certain conditions. Specifically, GATT Article XX(b) and (g) articulate that countries may implement environmental policies that:

Table 2.2

Categories of Environmental Provisions in US Preferential Trade Agreements

Categories	Description
Preamble	References to the need to protect the environment in the preamble of the trade agreement.
State sovereignty	Recognitions of state sovereignty over natural resources, including the regulatory, administrative, and judiciary sovereignty to govern environmental protection.
Domestic levels of protection	Commitments to maintain or to improve the level of environmental protection and condemnations of efforts to lower environmental protection for economic reasons.
Enforcement of domestic measures	Commitments to enforce domestic environmental law and mechanisms to improve domestic enforcement.
Public participation	Provisions related to the participation of stakeholders in domestic and international environmental law making.
Transparency	Provisions related to transparency of governmental or intergovernmental actions and decisions related to environmental protection.
Improvement of environmental governance	Promotion of specific policy instruments, such as green taxes, public-private partnerships, and certification schemes.
Implementation of the agreement	Mechanisms to facilitate the implementation of the agreement’s environmental provisions, including monitoring, assessment, and funding mechanisms.
Cooperation	Commitments to cooperate in the field of the environment, including between scientists, regulatory agencies, and custom officers of all parties.
Technical assistance	Commitments from one party to provide assistance, capacity building, or funding to another party in the field of environmental protection.
Coherence with non-environmental issues	Provisions related to coherence between environmental policies and some other issue areas, including energy tourism, urban planning, health, and agriculture.
Specific environmental issues	Measures related to specific environmental issues, such as ground water, wetland, fisheries, invasive species, air pollution, oil spills, pesticides, or hazardous waste.
Limits to environmental measures	Commitments that environmental measures should not be used for protectionist purposes.
Environmental exceptions	Exceptions to trade commitments on environmental grounds, including for trade services, investment protection, and the liberalization of public procurement.
Dispute settlement	Environmental measures related to dispute settlement, including for disputes between private parties, in investor-state disputes, or in state-state trade disputes.
Joint institutions	Creation of institutions to facilitate environmental cooperation.
Relationship with MEAs	Measures related to the ratification, implementation, or prevalence of some environmental agreements.

(b) [are] necessary to protect human, animal or plant life or health; [or]

(g) [relate] to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.

Although on the surface these provisions seem broadly permissive, they have been interpreted quite narrowly under the (1947) GATT and subsequently under the WTO (Jinnah 2003; Moran 2017). Centrally, the chapeau to GATT Article XX requires that such exceptions are applied in a way that does not constitute “arbitrary or unjustifiable discrimination” between countries, which along with the so-called “necessity test,” have been the sticking points in granting these exemptions.3

It should be noted that until the early 1990s, the United States was ahead of the global curve in the field of environmental protection. On several accounts, it had more stringent, risk-adverse, and comprehensive domestic environmental regulations than any other country (Vogel 2012). Therefore, the United States included environmental exemptions in its PTAs as way of protecting US regulatory sovereignty on environmental matters (Morin and Rochette 2017). As indicated by table 2.3 below, several domestic US environmental measures have been challenged by other countries under the GATT and WTO on the grounds that they violated GATT/WTO trade rules. That the United States was most often a defendant/respondent reflects its progressive environmental regulations during this time. However, the United States did not prevail in any of these cases, largely because the dispute-settlement body found that US domestic regulations were not applied in GATT/WTO-compliant ways (Jinnah 2003).

Table 2.3

GATT/WTO Disputes Related to the Environment and Involving the United States as Respondent

Year	Plaintiff	Resp.	Facts and issues	Articles	Decision
1980	Canada	US	US prohibits tuna products from Canada to protect dolphins	XI, XX(g) of GATT	Inconsistent with Art. XI; does not comply with Art. XX
1987	Mexico, Canada, EC^a	US	US program to clean up hazardous waste included tax for imported oil	III of GATT	Inconsistent with Art. III
1991	Mexico	US	US prohibits imports of tuna from Mexico to protect dolphins	XI, XIII, III, XX of GATT	Inconsistent with Art. XI; not justified by Art. XX
1992	EC, Netherlands	US	US restricts imports of tuna to protect dolphins	XI, XIII, III, XX(b)(g) of GATT	Inconsistent with Art. XI; not justified by Art. XX
1993	EC	US	Taxes and standards on fuel economy for passenger cars	III XX(g) Of GATT	Inconsistent with III(4); not justified by XX(g)
1995	Venezuela, Brazil	US	Measures to reduce vehicle emissions of pollutants	III, XX(b)(d)(g) of GATT	Inconsistent with Art. III; not justified by XX
1997	Indonesia and others	US	US prohibits imports of shrimp unless “turtle excluder devices” are used	XI and XX(g) of GATT	Inconsistent with Art. XI; not justified by Art. XX
2009	Mexico	US	Conditions under which tuna sold in the United States may be labeled “dolphin-safe”	2 of the Agreement on Technical Barriers to Trade	Inconsistent with Art. 2.1

^a EC refers to European Communities.

