NAFTA EFFECTS POTENTIAL NAFTA E FFECTS CLAIMS AND … · vi Potential NAFTA Environmental Effects: Claims and Arguments — 96/04 A N O R T H A M E R I C A N A P P R O A C H T O E

NAFTA EFFECTS

POTENTIAL NAFTA EFFECTS:CLAIMS AND ARGUMENTS

1991-1994

2

The Commission for Environmental Cooperation’s Environment and TradeSeries is designed to deepen our understanding of environment and trade linkages in the context of North American trade liberalization.

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No. 2 N A F TA Effects — Potential NAFTA Environmental Effects: Claims and Arguments, 1991-1994

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vPotential NAFTA Environmental Effects: Claims and Arguments — 96/04

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vi Potential NAFTA Environmental Effects: Claims and Arguments — 96/04

A N O R T H A M E R I C A N A P P R O A C H T OE N V I R O N M E N TA L C O N C E R N S

Three nations working together to protect the environment

The Commission for Environmental Cooperation (CEC) was established byCanada, Mexico and the United States in 1994 to address transboundaryenvironmental concerns in North America. While the idea to create such a commission originated during the negotiations of the North American FreeTrade Agreement (NAFTA), it derives its formal mandate from the NorthAmerican Agreement on Environmental Cooperation (NAAEC).

The NAAEC builds upon and complements the environmental provisions established in NAFTA. It creates a North American framework whereby goals related to trade and the environment can be pursued in an openand cooperative way.

In broad terms, the NAAEC sets out to protect, conserve and improve theenvironment for present and future generations. How? The parties to theAgreement set out the following objectives:

• to protect the environment through increased cooperation;

• to promote sustainable development based on mutually supportive environmental and economic policies;

• to support the environmental goals of NAFTA and avoid creating trade distortions or new trade barriers;

• to strengthen cooperation on the development of environmental lawsand enhance their enforcement; and to promote transparency and public participation.

In signing the NAAEC, the governments of Canada, Mexico and the UnitedStates committed themselves to a core set of actions, including:

• reporting on the state of the environment;

• striving for improvement of environmental laws and regulations;

• effective enforcement of environmental law; and

• publication and promotion of information.

Commission for Environmental Cooperation

The CEC facilitates cooperation and public

participation to foster conservation, protection and

enhancement of the North American environment for

the benefit of present and future generations, in the

context of increasing economic, trade and social links

between Canada, Mexico and the United States.

Mission Statement

viiPotential NAFTA Environmental Effects: Claims and Arguments — 96/04

ixPotential NAFTA Environmental Effects: Claims and Arguments — 96/04

This report is one of a series of analyses prepared by the Commission forEnvironmental Cooperation (CEC) as a background contribution to thepreliminary phase of the NAFTA Effects Project. The goal of this phase of theproject is to set up a framework to assess the effects of the North American FreeTrade Agreement (NAFTA) on the environment in North America. TheNAFTA Effects project responds directly to Article 10(2)(l) of the NorthAmerican Agreement on Environmental Cooperation regarding matters as theyrelate to economic development, as well as Article 10(6) regarding cooperationwith the NAFTA Free Trade Commission to achieve the environmental goalsand objectives of the NAFTA and to assess its environmental effects.

The objective of this study is to identify the major claims and arguments made bygovernments, academics, non-governmental organizations (NGOs) and others inCanada, the U.S. and Mexico suggesting that there are potential direct andindirect environmental effects of the NAFTA. It also outlines some of thepotential indirect environmental impacts of both economic and social changepredicted to result from the NAFTA.

In 1995, the CEC began the exploratory Phase I of the project. It has focussed onthe core elements of the NAFTA along with its more general regime, as well asits direct and immediate effects on trade and investment flows within NorthAmerica. The CEC is preparing an analysis of trade and investment activity inthe period immediately preceding the NAFTA, including the period fromJanuary 1, 1994 to the present. The physical environmental changes flowingfrom NAFTA-induced economic activity will be considered in this analysis.

Research for the NAFTA Effects project is being carried out by a trilateral teamof experts. An advisory body comprised of 15 senior representatives from relevantbusiness sectors and environmental communities in Canada, the U.S. andMexico is overseeing the research.

This background paper was prepared as part of the research process for theproject. Mark Spalding and Marc Stern are responsible for the body of the report;Jeffrey Stoub and Jane Barr assisted the Project Manager in preparing it forpublication.

Sarah RichardsonProgram Manager, NAFTA/EnvironmentMontrealNovember 29, 1995

Introduction and Acknowledgements

x Potential NAFTA Environmental Effects: Claims and Arguments — 96/04

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INDEX OF CLAIMS AND ARGUMENTS ABOUT POTENTIAL NAFTAENVIRONMENTAL EFFECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1. Macroeconomic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

a. Industrial Migration to Mexico due to Lower Environmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

b. Greater Resources for Enforcement in Mexico due to Economic Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

c. Unfair Competitive Advantage to Mexico-Based Industry due to Lower Environmental Standards. . . . . . . . . . . . . . . . . . . . . . . . . . 10

d. Avoidance of Environmental Laws by Private Firms due to Competitive Pressures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

e. Greater Environmental Problems in the Interior of Mexico due to Economic Growth from NAFTA . . . . . . . . . . . . . . . . . . . . . . . 11

2. Legal Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

a. Potential for Challenges to Federal and Sub-federal Environmental Standards under NAFTA Provisions . . . . . . . . . . 13

b. Downward Pressure on Environmental Statutes in all Three Countries to attract Investment . . . . . . . . . . . . . . . . . . . . . . . . . . 17

3. Border Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

a. Increased Air Pollution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19b. Increased Water Pollution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20c. Increased Demand on Scarce Water Resources. . . . . . . . . . . . . . . 21d. Increased Solid Waste Disposal Problems . . . . . . . . . . . . . . . . . . . 22e. Increased Illegal Dumping of Toxic Chemicals and Hazardous

Wastes in Mexico due to Industrial Growth and the Absence of Satisfactory Disposal Methods . . . . . . . . . . . . . . . . . . . . . . . . . 22

f. Increased Potential for Chemical Emergencies. . . . . . . . . . . . . . . 23g. Greater Pressures on Wildlife and Endangered Species. . . . . . . . . 24h. Dispersion of Industrial Development away from the Border . . . . 25

Contents

xiPotential NAFTA Environmental Effects: Claims and Arguments — 96/04

4. Public Health Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

a. Accelerated Industrialization at the Border will Intensify Existing Public Health Problems in the Region . . . . . . . . . . . . . . 26

b. Introduction of Tainted Food Stuffs to the US and Canada due to Lower Sanitary and Phytosanitary Standards in Mexico . . . . . . 26

5. Sectoral Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

a. Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27i) Reduction in Air Pollution in Mexico due to Greater Use

of Natural Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27ii) Increased Damage to Natural Resources in Mexico due to

Expansion of the Petrochemical Sector . . . . . . . . . . . . . . . . . 28iii) Lower Incentives for Energy Conservation in the US due to

More Secure Access to Mexican Oil Reserves and Canadian Hydroelectric Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

iv) Damage to Natural Resources from Accelerated Development of Hydroelectric Power . . . . . . . . . . . . . . . . . . 30

b. Agriculture: Reduced Subsidies Will Lower Environmental Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

c. Environmental Technologies: Increased Exports to Mexico . . . . . 31

6. Natural Resource Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

a. Acceleration of Fishery Exploitation in Mexico due to Competitive Pressures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

b. Acceleration of Forest Exploitation in Mexico and Canada due to Increased Foreign Investment and Competitive Pressures. . . . . 33

c. Acceleration of Mining Development in Mexico due to Increased Foreign Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

