The Protection of Environmental Law Under NAFTA and CUSMA: A Canadian Perspective.

• Author: Moshenski-Dubov, George
• Position: Free Trade Agreement, 2020, United States-Canada-Mexico

TABLE OF CONTENTS I. INTRODUCTION II. NAFTA HISTORY A. North American Agreement on Environmental Cooperation 1. Objectives 2. Obligations 3. Commission for Environmental Cooperation 4. Cooperation and Provision of Information 5. Consultation and Resolution of Disputes 6. General Provisions and 7. Final Provisions III. NAFTA EFFECTS ON ENVIRONMENT Pollution Air Water Land Destructive Practices Chapter 11 IV. CUSMA VS NAFTA CUSMA Summary Changes Chapter 14 Chapter 24 V. CUSMA OUTLOOK VI. CONCLUSION I. INTRODUCTION

On July 1, 2020, the Canada-United States-Mexico Agreement (hereinafter "CUSMA") (1) came into effect, replacing the existing North American Free Trade Agreement (hereinafter "NAFTA"). (2) Just like its predecessor NAFTA, CUSMA is a trilateral trade deal that eliminates and reduces most barriers to trade and investment between the three largest North American countries. Largely, this permits for the more efficient, expedient, and cheaper movement of goods and services between Canada, the United States, and Mexico (hereinafter "the Parties"). While CUSMA has been in effect since July 1, 2020, NAFTA had been in operation for 26 years, from January 1, 1994. At the time of NAFTA's formation, it was a pioneer for large-scale free trade agreements, creating one of the world's largest trade blocs in the world. While the main motivations behind both trade deals have been for economic and commercial purposes, the environment has also been a topic of concern before the signing of NAFTA and during the renegotiation of CUSMA. Most notably, the United States Trade Representative has referred to provisions in CUSMA as "the most advanced, most comprehensive, highest-standard chapter on the Environment of any trade agreement." (3) Thus, this begs the question, how have free trade agreements in North America, such as NAFTA and CUSMA, affected the environment? Given the multinational reach of these agreements, this research will be analyzed through a Canadian lens. This question is imperative given the importance of swift national-level environmental action to limit the effects of climate change.

This paper will begin by providing a history of NAFTA and its environmental provisions and developments. The effects of these provisions will then be examined to demonstrate the environmental outcomes of NAFTA. Third, a comparative analysis will be undertaken looking at the similarities and differences in environmental provisions between NAFTA and CUSMA. This paper will conclude by providing an outlook of the future environmental effects of CUSMA.

2. NAFTA HISTORY

   NAFTA as we know it started with a bilateral agreement between Canada and the United States. On October 4, 1987, the countries signed the Canada-United States Free Trade Agreement (the "CUSFTA") which came into effect in 1989. (4) Shortly thereafter, in the early 1990s, Mexican President Carlos Salinas de Gortari approached the United States and President George H. W. Bush in the hopes of creating a similar bilateral agreement between the two countries. Despite having limited interest in creating a trade deal with Mexico, Prime Minister Brian Mulroney joined the negotiations between President Bush and President Salinas. From Canada's perspective, the creation of a trilateral agreement after the signing of CUSFTA was a defensive tactic to limit the outcomes of sharing the country's preferential access to the United States with Mexico. In other words, if Mexico and the United States had agreed to a comparable bilateral trade agreement to CUSFTA, then it was believed that Canada would lose many of the benefits it had gained from its original agreement. As such, joining the discussions would allow Canada to voice its concerns and desires. After 14 months of negotiations, the agreement was signed by all three countries in 1992. (5)

   When President Bill Clinton was elected in 1993, he endorsed NAFTA, but demanded the inclusion of two new accords to enforce labor and environmental laws. (6) The environmental accord, named the North American Agreement on Environmental Cooperation (the "NAAEC"), was a seven-part treaty that was signed by all three members on September 14, 1993, and came into force with NAFTA on January 1, 1994. (7)

   1. North American Agreement on Environmental Cooperation

   While the NAAEC is a separate side-treaty, its ratification by the Parties is a direct result of NAFTA. As the NAAEC is divided into seven parts spanning 51 articles, it is most effective to examine each part individually.

   1. Objectives

      Part One, Objectives, is one of the shortest sections of the NAAEC. However, it does importantly outline the goals of the treaty. The primary objectives of the NAAEC are to "foster the protection and improvement of the environment in the territories of the Parties for the well-being of present and future generations" and "promote sustainable development based on cooperation and mutually supportive environmental and economic policies." (8)

   2. Obligations

      Part Two builds off the previous section and sets out the obligations and requirements for the Parties. These obligations include individual and collaborative approaches to protecting the environment. For the latter, Part Two of the NAAEC recommends the Parties work together to stop the exportation of pesticides or toxic substances if one of the members adopts a measure restricting its use. Part Two also addresses the responsibility of each individual Party member, such as Article 5, which outlines that "With the aim of achieving high levels of environmental protection and compliance with its environmental laws and regulations, each Party shall effectively enforce its environmental laws and regulations through appropriate governmental action ..." (9)

   3. Commission for Environmental Cooperation

      Part Three of the NAAEC establishes the Commission for Environmental Cooperation ("the Commission") as well as its Council, Secretariat, and Advisory Committees. For this research question, it is sufficient to acknowledge this formation, as well as the Council's ability to develop recommendations regarding pollution, sustainable development, protection of animals and ecosystems, and data analysis. However, as with much of International Law, the Commission lacks the authoritative power to unilaterally make changes, resulting in recommendations and reports to the Parties as its sole influence. (10)

   4. Cooperation and Provision of Information

      Part Four outlines the agreement between the Parties to cooperate and share relevant information. This cooperation includes sharing information relating to violations of environmental law or a Party's internal measures that may affect the agreement. However, this is not a mandatory requirement, as a Party may choose to forego cooperation or sharing of information if they provide the Commission with reasoning. (11)

   5. Consultation and Resolution of Disputes

      Consultation and Resolution of Disputes is the longest section of the NAAEC. The purpose of Part Five is to allow the Parties to bring complaints against the other NAAEC members for failing to effectively enforce environmental provisions and laws. Important to note, the complaint must be related to environmental law associated with the trade of goods subject to NAFTA. Article 24 grants the Council the right to convene an arbitral panel to consider the matter. If it has been determined that the Party has demonstrated a persistent pattern of failure to abide by environmental law, the panel may propose a plan for the Party to remedy the non-enforcement and may impose a monetary enforcement assessment. According to proponents of the NAAEC, the penalties under Part Five "would be primarily symbolic". (12) Penalties could not be in an amount higher than $20 million USD and would be paid to the Commission to "improve the environment or environmental law enforcement" in the offending country. (13)

   6. General Provisions and 7. Final Provisions

      Part Six and Seven of the NAAEC outline general and final provisions such as definitions, funding requirements, and privileges. For the purposes of this paper, these sections do not need further explanation.

      In summary, the NAAEC came into force as public concern over the negative effects of NAFTA led to former President Bill Clinton dedicating a side accord. According to Stephen P. Mumme of the Institute for Policy Studies, "Environmental concerns were afterthoughts to NAFTA, forced on the governments by environmental and labor groups." (14) While the NAAEC was...