The US-Israel PTA also contains a clause that clarifies the legal relationship between the PTA and other multilateral agreements, including environmental ones. It states:

The Parties affirm their respective rights and obligations with respect to each other under existing bilateral and multilateral agreements. . . . In the event of an inconsistency between provisions of this Agreement and such existing agreements, the provisions of this Agreement shall prevail. (Art. 3)

This clause makes clear that the PTA shall prevail in the event of conflict with the provisions of any MEA.

Phase Two: 1992–1998

After the US-Israel agreement, the United States didn’t enter into any additional PTAs until the early 1990s, when it signed NAFTA with Mexico and Canada. The signature of NAFTA in 1992 marked the beginning of the second phase in US trade-environment politics. This phase not only replicated the environmental exceptions contained in Article XX of the GATT, but also added a slew of new innovations, which articulated normative relationships between trade and environmental governance and established rules to guide implementation of those norms and principles. Most of these innovations have their origins with NAFTA, but have been replicated widely across US PTAs.

It is important to note that NAFTA was negotiated and signed by US President George H.W. Bush in December 1992, after Bush lost to Bill Clinton in the November 1992 US presidential election. When Clinton took office in January 1993, he refused to take NAFTA to the Senate for ratification until environmental and labor standards were negotiated. Since the agreement was already signed, Clinton pushed for the inclusion of these provisions through so-called “side agreements.” Side agreements are executive agreements that, unlike treaties, do not require US Congressional ratification, nor Senate advice and consent. Although side agreements can thus make it easier to attach environmental provisions to trade agreements, they have been criticized as weak by many environmental groups, and considered a lost opportunity by some scholarly experts (Charnovitz 1994).

NAFTA’s side agreement, called the North American Agreement on Environmental Cooperation (NAAEC), was designed to facilitate environmental cooperation between NAFTA parties and to encourage implementation of domestic environmental policies. It creates and is implemented by the Commission on Environmental Cooperation (CEC), whose primary governing body is the CEC Council. There are many environmental innovations contained in the NAAEC, several of which are a result of the broad mandate given to the CEC Council to examine a wide range of environmental issues, including transboundary pollution, invasive species, eco-labeling, and “other matters as it may decide” (Art. 10(2)). In fact, the NAFTA regime, including the NAAEC, is by far the most innovative trade agreement package ever concluded with respect to environmental protection. Figure 2.1 below builds on the TREND database and presents the most innovative trade agreements based on their number of unprecedented environmental provisions. NAFTA and NAAEC lead the ranking, with a combined number of 46 legal innovations (Morin, Pauwelyn, and Hollway 2017).

The NAAEC also contains several broad innovations that have been widely replicated, even in the absence of a similar overseeing commission under other PTAs. Most notably, the NAAEC contains provisions that allow for citizens to play a role in ensuring that their governments enforce existing environmental laws; broad public participation in environmental decision making; cooperation on environmental issues between countries; and environmental consultations to settle disputes. With the exception of the 2000 US-Vietnam agreement, which was sparse on environmental provisions, NAFTA’s environmental provisions were largely replicated, in whole or in part, in all subsequent US PTAs to date. Importantly, following NAFTA, these provisions were brought into the main text of the PTAs, in either articles or full chapters on the environment, rather than relegated to weaker side agreements.

Although the main text of NAFTA itself is relatively thin on environmental provisions, it does lay out a list of three MEAs that would prevail in the event of any inconsistency with NAFTA. These are the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the Basel Convention on the Transboundary Movement of Hazardous Wastes and their Disposal, and the Montreal Protocol on Substances that Deplete the Ozone Layer. All three of these MEAs use trade restrictions to secure their objectives, measures which, when implemented domestically, could be seen to violate PTA rules. The inclusion of these so-called “covered agreements” marks a distinct departure from the position taken in the 1985 US-Israel PTA, which implicitly articulated the opposite. Interestingly, this provision disappeared from US PTAs following NAFTA until 2006, when it reappeared in a new form in the Peru and Colombia agreements, which took a much more proactive stance on the relationship between PTAs and MEAs.