ANNEX A — CHART OF CLAIMS ABOUT POTENTIALENVIRONMENTAL EFFECTS OF NAFTA . . . . . . . . . . . . . . . . . . . . . 51

Between 1991 and 1994 a wide-ranging set of debates took placeregarding the economic, social, andenvironmental consequences of tradeliberalization among Canada, Mexicoand the United States. Speculation,predictions, assertions and argumentsabout the possible effects of theNAFTA were made by observers froma wide variety of backgrounds, interestsand associations. Some predictionsfocussed on what might happen to theenvironment if the NAFTA wereadopted and if trade increased aspredicted. Others concentrated onexisting negative environmental con-ditions and suggested that the NAFTAeither will do nothing to improvethem, or will in fact aggravate them.The items cited in this backgroundpaper were gleaned from many sources,including government documents,scholarly journals, newspapers,conference reports and NGO positionpapers, among others. The researchersconducted an exhaustive collection ofmaterial from all sectors involved inthe debate over the environmentaleffects of the NAFTA. Through theobjective collection of documents,they attempted to gather materials thatwould provide an accurate reflection ofthe claims being made during theNAFTA debate.

This background paper surveys theclaims in order to assist in thedevelopment of a framework for use inassessing the actual effects of theNAFTA on the environment. As such,the report does not coverenvironmental laws and institutionsrelated to dispute settlement pro-cedures, transparency and communityright-to-know issues. Nor does it coverother procedural or policy mattersrelated to the creation andimplementation of the three NAFTA

environmental institutions: the Border Environment CooperationCommission (BECC), the NorthAmerican Development Bank(NADBank), and the Commission forEnvironmental Cooperation (CEC). Itshould also be noted that this surveymerely sets forth the material in anorganized fashion in order to documentthe claims that were being made. In noway does it attempt to analyze, judge orinterpret their contents.

This background paper is divided intosix major areas: Macroeconomic Issues,Legal/Compliance Issues, BorderIssues, Public Health Issues, SectoralIssues, and Natural Resource Issues.These major themes are each dividedinto relevant sub-issues, where thenature of the predictions and theanswers they elicited are shown bylisting the claims, counter-claims andinstitutional responses made as a result of the debate. Section 1,Macroeconomic Issues, addresses fivesub-issues. The predictions that lowerenvironmental standards andperceived lax regulations in Mexicowould lead to increased industrialmigration are listed in the first sub-section, and are particularly strong andnumerous. Counter-claims include thepositions that there is little empiricalevidence that industries relocate totake advantage of lower environmentalstandards, and that other factors aremore important determinants ofrelocation. The next sub-section showsanother side of the debate: someobservers predict that, given theeconomic growth expected as a resultof the NAFTA, there should beadditional resources with whichMexico can address its environmentalconcerns. Another sub-section lists thepredictions of greater environmentalproblems in Mexico’s interior due to

Introduction

1Introduction

economic growth as a result of theNAFTA.

Legal/Compliance Issues, Section 2,tends to subsume all other issue areasbecause many predictions assumed thatenvironmental harm, if any, would bethe result of challenges to federal andsub-federal environmental standardsdue to trade disputes. Considerableconcern is expressed over thepossibility that state, provincial, andmunicipal environmental protectionlaws could be challenged as tradebarriers under the NAFTA and arethus incompatible with internationaltrade rules. Counter-claims andinstitutional responses focus on thelegitimacy and integrity of domesticenvironmental laws. This section alsoincludes claims that Americanenvironmental standards could be thesubject of rollback pressure to maintaincompetitiveness.

The theme of the third section isBorder Issues. This area was frequentlythe subject of predictions because of its importance as the focus of theintersection of trade between the US and Mexico. Issues include thethreats of increased air pollution, waterpollution, demand on scarce waterresources, solid waste disposal prob-lems, illegal hazardous waste dumping,potential for chemical emergencies,and pressures on wildlife. Predictionsregarding the dispersion of industrialdevelopment away from the border arealso included here.

Section 4 examines Public HealthIssues. These include the heightenedpossibility of the spread of infectiousdiseases due to increased migration tothe border, and the introduction of

tainted food to Canada and the USbecause of lower sanitary and phyto-sanitary standards in Mexico. Theseissues, however, were not the cause of asignificant amount of debate regardingthe potential effects of the NAFTA.

On the other hand, Sectoral Issues,Section 5, were the subject of manypredictions, primarily because sustain-able energy policies were omitted fromthe NAFTA. The following issues arecovered in this section: the reductionin air pollution in Mexico due togreater use of natural gas, increaseddamage to natural resources in Mexicodue to expansion of the petrochemicals e c t o r, lower incentives for energyconservation in the US due to moresecure access to Mexican oil reservesand Canadian hydroelectric power,damage to natural resources fromaccelerated development of hydro-electric power, reduced subsidies to theagricultural sector that could lowerenvironmental impacts, and theincreased export of environmentaltechnologies to Mexico.

Finally, Section 6 details the debatesurrounding Natural Resource Issues,which was the subject of severalpredictions. These included the claimthat the NAFTA will accelerate fisheryexploitation in Mexico due tocompetitive pressures, that it willheighten Mexican and Canadian forestexploitation due to increased foreigninvestment and competition, and thatmining development in Mexico willincrease because of greater foreignfinancing and investment.

A large percentage of the sources ofenvironmental predictions are fromthe US, a smaller number are

2 Potential NAFTA Environmental Effects: Claims and Arguments — 96/04

Canadian sources, and comparativelyfew are Mexican. One importantreason for this focus is that because ofthe already existing US-Canada FreeTrade Agreement (FTA), and becauseCanada and Mexico are separated bythe United States, fewer environ-mental concerns were raised in Canadaabout the extension of the free tradearea to include Mexico.

In the Index that follows, each claim,c o u n t e r-claim and institutional re-sponse includes a short heading thatcontains a date, context and source.

The sources are identified by theiracronyms, which are defined in theacronym list at the end of the study.The headings were used to compile areference chart, found in Annex A,which allows the reader to evaluate thedegree of support for each claim andcounter-claim and to note institutionalresponses. Each claim, counter-claimand institutional response includes acitation at the end of each entry,enabling cross-reference to thebibliography for further research.

