The Issue

The trade and environment debate revolves around two distinct but related issues. First, is the impact of trade agreements, such as the Global Agreement on Tariffs and Trade (GATT) or the North American Free Trade Agreement (NAFTA), on both national environmental laws and on international environmental agreements. The second issue is the direct impact of increased trade and trade agreements on the environment, whether it be via the conversion of open space to agricultural or industrial uses, an increase in industrial production leading to an increase in pollution, or the exploitation of natural resources such as timber or minerals in an effort to compete in the global economy.

Trade Agreements

When a country enters into a trade agreement, such as GATT, it agrees to drop tariffs and to treat similar products from other signatory countries equally. The country also agrees not to block free movement of goods between countries. In recent years, several U.S. environmental laws have come under fire by GATT and the World Trade Organization (WTO) as disguised barriers to trade. The first, and most famous case, involved a U.S. ban on imports of tuna caught with drift nets ó a practice that has been shown to kill substantial numbers of dolphins. In the early 1990s, a GATT trade panel declared this ban an impermissible trade barrier. A more recent case involved a U.S. ban on imports of shrimp caught in nets without devices to allow endangered sea turtles to escape drowning. A WTO panel, operating behind closed doors, found that this also was a disguised barrier to trade and the U.S. was forced to abandon enforcement of the ban. These decisions outraged U.S. environmental groups, and a WTO decision that a European Union ban on imports of U.S. beef treated with growth hormones was an illegal trade barrier has galvanized activists in Europe as well.

Environmental organizations are concerned about the potential conflict between trade agreements and multilateral environmental agreements. For example, the Convention on International Trade in Endangered Species (CITES) places restrictions on trade in endangered animals and plants and on products made from them. Environmentalists see potential for conflict between an environmental agreement that directly restricts trade ó or that contemplates the use of trade sanctions as an enforcement mechanism, such as the Montreal Protocol on Ozone-Depleting Substances ó and the open market goals of GATT.

The North American Free Trade Agreement (NAFTA)

The debate over trade and environment began to reach prominence during the negotiation of NAFTA in 1992 and 1993. Environmentalists were concerned that a trade agreement with Mexico, a developing economy, would lead to further environmental degradation along the border. In addition, the tuna/dolphin decision had led to concerns about the dispute resolution process and its potential impact on domestic environmental laws. As a result of this concern, and strong lobbying by U.S. and Canadian environmental groups, NAFTA countries negotiated an environmental side agreement that included a dispute resolution process to deal with allegations that a country was failing to enforce its environmental laws. Mexico also passed, and pledged to enforce, additional environmental protection laws prior to completing the negotiation of NAFTA. In addition, the U.S. Trade Representative agreed to conduct an environmental review of the NAFTA agreement. Because of these developments, a number of U.S. environmental organizations elected to support NAFTA, and lobbied for its passage in Congress.

"Fast Track" Trade Authority

A year after the passage of NAFTA, Congress passed legislation ratifying the Uruguay Round of GATT - the agreement that created a new trade oversight body in the WTO. Since that time, there have been few new developments in the international trading regime. Efforts to expand the NAFTA agreement to include other partners, to build a new Free Trade Area of the Americas in the Western Hemisphere, and to launch a new round of GATT negotiations have stalled, in part because the U.S. President lacks what is known as "Fast Track" authority. Under Fast Track rules, if the President agrees to consult with key congressional leaders while negotiating trade agreements and complies with a list of pre-set restrictions and goals, Congress would agree to vote on the resulting agreements without opportunity for amendment. Without Fast Track authority, the President is free to negotiate, but Congress is then free to demand changes to completed trade agreements. Thus as a practical matter, without Fast Track the President's ability to negotiate new trade agreements is severely limited.

The Debate Continues

Two recent events illustrate the continuing debate over both the environmental impacts of trade and the impact of trade agreements on environmental protection laws. First, in November 1999 the President signed an Executive Order, requiring an environmental assessment of all new trade agreements, similar to that done for the NAFTA agreement in 1993. Under the order, a team of experts from government and the private sector will evaluate the impacts of a trade deal on air, land, water and wildlife.

Last year's World Trade Organization meeting in Seattle, intended to inaugurate a new round of trade talks, also illustrates the continuing conflict over trade and environment and over the WTO's "closed-door" culture. The WTO has proven to be highly resistant to efforts to consider environmental concerns in resolving disputes among member nations, as illustrated by the shrimp/turtle decision and the more recent beef hormone dispute. The fact that these decisions are made by trade officials in Geneva, out of the public eye and with little information released to the public, has led to strong criticism of the WTO from environmental groups, labor unions and concerned citizens. Members of these groups took to the streets of Seattle to call attention to what they believe is an international trading regime that lacks public accountability, but is endowed with the power to make decisions that impact national laws designed to protect the health and welfare of ordinary citizens and the environment.