Phase Three: 1999–2001

The next political catalyst in the development of environmental provisions in US PTAs came in November 1999, when President Bill Clinton issued Executive Order (EO) 13141, which was complemented a year later by a set of implementing guidelines (Clinton 1999). The EO required, for the first time, that the US Trade Representative (USTR) and Council on Environmental Quality conduct environmental reviews of all new US trade agreements. The overarching goal of the reviews is to ensure that “environmental considerations are integrated into the development of US trade negotiating objectives and positions” (USTR and CEQ 2000, Art. IIIA(1)). To this end, the EO required that environmental reviews of environmental impacts be conducted “sufficiently early in the process to inform the development of negotiating positions” (Section 5(iii)). Although the reviews are to focus on environmental impacts in the United States, the EO indicated that “as appropriate and prudent, reviews may also examine global and transboundary impacts” (Section 5(iv)(b)). The guidelines clarified the factors that should be considered in evaluating if such a transboundary assessment is appropriate and prudent, including the scope and magnitude of any reasonably foreseeable impacts in trading-partner nations.

Importantly, and reflective of broader US environmental norms in trade agreements (see chapter 5), the EO also contained provisions for public participation in the process. These provisions were a major departure from US practice in this area, with trade negotiating positions being largely conducted behind closed doors through an interagency committee (Salzman 2001). The environmental reviews are required to meaningfully engage the public from an early stage. They begin with an invitation to the public to submit comments on the scope of the review, on the methods that should be used, and on the potential positive and negative environmental impacts of the trade agreement (USTR 2018). Importantly, the guidelines required that information collected through this process inform US negotiating objectives and positions. These new requirements opened the door for a wide swath of environmental issues and provisions to be considered in negotiating US PTAs into the future.

The first environmental review was undertaken for the US-Jordan PTA, which was also the first US PTA to contain a specific article related to the environment (Art. 5). One important development in the Jordan PTA’s environment article (Art. 5) was that it not only discouraged parties from weakening environmental laws, as we saw in the NAAEC, but also encouraged them to strengthen these laws. Simultaneously, it made clear that this provision would not infringe on parties’ sovereign rights to decide how exactly this should be done.4

Phase Four: 2002–2005

The next major development in US trade-environment politics came when the US Congress passed the Trade Act of 2002. This law renewed “fast-track” authority to then President George W. Bush, which had lapsed in 1994. Fast-track authority makes it much easier for the president to negotiate trade agreements, because it allows her/him to submit any trade deals to Congress for a vote, without the possibility of amendments or filibusters. In return, the president must follow a set of negotiation guidelines, including as related to the environment. The set of guidelines established in the Trade Act of 2002 ramped up the environmental governance provisions of EO 13141. Not only did it reinforce the EO’s requirements to conduct environmental reviews, but it also institutionalized several concrete environmental negotiating objectives. These included ensuring that US trade partners enforce environmental laws, strengthening the capacity of US trading partners to protect the environment, and promoting the consideration of MEAs.

Negotiated in tandem with the Trade Act of 2002, the Chile (2003) and Singapore (2003) PTAs reflect these strengthened environmental standards, and they would largely serve as a template for four US PTAs that were finalized before fast-track authority expired in July 2007 (Smith 2011). This included US PTAs with Australia (2004), Morocco (2004), Bahrain (2004), and Oman (2006),5 as well as the negotiations of the Central American Free Trade Agreement (2004). Notably, these PTAs expanded the US-Jordan PTA’s environment article into full scale environment chapters, which provided for various innovative environmental provisions, including enhanced cooperation, additional environmental exceptions, strengthened provisions for public participation and transparency, and stronger dispute-settlement provisions.

A particularly important innovation during this phase was the emergence of enforcement mechanisms for violation of non-derogation provisions—that is, those that require parties to enforce their domestic environmental laws. Beginning with the 2004 Chile PTA, US PTAs contain stipulations on dispute settlement, which provide for monetary penalties and possibly tariff suspensions in disputes surrounding parties’ failure to enforce environmental laws. These penalties are explicitly limited in both the amount of monetary remedy available and how the reward must be used. In addition, such penalties were only available for non-derogation, and could not be used to enforce any other PTA environmental provisions.

Phase Five: 2006–Present

On May 10, 2007, another important document, the Bipartisan Agreement on Trade Policy, was released that would shape the development of US trade policy surrounding environmental issues. This agreement, often referred to as simply the “May 10 Agreement,” was signed between the George W. Bush administration and the Democrats in Congress. It required the Bush administration to renegotiate the not-yet-ratified PTAs with Peru and Panama (and to a lesser extent Korea) to reflect a set of principles laid out in the agreement.6 In doing so, the May 10 Agreement signals the beginning of the fifth phase of US trade-environment politics. Centrally, the May 10 agreement required countries to adopt, implement, and effectively enforce laws and regulations related to a list of seven MEAs to which they are party. This went much further than the covered agreements list under NAFTA, in that these provisions weren’t about protecting from conflict, but rather required implementation and enforcement. The list also expanded NAFTA’s list of covered agreements, which included CITES and the Montreal Protocol, to now also include the International Convention for the Prevention of Pollution from Ships, the Inter-American Tropical Tuna Convention, the Ramsar Convention on Wetlands, the International Convention for the Regulation of Whaling, and the Convention on Conservation of Antarctic Marine Living Resources. Notably, the Basel Convention was removed from the list.