3Introduction

9/3/91 Statement to the USTRNRDC

Increased investment from NAFTAcould compound environmentalproblems. (NRDC, 1991:4)

6/1/92 Wall Street JournalCIM

“But why, then as opposition to NAFTAhas begun to stem more from USconcerns for jobs in light of an anemiceconomic recovery, hasn’t Mexico’sresolve on the environmental frontfallen off? In fact, we may be seeing theemergence of a trend in which there is adirect correlation between environ-mental protection and renewedeconomic growth in both the US andMexico.” (Goebel, 1992)

7/1/93 El FinancieroGM

“The three governments are guilty ofhaving created a trade agreement madeespecially to meet the interests ofmultinationals without giving seriousand responsible consideration to thenegative repercussions of the agreementon ecosystems and natural resources.” (López, 1993:16)

7/8/93 Wall Street JournalSC

NAFTA will bring economic benefits byincreasing industrialization and thatbrings pollution along with it.(McCloskey, 1993:A13)

a. Industrial Migration to Mexico due to Lower Environmental Regulation

Claims

3/13/91 National Journal“Environmentalists”

Heavily polluting industries such as steelmaking and chemical production willexpand rapidly in Mexico, takingadvantage of low environmentalregulation. (Stokes, 1991:864)

8/12/91 Position PaperCNI

“Powerful incentives to move southoften are created by the difference inenvironmental compliance costsbetween Mexico and the US.”(Christensen and Leonard, 1991:6)

10/16/91 House TestimonyFOE

“Trade agreement may stimulate theflight of polluting industries to countrieswith weak environmental regulatoryregimes.” (Hearings before theSubcommittee on Rules of the House,1991)

9/24/92 Wall Street JournalPC

The NAFTA has been designed tocreate a low wage, weak environmentalregulatory enforcement haven formanufacturing. (Gutfeld, 1992:R9)

Index of Claims and Arguments aboutPotential NAFTA Environmental Effects

5Index of Claims and Arguments about Potential NAFTA Environmental Effects

1 . M A C R O E C O N O M I C I S S U E S

9/24/92 Wall Street Journalnot attributed

The NAFTA “will encourage companiesto move to Mexico to take advantage ofweaker enforcement there, and thenexport products back to the US.”(Gutfeld, 1992:R9)

10/14/92 Plaintiffs’ Brief, PC vs. USTRPC, SCLDF, and FOE

The NAFTA “seeks to create a freetrade bloc involving two developedcountries (the United States andCanada) and a developing one(Mexico) that has weakerenvironmental standards andenforcement than its more developedcounterparts… Mexico’s less stringentenvironmental requirements tend tolower production costs, which, whencoupled with the removal of tradebarriers under NAFTA, may createincentives for businesses to locate inMexico.” (Public Citizen, 1992:6-7)

10/14/92 Audley Affidavit, PC vs. USTRPC, SCLDF and FOE

“Under NAFTA, Mexico’s weakerenvironmental standards andenforcement activities may provide anincentive for some businesses to relocateto Mexico.” (Public Citizen, 1992:12)

3/16/93 Senate HearingSen. Max Baucus

“Can US industry avoid US laws byrelocation to Mexico?” (Senate Hearing,3/16/93)

9/22/93 House TestimonyGU

“NAFTA provides an incentive forcompanies from Asia and Europe, aswell as the United States, to moveoperations to Mexico… [These]companies will have little interest inincreasing environmental protection…They will continue to use their politicaland economic power to limitimprovements in environmentalstandards.” (Hearings before theSubcommittee on Energy and Power,1993:78)

9/28/93 Senate TestimonyPC, SC, HS, PIRG, CWA

“The NAFTA encourages UScompanies to relocate to Mexico to saveon production costs.” (Hearings beforethe Senate Finance Committee,1993:278)

Fall 1993 Academic JournalStewart

“Environmentalists feared that a freetrade regime would cause industries tomigrate from the United States toMexico, attracted in part by Mexico’sless demanding environmentalstandards. Such migration wouldaccelerate environmental degradation inMexico and the border area, lead toincreased transboundary spillovers ofpollution from Mexico into the UnitedStates, and fuel demands for relaxationof US environmental standards.”(Annual Symposium, 1993:752)

12/23/94 Wall Street JournalCTC

Furniture factories will continue tomove to Mexico to escape Los Angelesair-quality standards. (Fighting“NAFTA”, 1994:A1)


Counter-claims

4/18/91 New York TimesDDF

“‘[Pollution havens were] somethingconceivable four or five years ago whenwe did not have the contacts andinformation we have now,’ said thespokesman for the Mexican delegation,Fernando Menéndez Garza, air pollutioncoordinator for Mayor Manuel Camachoof Mexico City. He added thatenforcement had increased at least five-fold in the last two years and that anycompany seeking to relocate to Mexicowas told that it must comply withemission standards at least as strict aswhere it came from.”

10/91 Review of Environmental IssuesUSTR

Industries likely to relocate ought tomeet four criteria: high environmentalcompliance costs, exposure to expandedimport competition from Mexico, lowrelocation costs relative to USenvironmental compliance costs, andlow environmental costs in the newlocation. A USTR study completed in1991 found only one US industry in 455that met these criteria. (Office of theUSTR, 1991)

1/92 Independent StudyProvincial Gov’t of British Columbia, Canada

Despite the high abatement costsassociated with many capital intensiveindustries, several factors make themunlikely candidates for relocation due topotential savings through reducedabatement expenditures. Humanresource and infrastructureconsiderations can overrideenvironmental regulatory factors insiting decisions. Low per-employee

productivity would undermine cost-savings from lax pollution controls.Potential levies for infrastructure alsofigure against relocation in pursuit ofsavings. More importantly, private firmsmust consider both current and futureregulatory action. Rising enforcementefforts, in response to both domestic andinternational pressures, indicate thatopportunities to evade expensivepollution control measures in thepresent may not be available in themedium to long term. (West and Senez,1992)

2/92 Academic PaperNBER

Evidence from maquiladora activityindicates that industrial relocation toMexico is driven by low labour costs,not by low pollution abatement costs.(Grossman and Krueger, 1992)

9/24/92 Wall Street JournalIIE and US “trade officials”

The problem is overstated. Mexico hasan increasing demand for a cleanerenvironment. It is too expensive to re-engineer to take advantage of laxstandards. The pollution actually resultsfrom “overcrowding, lack of runningwater and sewage, and small companieslooking to save money onenvironmental control.” (Gutfeld,1992:R9)

10/92 Official ReportGovernment of Canada

“There is little or no empirical evidenceof industries relocating to takeadvantage of possible reduced costs ofcomplying with lower environmentalstandards.” The report identifies severalreasons for this conclusion: pollutionabatement costs are generally only one


percent of production costs, otherfactors are more important in relocationdecisions, pre-NAFTA tariffs weregenerally already low in pollutingindustries, and future enforcement ofMexican standards is likely to increase — thereby undermining anylong-term savings expected fromrelocation. (Government of Canada,1992:9)

“There is likely to be minimal, or norelocation of Canadian industry due tothe projected differences in pollutionabatement costs.” (Government ofCanada, 1992:10)

b. Greater Resources for Enforcement inMexico due to Economic Growth

Claims


As GDP per capita increases, air qualityimproves — indicating a positiverelationship between economic growthand environmental protection.(Grossman and Krueger, 1992)

3/16/92 Houston ChronicleAmpudia

“In Mexico we are aware of themagnitude of the environmentalchallenge. Our border registers anenormous activity, with more than 240million crossings a year, with intenseeconomic activity, and with apopulation that has doubled in the lastten years. Mexico has already enforcedits environmental legislation andincreased by 800 percent its budget forthis purpose. A dramatic increase hasbeen seen in the number of qualifiedinspectors… In this context, throughthe negotiation of NAFTA, Mexico is

looking for a commercial accord thatwill benefit our nations, and will beextremely careful of the environmentand the rational use of our naturalresources. Mexico will not accept anyproject, domestic or foreign, if it doesnot strictly comply with environmentcriteria.” (Ampudia, 1992)


“Economic growth is not automaticallydetrimental to the environment.Emissions [of SO2 in Canada from 1970to 1990] decreased despite growth in theCanadian economy.” (Government ofCanada, 1992:8)

3/3/93 The Washington PostSen. John Chafee (R-R.I.)