Although this change was important, what really differentiates this phase from the others are two additional requirements of the May 10 agreement that position PTAs to secure environmental objectives. First, it requires, for the first time, that all PTA environment obligations be subject to the same dispute settlement and enforcement mechanisms as all other FTA obligations. Unlike previous provisions for dispute settlement of environmental provisions, these are now uncircumcised in terms of remedy and apply to all environmental provisions, not just effective enforcement/non-derogation provisions. This marks an important policy shift in US trade politics. As articulated by the USTR:

We have agreed that all of our [P]TA environmental obligations will be enforced on the same basis as the commercial provisions of our agreements—same remedies, procedures, and sanctions. Previously, our environmental settlement procedures focused on the use of fines, as opposed to trade sanctions, and were limited to the obligation to effectively enforce environmental laws. (USTR 2007a)

Second, the May 10 agreement outlined highly specific provisions for inclusion of an annex on forest sector governance in the Peru PTA. These provisions included requirements to provide for capacity building in Peru, cooperation between law enforcement officials, and steps to strengthen Peru’s domestic forest governance laws and regulations. This level of specificity was a massive departure from any prior guidelines for negotiating environmental provisions in US trade agreements.

Indeed, the strengthened dispute-settlement procedures and extended list of seven “covered agreements” appeared in these renegotiated PTAs. In addition, a new innovation appeared related to biodiversity in the agreements with Peru and Colombia, and the annex on forest sector governance in the Peru agreement shattered ceilings with respect to the degree of specificity and level of prescription for domestic environmental policy change it required of Peru. Particularly in the context of the strengthened dispute-settlement provisions, these changes mark a massive strengthening of environmental governance through trade agreements.

The new biodiversity article contained in agreements with both Peru and Colombia underscores the importance of conservation and sustainable use of biodiversity in achieving sustainable development, as well as the need to respect and preserve traditional knowledge. Importantly, it also notes the importance of public participation and consultation on these issues. None of this language requires specific action, but it is significant in that it implicitly speaks to controversial issues that combine trade, environment, and intellectual property concerns such as the role of traditional knowledge and ownership of biological diversity. As discussed in chapter 4, it is further notable in that it reflects the objectives of the Convention on Biological Diversity, to which the United States is not even party.

The Peru agreement’s Annex on Forest Sector Governance provides for the most specific and prescriptive provisions in any PTA to date (US or otherwise). Rationalized by the recognition that “good forest sector governance is critical to promoting the economic value and sustainable management of forest resources” (para. 1), the annex’s eight pages are packed full of provisions that require Peru to make substantial changes to its domestic environmental policies. For example, the annex requires Peru to increase the resources it devotes to enforcement of forestry regulation, increase the weight of penalties brought against those who participate in illegal timber operations, and improve its existing monitoring programs to be more aligned with timber-relevant provisions of CITES. Importantly, all of these provisions are fully enforceable under the PTA’s dispute-settlement mechanism. (The annex provisions as related to CITES as well as public participation and effective enforcement are unpacked in more detail in chapters 4 and 5, respectively.)

US bilateral trade negotiations slowed after Trade Promotion Authority (i.e., fast-track authority) lapsed in 2007. It was not restored until 2015 under the Obama administration, with the Bipartisan Congressional Trade Priorities and Accountability Act (TPA-2015). The TPA-2015 largely replicated the environmental guidelines articulated in EO 13141, the Trade Act of 2002 (TPA-2002), and the May 10, 2007, agreement as related to, for example, environmental reviews, effective enforcement/non-derogation, promotion of MEAs, dispute settlement, and covered agreements. However, it also contained an important amendment in the Trade Facilitation and Trade Enforcement Act of 2015 (Public Law 114–125), which did two important things. First, it added new provisions related to the elimination of fisheries subsidies and addressing illegal, unreported, and unregulated (IUU) fishing (Sect. 914 para. (c)). Perhaps more importantly, for the first time in US trade policy, we see a TPA requirement to keep an environmental issue out of US trade policy as a condition of “fast-track” authority. Specifically, the amendment prohibits the president from addressing critical aspects of climate change through its trade agreements. The text reads:

ensure that trade agreements do not establish obligations for the United States regarding greenhouse gas emissions measures, including obligations that require changes to United States laws or regulations or that would affect the implementation of such laws or regulations, other than those fulfilling the other negotiating objectives in this section. (Sect 914 para. (b))

Although it doesn’t prohibit the United States from addressing all aspects of climate change through trade agreements, such as adaptation or renewable energy cooperation, this drastically circumscribes the potential of trade agreements to address what many believe is the most important environmental issue of our time.