“The best way to ensure that Mexico’senvironment is cleaned up is to helpMexico become a prosperous country,and that means NAFTA.” (Behr, 1993)

5/3/93 The Washington PostAS

“Studies show that the relationshipbetween industrialization andenvironmental degradation resembles abell curve. Pollution is greatest in theearliest phases of industrialization butbegins to level off and then decrease asmore wealth is available for controllingpollution. As one of the wealthierdeveloping countries, Mexico is almostat the point where it will be able tobegin devoting more resources toenvironmental cleanup. The free tradeagreement will help get it there faster.”(Purcell, 1993:A19)


11/3/93 El FinancieroProfepa

Without NAFTA, many programsintended to promote environmentalprotection through enforcement andbinational cooperation will likely notsurvive or will be severely limited.Institutions proposed to targetinternational funds at environmentalprotection, such as the North AmericanDevelopment Bank, may also losesupport. (Oñate, 1993:20)

9/28/93 Senate TestimonyEDF

“The NAFTA package will provide theregulations and funding necessary tomitigate the impact of increaseddevelopment on the Mexicanenvironment.” (Hearings before theSenate Finance Committee, 1993)

11/93 US Government ReportClinton Administration

“The economic changes that come withthe NAFTA… will expand the publicand private resources for pollutioncontrol and other environmentaleffects.” (Government of the US, 1993)

3/1/94 Position PaperCCC

The NAFTA will increase Mexico’seconomic growth and, therefore,provide additional resources for Mexicoto better address its environmentalconcerns. (Canadian Chamber ofCommerce, 1994)

12/23/94 Wall Street Journal“Mexican officials”

Without a growing economy, Mexicocan not afford to pay for environmentalcontrols and cleanups. (Fighting“NAFTA”, 1994:A1)

12/23/94 Wall Street JournalSantiago Oñate Laborde “Mexico’s topenvironmental official”

“With NAFTA, we’ll have a morehealthy economy and companies willhave access to better [environmental]technology”, (Fighting “NAFTA”,1994:A1)

Counter-claims

12/91 Position PaperNRDC, GC, and INAINE

The draft NAFTA text “lacks a detailed,objective examination of means tochannel finances from public andprivate sources directly into neededenvironmental infrastructure andregulatory programs. The ‘trade =prosperity = environmentalimprovement’ formulation is, for allintents and purposes, presented as anarticle of faith.” (NRDC and GC,1992:5)

9/16/92 Senate TestimonyNRDC

There is no comprehensive, long-termstrategy to fund environmentalmonitoring, enforcement andinfrastructure. (Ward, Senate Testimony, 1992)

3/30/93 Position PaperWCELA

“This simplistic idea at best confusesregulatory standards with the state ofthe environment. It also runs contraryto the simple evidence that the earth isfacing an unprecedented environmentalcrisis after 150 years of equallyunprecedented economic growth andgrowth in trade.” (Rolfe, 1993:2)



“Some environmental advocates assertthat economic growth inevitably causesincreased environmental degradation.Because economic growth is both theobjective and the result of tradeliberalization, these advocates stronglyoppose trade liberalization. They pointto the severe pollution and otherenvironmental problems of themaquiladora area as evidence that tradeliberalization causes environmentaldegradation.” (Annual Symposium,1993:752)


US investors in Mexico are exploiting apoor nation that does not have thefunds for cleanup. (Fighting “NAFTA”,1994:A1)

Institutional responses

The NAFTA environmental sideagreement guarantees citizen access todomestic courts to augment publicentity enforcement. (NAAEC Article 6and 7)

c. Unfair Competitive Advantage to Mexico-Based Industry due to LowerEnvironmental Standards

Claims

9/16/92 Senate TestimonyNRDC

Poor enforcement of environmentalregulations can exacerbate competitiveimbalances within the US-Mexico-Canada trade relationship as firms gaineconomic subsidies by exploitingpollution havens. (Ward, SenateTestimony, 1992)


“NAFTA puts US companies followingenvironmental and other social rules ata competitive disadvantage for stayingin the United States and doing the rightthing by following US laws.” (Hearingsbefore the Senate Finance Committee,1993:278)

Institutional Responses

The North American Commission forEnvironmental Cooperation wascreated, in part, to resolve potentialallegations that a NAFTA partypersistently fails to enforce its domesticenvironmental laws. (NAAEC, Part V)

d. Avoidance of Environmental Laws byPrivate Firms due to CompetitivePressuresClaims

7/7/91 Los Angeles TimesMexican Government Report

Mexican firms will shirk environmentalresponsibilities to reduce operating costsunless Mexican officials substantiallyimprove enforcement of environmentallaws. [From a confidential reportprepared for the Mexican government,as described in the US media.] (Darling,1991)


“Unrestricted competition underNAFTA could force Mexican industryto ignore environmental laws.”(Christensen and Leonard, 1991:8)


7/12/93 La JornadaRFSA

Economic sanctions, in place ofcommercial sanctions negotiated underNAFTA’s environmental agreement,may not prove strong enough to haltindustrial pollution since manycompanies may choose to simply pay thefines and avoid making changes in theiroperations. (Restrepo, 1993)


The North American Commission forEnvironmental Cooperation wascreated, in part, to resolve potentialallegations that a NAFTA partypersistently fails to enforce its domesticenvironmental laws. (NAAEC, Part V)

e. Greater Environmental Problems in theInterior of Mexico due to EconomicGrowth from NAFTA

Claims

11/27/90 Position PaperNWF

10/16/91 House TestimonyNWF


The NAFTA will attract more foreignindustries to Mexico, further taxing thecountry’s ability to meet national andinternational environmental protectionstandards. The environmentalconsequences of the maquiladoraindustries already evident along theborder will be spread throughoutMexico due to NAFTA. (NationalWildlife Federation, 1990; NationalWildlife Federation, 1991b; NationalWildlife Federation, 1991c)


“NAFTA will simply accelerate theenvironmentally destructive andultimately unsustainable developmentthat has occurred under the maquiladoraprogram.” (Christensen and Leonard,1991:10)


Expanded trade can increase damage tothe environment. More severe airpollution due to increased interstatetrucking appears to be a commonproblem generated by past free tradeagreements. (Hearings before theSubcommittee on Rules of the House,1991)


Since Mexico enjoys comparativeadvantage in a set of activities(agriculture and labour-intensivemanufactures) that on the whole are“cleaner” than the average, thecomposition effect of trade liberalizationmay well reduce pollution there dueprimarily to contraction in chemicalproducts, rubber and plasticsproduction. Investment liberalization, inaddition to trade liberalization, willreverse these effects, promoting growthin these and other heavily pollutingindustries such as paper products,primary metal, fabricated metals andtransportation equipment. Since theNAFTA includes both trade andinvestment liberalization, the laterconcerns are germane. (Grossman andKrueger, 1992)


9/8/92 ConferenceCárdenas

“[NAFTA] is an unacceptable situationin all three countries. These areagreements that may condition the livesof several generations, political relationsand institutionality, as well as theguidelines of economic and socialdevelopment. Of the little that has beenleaked and the experience of the US-Canada agreement, one can foresee thatMexico’s development will besubordinated to the interests of the USeconomy and particularly to those of thelarge multinational corporations thatoperate from this country.” (Cárdenas, 1992)