Only one PTA, the Trans-Pacific Partnership (TPP), was agreed by the time the Obama administration left office in January 2017. Opened for signature on February 4, 2016, the TPP was agreed with 11 other countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It was never ratified by the United States, however, and President Donald Trump signed an executive order withdrawing the United States from the TPP on his first day in office on January 20, 2017. Although many expected the TPP to die out with the US withdrawal, the remaining 11 countries continued to negotiate the agreement, changing the name to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Leaders of all 11 countries met in Santiago, Chile, to sign the agreement on March 8, 2018.

Although the United States is not a party to the CPTPP and did not participate in the negotiations of that agreement, the 2018 CPTPP text is largely drawn from the 2016 TPP, which the United States did negotiate. As such, it is interesting to note the environmental provisions contained therein as a window into the US trade-environment politics. Using this case as an instructive example, chapter 5 picks up this thread to examine how US environmental norms can continue to influence trade agreements to which the United States is not even a party.

The TPP is quite progressive on environmental provisions in terms of both number of provisions and their specificity. It replicates verbatim in many cases environmental provisions contained in previous US PTAs, including as related to effective enforcement, requirements to implement MEAs such as CITES, public participation, environmental cooperation, and fully enforceable dispute settlement. The last is something that several CPTPP countries adopted for the first time in any PTA. In total, 90 percent of the TPP’s (and by extension the CPTPP’s) environmental provisions can be found in prior US trade agreements (Morin and Beaumier 2016).

It is worth noting that the CPTPP contains far-reaching and innovative provisions as compared to marine capture fisheries in any PTA to date. These provisions reflect the ongoing WTO discussions on subsidies and IUU fishing. These ongoing WTO negotiations have been fraught and characterized by deep divisions between CPTPP countries, with the United States, New Zealand, Chile, and Peru on the one hand, who have advocated for top-down bans on fish subsidies, and Japan on the other hand, who has long resisted disciplining of fish subsidies at all within the WTO, and more recently has advocated for limited bans on such subsidies only when subsidies can be linked to overfishing and overcapacity (Campling and Havice 2017). It is surprising, therefore, that these countries were able to reach agreement on these issues through regional trade negotiations. Nonetheless, some experts have characterized the final text as reflecting “minimal convergence” on these issues, suggesting the United States wasn’t able to meaningfully secure its environmental preferences in this case (Campling and Havice 2017).

On July 17, 2017, the USTR released a set of objectives to guide the renegotiation of NAFTA, including as related to environmental issues (USTR 2017a). These guidelines, and the text that was finally adopted, are very much in line with the most recently agreed US PTAs. For example, USMCA brings environmental provisions into the main text instead of solely as a side agreement, makes all environmental provisions fully enforceable under the PTA’s dispute-resolution mechanism, establishes rules to ensure effective enforcement of environmental laws, requires parties to implement MEA obligations, and strengthens mechanisms for public participation. It also incorporates several of the TPP provisions related to fishery subsidies and IUU fishing.

This signals that, despite the Trump administration’s paltry reputation on environmental politics, it does not intend to weaken environmental provisions in trade agreements. This can, at least in part, be explained by US laws (e.g., TPA-2015, under which NAFTA was renegotiated), which require many of these environmental provisions as a condition of granting fast-track authority to the president. Although President Trump could attempt to push a trade agreement through Congress in the absence of fast-track authority, it would be a very politically risky move as the agreement would be open to debate and amendment by a starkly divided Congress. Likewise, the movement to incorporate environmental provisions on fish subsides and IUU fishing, which are not required by TPA-2015, are very much in line with US negotiating positions within the WTO on these issues. The TPA-2015 issues must be included in order for Congress to approve the renegotiated agreement in the future.

As summarized in the appendix below, environmental provisions in US trade agreements have gotten stronger over time. Beginning as simple exceptions to trade obligations under specific circumstances, they have evolved into highly prescriptive and fully enforceable provisions that, in some cases, rival the reach of parallel MEAs (see chapter 4). Further, as reflected in the USMCA’s environmental provisions and Trump’s March 2018 request that Congress extend his fast-track authority, this trend will likely continue until at least 2021, when Trump’s renewed fast-track authority will be due to expire.

Conclusions

The United States is clearly a global innovator in linking trade and environmental policies. The environmental provisions in its PTAs have evolved significantly over the years. In 1985, the United States merely restated the environmental exemptions allowed under the GATT; in the 1990s, it began requiring trading partners to implement existing environmental laws and began conducting environmental reviews of all PTAs; and in the 2000s, it began requiring that specific environmental provisions be included in all PTAs, incorporated highly prescriptive forest provisions, and made all environmental provisions fully enforceable through sanction- and penalty-based dispute settlement. The latter was replicated in the more recent agreements (alongside additional innovations, including on fishing issues, plastic pollution, and wildlife trafficking), and reflects an important departure from practice in other countries.

Indeed, US innovations are quite distinct from innovations that have emerged in other countries. Notably, the US brand of trade-environment politics is quite different, and continues to diverge, from the approach taken by the European Union, for example. In addition to their diverging policies as related to dispute settlement, the European Union has been more open to demands from some Latin American countries to include provisions related to the intersection of biodiversity and intellectual property rights. The European Free Trade Association’s 2008 agreement with Colombia is the first PTA to include a section within an intellectual property rights chapter on issues related to biodiversity (Vivas-Eugui 2009). These provisions make important inroads toward aligning the intellectual property rights provisions in a PTA with the requirements of the Convention on Biological Diversity and its Nagoya Protocol, by, for example, recognizing sovereign rights over genetic resources and requiring the fulfillment of prior informed consent procedures and its application to traditional knowledge.7

Despite important US innovations in this area, there is also ample room for improvement in US trade policy surrounding the environment. For example, in some instances, environmental linkages have been pursued without adequate foresight to potential on-the-ground implications in trading-partner nations. This oversight has been linked to social unrest in at least one case, pointing to a need for more attention to the implications of templating highly prescriptive provisions from one PTA to the next, as well as providing for short implementation periods, as was the case with the US-Peru PTA.

The United States has also missed opportunities to use trade agreements to address low-hanging fruit in areas such as climate change (Morin and Jinnah 2018). Clear linkages exist between climate change and various trade issues, including border tax adjustments on carbon, emissions trading, and fossil-fuel subsidies. Although some countries, such as the European Union, have been highly innovative in including climate provisions in their agreements (Jinnah and Morgera 2013), their contribution to climate governance has been limited because they remain weakly “legalized,” fail to replicate broadly in the global trade system, and have not been adopted by the largest greenhouse gas emitters (Morin and Jinnah 2018). These linkages are minimal, however many opportunities remain both globally and in the United States in particular. Given the ambitious targets included in the 2015 Paris Agreement on climate change, this is an important area where trade policy could make a critical contribution to the public good and is therefore an area that the United States (and other countries) should move into.

Appendix: Environmental Provisions in US Preferential Trade Agreements

Distribution of Environmental Provisions in US Agreements (1985–2018)

		Preamble	Affirmation of state sovereignty						Domestic levels of protection			Enforcement of domestic measures			Public participation				Transparency					Improvement of environmental performance
Agreement^a	Year of signature	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21	22	23	24	25	26
Israel	1985
NAFTA	1992	•	•	•		•	•	•	•	•	•	•		•	•	•		•	•		•			•	•		•
Jordan	2000	•		•				•	•	•	•	•				•		•						•
Vietnam	2000
Singapore	2003	•		•					•	•	•	•	•			•	•	•		•	•			•			•
Chile	2003	•		•		•			•	•	•	•	•			•	•	•	•	•	•			•	•		•
Australia	2004	•		•	•				•	•	•	•				•			•		•			•	•
CAFTA-DR	2004	•		•	•	•		•	•	•	•	•		•	•	•	•	•	•	•	•	•	•	•	•	•	•
Morocco	2004	•		•		•			•	•	•	•			•	•	•	•		•	•			•	•		•
Bahrain	2004	•		•					•	•	•	•			•	•		•	•	•	•			•	•
Peru	2006	•	•	•		•			•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•
Colombia	2006	•	•	•		•			•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•
Oman	2006	•		•					•	•	•	•	•		•	•	•	•		•	•			•	•		•
Korea	2007	•		•		•			•	•	•	•	•		•	•	•	•	•	•	•	•	•	•	•		•
Panama	2007	•		•		•		•	•	•	•	•		•	•	•	•	•	•	•	•	•		•	•	•	•
TPP	2016	•		•		•		•	•	•	•	•	•		•	•	•	•	•	•	•	•	•	•	•	•	•
USMCA	2018	•		•		•		•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•