9/24/92 Wall Street JournalPC

The NAFTA will make already severepollution in Mexico worse. (Gutfeld,1992:R9)


“The NAFTA will tend to aggravateproblems associated with Mexicanindustrial centers and transportarteries.” (Government of the US,1993:74)


The environmental damage apparent inthe maquiladoras will become the normthroughout Mexico. (Fighting“NAFTA”, 1994:A1)

9/95 Paper Quadri

“It is possible that, despite theenvironmentally benign efforts… thatwill act within a system of free trade,the absolute increase in natural resourceuse and environmental services broughtby accelerated growth in production andconsumption, even considering thereduction of environmental burden perunit of production, will tend towardconstantly more extensive pressures onthe environment.” (Quadri, 1995:78)

Counter-claims

9/93 Fact SheetWWF

“Economic development resulting fromthe NAFTA will not accelerateenvironmental degradation.” Theinstitutional responses of the threegovernments provide “a structure whichaddress each of Mexico’s environmentalproblems forcefully, which will greatlyincrease the input of environmentalgroups, and which will institutionalizerecent favourable changes in Mexico.”(World Wildlife Fund, 1993)


Mexican government spending onenforcement was increased in responseto complaints. Mexico also increasedthe quality and quantity of itsregulations to win favour in the US andthus the passage of NAFTA. More loanswere made available from the WorldBank and the Inter-AmericanDevelopment Bank to fundenvironmental projects in Mexico. The US increased its cooperation withMexico on enforcement actions,including training environmentalenforcement officials.


a. Potential for Challenges to Federal and Sub-federal Environmental Standards underNAFTA Provisions

Claims


Past trade agreements illustrate thatdomestic environmental and consumerhealth and safety standards that affectanother country’s ability to export to, orinvest in, the United States can beundermined due to challenges by tradepartners. (Hearings before theSubcommittee on Rules of the House,1991)

4/24/92 Congressional TestimonyNRDC

“NAFTA could preempt national, state,and local environmental standards as‘non-tariff trade barriers’”. (NRDC,1992)


Following a finding of pesticide residueon produce exported to the US,“Mexican farmers might challenge a USlaw banning a pesticide that is allowedin Mexico, arguing that the ban is anunfair barrier to trade.” (Gutfeld, 1992:R9)

Challenges to environmental laws willend up before international or trilateraltribunals more interested in free trade.(Gutfeld, 1992:R9)

10/14/92 Plaintiffs’ BriefsPC vs. USTR PC, SCLDF and FOE

Under NAFTA’s food safety provisions,“standards must be based on scientificprinciples and risk assessment and mayrestrict trade only to the extent

necessary to achieve their legitimategoals. These and other aspects ofNAFTA’s food safety provisions arelikely to give rise to challenges to manyUS food safety laws, such as theDelaney Clauses of the Federal Food,Drug and Cosmetic Act, which prohibitcertain carcinogenic food and coloradditives, and California’s Proposition65, Safe Drinking Water & ToxicEnforcement Act, which prohibitsexposures to certain carcinogens andreproductive toxins without providing aclear warning. Countless other foodsafety measures may also be vulnerableto challenge under the NAFTA”.(citations omitted) (Public Citizen,1992:15)

12/14/92 Ad: The Washington PostSC, GU, FOE, HS, NCL, PAA, EII, RAN,CTC, FTC, FET, CWA, PC, IATP, NTC,CIEL, PAN, AWI ,CA, SAPA, MMF

Trade panels under NAFTA and GATTare not transparent. Multinationals can,therefore, circumvent democracy (avoidCongress) and have a better shot atattacking laws through the NAFTA andGATT bureaucracies, e.g., Tuna-Dolphin Case. (SABOTAGE,1992:A20)

1/15/93 La JornadaCONIECO

Business leaders will not accept anenvironmental side agreement toNAFTA that will make the US into an“environmental police force”. “We willalso not permit Mexican authorities tonegotiate stricter environmental laws.What US legislators want to do is makethe laws stricter so that when Mexicanindustry can’t comply they will “imposethe so-called compensating ecologicaltax.” [The US] wants to “applyprotectionist measures for their products

13Potential NAFTA Environmental Effects: Claims and Arguments — 96/04

2 . L E G A L I S S U E S

and in reality are not the least bitinterested in caring for Mexico’senvironment.” (Sandoval, 1993)

3/4/93 Letter to USTRDOW, CIEL, FOE, SC, PC, HS, HSI,IATP, CRA, NFFC, EII, MMF, API, RAN,WDCS, PAWS, FFA, EIA, ESI, IPPL,NYPIRG, CNI, NTC, WRI

The NAFTA Article 105 underminesthe ability of sub-federal governments toinnovate in the realm of public policyand does not assure their ability to“establish initiatives that exceed federaland international standards.” (Defendersof Wildlife, et al., 1993:5)

“Under Chapter 10 of NAFTA, …greenprocurement initiatives are vulnerableto challenge.” (Defenders of Wildlife, etal., 1993:8)

3/16/93 Senate HearingSen. Max Baucus

“Can NAFTA be used to attack USlaw?” (Senate Hearing, 3/16/93)

3/18/93 La JornadaLarios

Mexico’s laws should not necessarily bechanged because of requirements set outunder NAFTA because such changescould further threaten Mexico’s weakeconomy already hit hard by crisis.Instead of changing its laws, Mexicoshould improve environmentalconsciousness among its citizens andpush for other environmentalimprovements. (Larios, 1993)

6/9/93 Letter to USTRNRDC

The risk assessment, or balancing test,requirement regarding human healthstandards will not allow parties to adoptor maintain “zero risk” policies, such as

in the Delaney Clause of the FederalFood, Drug and Cosmetic Act.(NRDC/Ward, 1993)

6/30/93 Opinion, PC vs. USTRJudge Richey

“Those laws that are found to becontrary to the NAFTA’s free tradeprovisions either cannot be applied orcan become the basis of trade sanctions.In addition, by virtue of the SupremacyClause, a state law that conflicts withthe NAFTA is preempted by theNAFTA.” (Citations omitted) (Public Citizen, 1992:14)


The NAFTA will endanger wildlife lawswhich limit the import of ivory, tropicalbirds, dolphin-safe tuna and sea-turtle-safe shrimp. (McCloskey, 1993:A13)

9/13/93 Letter to USTRCTC

“State and local laws impacting tradethat enact stricter environmentalstandards than international disputeresolution standards could be challengedas illegal trade barriers.” “State and localprocurement laws and policies designedto create ‘green markets’ for recycledmaterials, energy conservationtechnologies and other environmentallydesirable products and services could besubject to challenge in front of atribunal.”

Federal legislation designed to protectmarine mammals, wildlife and fisheries“could be subject to challenge as illegaltrade barriers.” “Efforts to conserveforests…and to otherwise restrict theexport of natural resources…could beundercut as unfair trade practices.”(Citizens Trade Campaign, 1993)



“NAFTA undermines so-called greenprocurement regulations and standardsthat are applied by many of our Stateand local governments and the FederalGovernment… NAFTA’s procurementrules in Chapter 10 provide that manyof these innovative energy savinginitiatives could be viewed as technicalbarriers to trade and could bechallenged by our NAFTA partners.”(Hearings before the Subcommittee onEnergy and Power, 1993:80)


“Some important US environmentaland consumer protections [if challengedunder NAFTA] could well run afoul of[NAFTA’s test] requirements.”Important state and municipal laws mayalso be threatened under the NAFTA’stest procedures. Process-based standardsmay also be challenged under theNAFTA. (Hearing before the SenateFinance Committee, 1993:277)

10/6/93 Position PaperSC

“Under NAFTA, US environmentallaws could be required to meet tests notfound in US domestic law concerningtheir compatibility with internationaltrade rules.”

“NAFTA also requires that standards be‘based on scientific principles’ and ‘riskassessment’ (NAFTA, Article 712.3).Regulations based on consumerpreference or on the precautionaryprinciple could be subject to challenge.The sound-science test would permitNAFTA dispute panels to second-guessfood safety laws.” (Sierra Club, 1993:6-8)


Environmentalists were concerned thatthe NAFTA would lead to “anevisceration of US efforts to bar importsof goods, such as Mexican-caught tuna,because of the environmental harmcaused by the means of production.”(Annual Symposium, 1993:752)

12/23/94 Wall Street JournalColgan

Canadian companies may use theNAFTA to challenge Maine’s regulationof organically grown produce. (Fighting“NAFTA”, 1994:A1)

Counter-claims


“The NAFTA will guarantee the rightof governments in Canada to select thelevel of environmental protectionappropriate to Canadian environmentalconditions and priorities.” (Governmentof Canada, 1992:5)


“Environmental, health and safetyregulation of products can obstructtrade… [and] may have the purpose oreffect of preferring and protectingdomestic producers.” (AnnualSymposium, 1993:755)


“None of the US’s environmental lawsare disallowed under NAFTA…Conservation laws that are non-discriminatory can be successfullydefended [under the NAFTA].”

“The US government takesresponsibility for defense of legitimate


sub-federal standards… and include[s]states as full participants in any panelproceeding that would involve theirlaws.” (National Wildlife Federation,1993)

9/28/93 Senate TestimonyEDF

The NAFTA requires that domesticenvironmental laws have “a legitimatepurpose”. It does not impose an“unnecessary restriction to trade” test ora “no more restrictive than necessary”test. (Hearing before the SenateFinance Committee, 1993)

9/93 Fact SheetWWF

“NAFTA will not lead to the repeal ofany US environmental standards.”

“The NAFTA package will not lead tothe degradation of natural resources.NAFTA permits the US, Canada andMexico to adopt measures to protectand conserve natural resources.”

“State and local governmentprocurement laws that encouragerecycling, waste reduction and energyconservation are not at risk underNAFTA. The procurement provisions inNAFTA do not apply on the state andlocal level.” (World Wildlife Fund,1993)


“NAFTA’s provisions ensure that theability of the United States to establishand enforce its food safety and pesticidestandards will be maintained and thatthe integrity of US regulatory processeswill be fully respected.” (Government ofthe US, 1993:ES-6)


Article 906(2), as well as the CEC,prevent the weakening ofenvironmental laws as a result of theNAFTA.

“Prohibitions on the illegal trade inwildlife and endangered species areexplicitly protected under NAFTAArticle 104.” (National WildlifeFederation, 1993)

The burden of proof that anenvironmental law or regulation is anon-tariff barrier shifted to thechallenging party, opposite to theposition of the GATT (NAFTA,Chapter 20). To augment this, adefending party can move their venueto a NAFTA panel from a GATT/WTOpanel, where the burden goes the otherway. (NAFTA, Article 2005).

Domestic sanitary and phytosanitarystandards may be set at any level underthe NAFTA so long as they meet a“scientific basis” test. The NAFTAexplicitly permits adoption of standardsthat exceed federal or internationalstandards.

Articles 904, 905 and 906 of theNAFTA text ensure that each Party, orits political subdivisions, can enact itsown health, safety and environmentalprotection standards; and that, whileharmonization is encouraged, higherstandards may be set by particular units.Further, only upward harmonization ispermitted by the Agreement.Subchapter B of Chapter 7 addressesthese issues with specific reference tosanitary and phytosanitary measures.


b. Downward Pressure on EnvironmentalStatutes in all Three Countries to attractInvestment

Claims




Under the NAFTA, the Mexicangovernment will relax its rules onforeign investment, reducing thelikelihood that foreign companies willbe required to meet strict environmentalrequirements in order to invest inMexico. (National Wildlife Federation,1990; National Wildlife Federation,1991b; National Wildlife Federation,1991c)


“Industry threats to move south will putdownward pressure on USenvironmental standards.” (Christensenand Leonard, 1991:8)

12/14/92 Ad: The Washington PostSC, GU, FOE, HS, NCL, PAA, EII, RAN,CTC, FTC, FET, CWA, PC, IATP, NTC,CIEL, PAN, AWI, CA, SAPA, MMF

The competition to attract investmentwill result in a lowest commondenominator result for environmentalstatutes. The country with the leastrestrictive statutes will become the floor,and the others will harmonizedownward to that floor. (SABOTAGE,1992:A20)


The US will have to revise itsenvironmental protections downward to

keep its health and environmentalregulations from causing undueeconomic harm to Mexican exporters,or compensate the Mexicans for the lostopportunities for sales. (Gutfeld,1992:R9)

10/14/92 Plaintiffs’ Brief, PC vs. USTRPC, SCLDF and FOE

“NAFTA may have pollution haveneffects, whereby businesses move theiroperations to Mexico to evade higherenvironmental standards elsewhere inNorth America, which will increaseenvironmental problems on thecontinent, and create pressure to lowerUS standards.” (Public Citizen,1992:17)

“Plaintiffs’ affidavits identify numeroushealth and environmental measures…such as subsidies that promote landconservation, renewable energy andother environmentally beneficialconduct; food safety standards; andtechnical regulations;which may berendered ineffective, in whole or in part,by the NAFTA.” Examples are:pesticide residue standards; mandatorynutritional labelling; infant formulatesting requirements; Circle of PoisonPrevention bill; food irradiation andbiotechnology restrictions; bans onimports of shrimp caught throughtechnology that harms endangered seaturtles; bans on fish imports fromcountries using large-scale driftnets;inspection requirements; Proposition 65;moratorium on the use of hormones inmilk production; ban on ivory importsfrom countries without adequateelephant conservation programs;pollution controls and workplace healthstandards; pesticide bans; recyclingtaxes; chemical bans; processes forapproving drugs, medical devices,pesticides, or chemicals; renewableenergy and conservation subsidies; andsubsidies for land conservation and


alternatives to pesticides. (PublicCitizen, 1992:21)


The NAFTA will create obligations tomove American pollution laws towardinternational standards, which generallylag behind. This would push the UStoward weakening its laws and wouldexpose states to pressures to weakentheir laws. (McCloskey, 1993:A13)


“Pressure will occur on local and stateregulators within the US to reducestandards and enforcement here.Companies will hold out the threat ofmoving offshore to avoid theirenvironmental responsibilities in theUS.” (Citizens Trade Campaign, 1993)


“The standards provision may beinterpreted as generally encouraging‘harmonization’ of standards towardsgenerally lower international standards.”Detailed procedures under the NAFTAfor “conformity assessment” and otherharmonization mechanisms mayfacilitate this process. (Hearing beforethe Senate Finance Committee,1993:277)

10/6/93 Position PaperSC

“Article 1114.2 is meaningless from alegal standpoint. Use of the term‘should’ rather than the term ‘shall’indicates that its obligations are non-enforceable.” (Sierra Club, 1993:9)


Environmentalists were concerned thatNAFTA would lead to “a weakening ofUS federal and state food, plant, andproduct standards.” (AnnualSymposium, 1993:752)

Counter-claims

1/21/93 Press ReleaseINE

“Within NAFTA the three countries areprohibited from making theirenvironmental standards less strict inorder to attract more investment. Otherinternational agreements signed by thethree countries meant to provide evenstricter environmental protection willtake priority over bilateral agreements.”(Reyes, 1993)


The North American Commission forEnvironmental Cooperation was createdto promote environmental cooperationamong the three NAFTA parties.