1. Preamble

2. Sovereignty over natural resources

3. Regulatory sovereignty

4. Sovereignty or independence of national tribunals in application of environmental measures

5. No extraterritorial enforcement activities

6. No right of action under a party’s domestic law

7. Recognition of a development gap or different capabilities

8. Inappropriate to encourage trade or investment by relaxing environmental measures

9. Strengthen levels of protection

10. Definition of environmental law

11. Enforcement of domestic measures (binding or nonbinding)

12. Cooperation on enforcement

13. Factual report on enforcement

14. Public participation in the adoption of environmental measures

15. Public participation in the implementation of the agreement

16. Direct contact between non-state actors of both parties

17. Education and public awareness

18. Publication of environmental laws

19. Communication with public on actions taken under the agreement

20. Communicate decisions of joint institutions

21. Make available communications received from the public

22. Public sessions of joint institutions

23. Promotion of voluntary measures

24. Promotion of economic instruments

25. Encourage production of environmental goods or services

26. Encourage trade in environmental goods or services

		Implementation of the agreement					Cooperation								Technical assistance					Coherence with non-environmental issues
Agreement	Year of signature	27	28	29	30	31	32	33	34	35	36	37	38	39	40	41	42	43	44	45	46	47	48	49	50	51	52	53	54
Israel	1985
NAFTA	1992	•	•				•	•	•	•	•	•		•	•				•		•
Jordan	2000					•		•			•			•	•		•	•
Vietnam	2000
Singapore	2003			•		•	•		•				•	•	•		•			•	•
Chile	2003			•	•		•	•	•	•			•	•	•	•				•	•	•	•		•		•
Australia	2004					•	•	•	•	•			•	•	•						•	•				•	•
CAFTA-DR	2004			•	•		•	•	•	•			•	•	•	•	•	•		•	•							•
Morocco	2004			•		•	•	•	•	•			•	•	•						•
Bahrain	2004			•			•	•	•	•			•	•	•						•								•
Peru	2006			•		•	•	•	•		•		•	•	•	•	•				•	•						•
Colombia	2006			•			•	•	•				•	•	•	•	•				•	•						•
Oman	2006			•		•	•	•	•	•			•	•	•						•			•
Korea	2007				•	•	•	•	•	•	•	•	•	•	•				•	•	•	•			•				•
Panama	2007			•	•		•	•	•	•			•	•	•	•	•	•		•	•				•
TPP	2016			•			•	•	•	•	•	•	•	•	•		•		•		•	•	•		•	•		•	•
USMCA	2018		•				•	•	•	•	•	•	•	•	•	•				•	•	•			•	•	•	•	•

27. Individual monitoring of the environment

28. Individual environmental assessment

29. Funding of cooperation activities

30. Each party must fund its own implementation of the agreement

31. Environmental impact assessment of the agreement

32. Joint scientific research

33. Joint environment assessments and studies

34. Exchange of information

35. Communication when taking environmental protection measures

36. Communication between customs authorities

37. Harmonization of environmental measures

38. Cooperation in negotiation of future agreements

39. Vague commitment to cooperate

40. Technical assistance to a party

41. Technical assistance to non-state actors

42. Technology transfer

43. Funding of technical assistance

44. Emergency assistance in case of natural disaster

45. Mutual supportiveness between environment, trade, and development

46. Coherence with domestic trade or investment policies

47. Interaction with energy policies

48. Interaction with mining policies

49. Interaction with tourism policies

50. Interaction with social policies

51. Interaction with urban development policies

52. Interaction with agriculture policies

53. Interaction with traditional knowledge policies

54. Interaction with human health policies

		Specific environmental issues
Agreement	Year of signature	55	56	57	58	59	60	61	62	63	64	65	66	67	68	69	70	71	72	73	74	75	76	77	78	79	80	81
Israel	1985
NAFTA	1992		•				•				•			•			•	•					•	•		•	•	•
Jordan	2000	•				•	•										•										•
Vietnam	2000
Singapore	2003										•								•	•
Chile	2003										•						•	•				•						•
Australia	2004	•	•					•	•	•	•	•	•	•			•	•	•	•	•	•		•			•	•
CAFTA-DR	2004										•		•		•	•	•	•									•
Morocco	2004			•			•		•								•									•
Bahrain	2004		•	•			•		•		•					•							•
Peru	2006									•	•			•		•		•	•				•					•
Colombia	2006													•				•	•				•				•	•
Oman	2006		•		•	•			•		•		•												•	•	•	•
Korea	2007		•	•			•	•			•			•			•	•	•	•			•	•		•	•	•
Panama	2007										•		•		•	•	•
TPP	2016		•				•	•	•	•	•	•	•	•	•	•	•	•	•	•			•	•		•	•	•
USMCA	2018		•	•			•	•	•	•	•	•		•	•	•	•	•	•	•		•	•	•	•	•	•	•

55. Coral reefs

56. Seas and oceans

57. Coastal areas

58. Aquifers, ground water

59. Water efficiency

60. Water pollution and other water issues

61. Wetlands

62. Fisheries

63. Forests

64. Endangered species and their illegal trade

65. Whales and seals

66. Migratory species

67. Invasive species

68. Shared species

69. Genetic resources

70. Protected areas

71. Biodiversity (general)

72. Renewable energy

73. Energy efficiency

74. Climate change

75. Ozone layer

76. Air pollution

77. Vehicle emission standards

78. Oil spills

79. Other natural disasters

80. Hazardous waste

81. Pesticides and chemicals

		Limits to environmental measures	Environmental exceptions														Dispute settlement
Agreement	Year of signature	82	83	84	85	86	87	88	89	90	91	92	93	94	95	96	97	98	99	100	101	102	103	104	105	106
Israel	1985		•	•
NAFTA	1992		•	•	•			•	•	•	•	•		•	•		•	•	•	•	•	•	•	•	•	•
Jordan	2000		•	•	•									•
Vietnam	2000		•	•	•			•			•			•
Singapore	2003		•	•	•					•	•		•	•	•		•		•		•	•	•	•
Chile	2003	•	•	•	•			•	•	•	•		•	•	•		•			•	•	•	•	•
Australia	2004		•	•	•			•	•	•	•		•	•	•		•		•	•	•	•	•	•
CAFTA-DR	2004		•	•	•			•	•	•	•		•	•	•		•	•	•	•	•	•	•	•
Morocco	2004		•	•	•			•	•	•	•		•	•	•		•		•	•	•	•	•	•
Bahrain	2004		•	•	•			•	•					•	•		•		•	•		•	•	•	•
Peru	2006		•	•	•			•	•	•	•		•	•	•		•	•	•	•	•	•		•	•	•
Colombia	2006		•	•	•	•	•	•	•	•	•		•	•	•		•	•	•	•	•			•	•	•
Oman	2006		•	•	•		•	•	•	•	•		•	•	•		•		•	•	•	•	•	•
Korea	2007	•	•	•	•			•	•	•	•	•	•	•	•		•		•	•	•	•		•	•	•
Panama	2007		•	•	•			•	•	•	•		•	•	•		•	•	•	•	•			•	•	•
TPP	2016	•	•	•	•			•	•	•	•		•	•	•	•	•	•		•	•	•		•	•	•
USMCA	2018	•	•	•	•			•	•	•	•	•	•	•	•	•	•	•	•	•	•			•	•	•

82. Environmental measures not to be used for protectionist purposes

83. Trade in goods: necessary to protect animal, human or plant life or health

84. Trade in goods: conservation of natural resources

85. Trade in services: measures to protect animal, human, or plant life or health

86. Trade in services: conservation of natural resources

87. Trade in services: environmental protection

88. Technical Barriers to Trade (TBT): all exceptions for environmental purposes

89. Sanitary and Phytosanitary (SPS): all exceptions for environmental purposes

90. Investment: general exception

91. Investment: specific on establishment

92. Investment: specific on performance requirements

93. Investment: specific on expropriation

94. Intellectual property: all exceptions for environmental purposes

95. Procurement: all exceptions for environmental purposes

96. Subsidies: all exception for environmental purposes

97. Private access to remedies, procedural guarantees, and appropriate sanctions

98. Commitment to consider alleged violation brought by citizen of a party

99. Commitment to consider alleged violation brought by foreigner

100. Environmental experts as panelists

101. Environmental experts to be consulted by panel

102. Failure to enforce domestic laws: non-jurisdictional mechanism

103. Failure to enforce domestic laws: suspension of benefits

104. Non-compliance with environmental provisions: non-jurisdictional mechanism

105. Non-compliance with environmental provisions: general dispute-settlement mechanism (DSM) procedures applicable

106. Non-compliance with environmental provisions: suspension of benefits

		Joint institutions			Relationship with environmental agreements
Agreement	Year of signature	107	108	109	110	111	112	113	114	115	116	117	118	119	120	121	122	123	124	125	126	127	128	129	130
Israel	1985																						•
NAFTA	1992	•	•	•					•		•			•							•	•	•	•	•
Jordan	2000		•
Vietnam	2000
Singapore	2003	•	•		•																		•		•
Chile	2003	•	•		•					•													•		•
Australia	2004		•																				•		•
CAFTA-DR	2004	•	•	•	•																		•	•	•
Morocco	2004	•	•																				•	•	•
Bahrain	2004	•	•																				•		•
Peru	2006	•	•		•	•		•	•	•	•	•	•		•	•	•	•	•	•			•	•	•
Colombia	2006	•	•		•	•		•	•	•	•	•	•		•	•	•	•	•	•			•	•	•
Oman	2006	•	•		•																		•		•
Korea	2007	•	•		•	•		•	•	•	•	•			•		•		•				•	•	•
Panama	2007	•	•			•		•	•	•	•	•	•		•	•	•	•	•	•			•	•	•
TPP	2016	•	•		•	•	•	•		•		•											•		•
USMCA	2018	•	•		•	•	•	•		•		•											•		•