Chapter 11 of the NAFTA text (Article1114) specifically recognizes “that it isinappropriate to encourage investmentby relaxing domestic health, safety orenvironmental measures.”

Failure to enforce domesticenvironmental law in an effort to attractinvestment can lead to penalties andtrade sanctions under the NAFTA.



Through the BECC and the NADBank,the NAFTA agreement providesmassive new funding for border clean upand improvements in existinginfrastructure. These measures areintended to deal with both existingproblems and the likely effects ofNAFTA-induced growth along theborder.

a. Increased Air Pollution

Claims


Under the NAFTA, the maquiladoraindustry will expand, causing greater healthand environmental problems within theborder region. (National WildlifeFederation, 1990)

12/9/91 House TestimonySC

“Increased trade with NAFTA willincrease the amount of vehicular trafficalong the border, as well as bordercrossing. This increase will bring with itgrowth in congestion, emissions, andnoise.” (Hearings before theSubcommittees on InternationalEconomic Policy and Trade, and onWestern Hemisphere Affairs, 1991:129)

Fall 1992 Academic JournalZagaris

“As industrialization in the borderregion continues, additional stress willbe placed on the border’s air quality.”(Zagaris, 1992:73)

“… increased economic liberalizationand NAFTA in particular will result inincreased industrialization, along withincreased commercial, residential, andvehicular activity.” (Zagaris, 1992:74)

A major source of air pollution is motorvehicle emissions. (Zagaris, 1992:73)


The NAFTA has the potential toexacerbate serious air quality problemsin the border area. (Public Citizen,1992:22)


“A dramatic expansion of truck trafficalong the US-Mexico border seemsinevitable… The resulting pollutionwould be significant… The NAFTAcompletely lacks… compensatorymeasures.” (Hearings before theSubcommittee on Energy and Power,1993:136-7)

Counter-claims

Winter 1993 Academic JournalReilly

“The land transportation provisions ofthe NAFTA will decrease bordercongestion and attendant air pollutionby allowing trucks to transport cargoesdirectly to their destinations in bothcountries, cutting idling time, andending the need to switch trailers at theborder and return them home empty.This will reduce air pollution and alsoreduce the risk of hazardous wastespillage in the environmentally stressedborder area.” (Reilly, 1993:186)


3 . B O R D E R I S S U E S


“NAFTA contains offsetting provisionsthat address [problems of congestion,noise and emissions], such as opening upcross-border trucking to avoid delays,and eliminating the need for inefficient‘empty’ return trips…” (Government ofthe US, 1993:ES-6)

“The NAFTA provides specific customsadministration procedures to streamlineimport and export procedures and toease congestion at the customs borderpoints. This will alleviate airpollution…”

“Within eight to ten years ofimplementation of the NAFTA, it iseven possible that border area airemissions in Mexico could be reducedbelow current levels if the mostfavourable projections of cooperativeefforts and dispersal of growth arerealized.” (Government of the US,1993:ES-6,7)


On February 25, 1992, Presidents Bushand Salinas released the first stage of theIntegrated Border Environmental Plan(covering 1992 to 1994) to address airand water pollution, hazardous waste,chemical spills, pesticides andenforcement.

The US-Mexico Border EnvironmentCooperation Agreement establishes theBorder Environment CooperationCommission and the North AmericanDevelopment Bank to address theinfrastructure needs of the border.

b. Increased Water Pollution

Claims



Under the NAFTA, further significantgrowth in the border regions of bothcountries could completely overwhelmefforts to protect border water resources.(National Wildlife Federation, 1990;National Wildlife Federation, 1991b)


Water quality along the border in pre-NAFTA days was critical. “Moreindustry [due to NAFTA] can onlyaggravate a situation which is far frombeing remedied.” (Hearings before theSubcommittees on InternationalEconomic Policy and Trade and onWestern Hemisphere Affairs, 1991:130)


Increased activity on the border willresult in increased water contaminationfrom industrial dumping and humanwaste. (Zagaris, 1992:74-5)


The NAFTA has the potential toexacerbate serious water qualityproblems in the border area. (PublicCitizen, 1992:22)

02/93 Press ReleaseMEM

Movimiento Ecologista Mexicano calls for abinational referendum on the NAFTAand its side agreements so as to gathersupport for reforms to environmental


provisions. The group says that bordercitizens were not consulted duringnegotiations and that the agreements dolittle to solve serious water pollutionproblems in the Rio Grande caused byboth maquiladoras and illegal imports ofhazardous waste into Mexico. (MEM,1993)

Counter-claims


“Implementation of the NAFTA willprovide added impetus to cooperativeprojects already underway between theUS and Mexico, pursuant to theIntegrated Border Environmental Plan(IBEP), to promote water quality andpreserve the border environment.Moreover, the Border EnvironmentCooperation Agreement will provideadditional financing for infrastructureprojects to treat waste water.”(Government of the US, 1993:ES-7)




c. Increased Demand on Scarce WaterResources

Claims




Under the NAFTA, further significantgrowth in the border regions of bothcountries could completely overwhelmefforts to properly develop border waterresources. (National WildlifeFederation, 1990; National WildlifeFederation, 1991b; National WildlifeFederation, 1991c)


“An increase in industry and plantsitings will increase the draw on aquifersfor water in the border region.Overdrafts are already severe in manyareas.” (Hearings before theSubcommittees on InternationalEconomic Policy and Trade and onWestern Hemisphere Affairs, 1991:130)


Increased activity will increase thedemand for water. Increased use alsolowers quality due to increased levels ofminerals in ground water as it is drawnoff. (Zagaris, 1992:74-5)


Counter-claims


“The Border Environment CooperationAgreement will provide additionalfinancing for infrastructure projects to…provide clean drinking water supplies.”(Government of the US, 1993:ES-7)




d. Increased Solid Waste Disposal Problems

Claims


The NAFTA will result in continuedrapid population growth in the borderregion in areas without solid wastedisposal infrastructure or areas withoutthe capacity to keep up with growth.Hazardous wastes are often dumped inthe solid waste disposal sites rather thanbeing properly disposed of. Dumps areoften burned, which further reduces airquality. In addition, dumps also allowseepage into water supplies causingcontamination. (Zagaris, 1992:81-2)




e. Increased Illegal Dumping of ToxicChemicals and Hazardous Wastes inMexico due to Industrial Growth and theAbsence of Satisfactory Disposal Methods

Claims


Illegal dumping of hazardous wastes inMexico prior to the NAFTA wasparticularly acute in the border regionand Mexico City. Expansion of tradewill likely exacerbate the problem asforeign investment and economicgrowth lead to increased generation ofhazardous wastes for which Mexico hasalmost no treatment or disposalcapacity. (National Wildlife Federation,1991c)

11/91 Academic JournalNBER

Trade liberalization will lead to a 10.5million pound increase of toxic releasesfrom manufacturing enterprises inMexico. (Grossman and Krueger, 1992)



Hazardous waste disposal problems inMexico will expand due to economicgrowth. Improved tracking, storage anddisposal capacity is required to copewith this growth. (Hearings before theSubcommittees on InternationalEconomic Policy and Trade, and onWestern Hemisphere Affairs, 1991:128)


Increasing production of toxic chemicalsand hazardous waste along the bordermay overwhelm the capacity ofAmerican facilities to handle thecontrol of those industrial by-products.(Zagaris, 1992:77-9)


The NAFTA has the potential toexacerbate seriously inadequatehazardous waste disposal problems in theborder area. (Public Citizen, 1992:22)

Spring 1993 Academic JournalNRDC (Comment attributed to HomeroAridjis, President of Grupo de los Cien)

Increased industrial activity will lead toever increasing amounts of toxicpollution. (Ward and Fischer, 1993)

7/12/93 El FinancieroFOE

Illegal and clandestine hazardous wastedumps along the US-Mexico border, inaddition to the certain failure ofauthorities to control environmentalpollution caused by the explosivegrowth of industry in the border region,should prevent the three countries fromsigning a free trade agreement,according to Gabriel Sánchez of Friendsof the Earth. (Vigueras, 1993)

Counter-claims


“With the NAFTA, resources will bemade available to manage [hazardous]waste properly and encourageenforcement of hazardous waste laws.”(Government of the US, 1993:ES-8)


Mexico has instituted a model of theUS Toxic Release Inventory as a resultof the side agreement’s requirement forsuch reporting. (NAAEC, Article5(1)(d)).



f. Increased Potential for ChemicalEmergencies

Claims


Because Mexico lacks a “communityright-to-know” law, the increase inindustrial activities predicted under theNAFTA may increase the likelihood ofchemical emergencies in the borderregion. (Hearings before theSubcommittees on InternationalEconomic Policy and Trade and onWestern Hemisphere Affairs, 1991:128)



“Increased trade between the US andMexico is likely to result in an increasein industrial growth along the US-Mexico border, thereby raising thepossibility of a chemical emergency.”(Zagaris, 1992:82)


The NAFTA has the potential toexacerbate the serious inability to dealsafely with chemical emergencies in theborder area. (Public Citizen, 1992:22)

Counter-claims


“The US and Mexico are engaged incooperative efforts to improveemergency preparedness coordinationbetween the two countries.” (USGovernment, 1993:ES-9)

“NAFTA contains offsetting provisionsthat address [problems], such as… riskytransfers of hazardous cargoes at theborder.” (Government of the US,1993:ES-6)


Cooperative activities to improveemergency preparedness coordinationbetween the two countries is specificallyincluded in the work program for theCEC. (Government of the US,1993:ES-9)

g. Greater Pressures on Wildlife andEndangered Species

Claims


Development pressures created byNAFTA will contribute to thedestruction of vital wildlife habitat inthe border region. Cattle grazing in thefragile desert environment of the borderis of particular concern. (NationalWildlife Federation, 1991c)


“The general proliferation of plant sitesand associated settlements means thatmore wildlife habitat will be lost, as wellas more use of water so that less will beleft for wildlife in a dry climate.”Accelerated clearance of brush alongthe Rio Grande River may also resultfrom the NAFTA “if many new bridgesare built across the Rio Grande inconnection with increased trade.” Theriver bottom “provides critical habitatfor such species as the ocelot and thejaguarundi.” (Hearings before theSubcommittees on InternationalEconomic Policy and Trade, and onWestern Hemisphere Affairs, 1991:131)


There are 50 endangered or threatenedspecies and 100 ESA candidate speciesin the border area. The habitats of thesespecies are particularly rare and fragile.Increasing population on both sides ofthe border will further damage thehabitats. (Zagaris, 1992:82-3)

Trade in protected wildlife may increaseas a result of liberalization of tradebetween the US and Mexico. (Zagaris,1992:83)



The NAFTA has the potential toexacerbate serious harm to endangeredspecies in the border area. (PublicCitizen, 1992:22)

Counter-claims


“Although NAFTA could contribute toshort-term slight to moderate increasesin adverse effects,… in the long term,increased opportunities for cooperationbetween the US and Mexico will helpto address the stresses of development.”“New environmental funding andincreased personnel [due to theEnvironmental Agreement] could resultin improved environmental conditionsand reduced environmental effects inthe border regions of both countries.”(Government of the US, 1993:ES-9)

h. Dispersion of Industrial Development awayfrom the Border


Impact on the border areas will decreaseas maquiladora development is dispersedaway from the border region. (Governmentof the US, 1993:ES-9)

“The economic changes that come withthe NAFTA… will… disperse industrialdevelopment away from the alreadystressed border area.”

“NAFTA will remove the currentartificial incentives which haveintensified investment along the borderthrough the maquiladora program.(Government of the US, 1993:ES-4-5)

Counter-claims


“Plants manufacturing for the USmarket have little reason to re-locateinto the interior. They will be furtherfrom their US market and face highertransportation costs. Furthermore, roads,communication facilities andinfrastructure to support industry arelimited and inadequate… For sometime, maquiladoras have been able to locateinto the interior, but few have chosen to doit.” (Hearings before the Subcommitteeson International Economic Policy andTrade, and on Western HemisphereAffairs, 1991:133)


a. Accelerated Industrialization at the Borderwill Intensify Existing Public HealthProblems in the Region

Claims

Fall 1992Academic JournalZagaris

“Public health threats result fromincreased migration to the border in theform of the spread of infectious disease.Maquiladoras have attracted a lot ofmigration to the US-Mexico border. Thegrowth has outstripped capacity toprovide roads, sanitation and housingfor the flux of people, resulting in thedevelopment of colonias. The high-population industrialized areas arecharacterized by severe poverty, poorhousing, crowded living conditions,environmental contamination, and anabsence of clean water and sanitationsystems. The conditions are fertileground for a high incidence of infectiousdiseases, especially hepatitis,tuberculosis, measles and diarrhealdiseases.” (Zagaris, 1992:84)

Spring 1993 Academic JournalNRDC

Public health and environmental qualityin the US-Mexico border region arethreatened by dramatic growth in recentyears, attributable largely to unplannedhuman settlement and industrialdevelopment. Unchecked pollutionfrom these sources threatens health andeconomic vitality. (Ward and Fischer,1993)


Increasingly polluted water anddecreasing quantities of safe drinkingwater will severely affect health alongthe border. (Zagaris, 1992:74-5)

b. Introduction of Tainted Food Stuffs to theUS and Canada due to Lower Sanitary andPhytosanitary Standards in Mexico


Citing experiences in the wake of theUS-Canada Free Trade Agreement(FTA), environmental groups fear thatfree trade with Mexico will lead toharmonization of food safety standardsat levels lower than those currently inplace in the US. (Stokes, 1991:865)


The NAFTA “could undercut the safetyof the American food supply”. Threepossible mechanisms are cited:downward harmonization of food safetyregulations, increased imports of fruitsand vegetables from Mexico under theNAFTA subject to (existing) laxinspection protocols for pesticideresidues, and potentially reducedinspection of imported agriculturalproducts due to “streamlined inspectionpolicies.” (Christensen and Leonard,1991:17-20)


As imports of Mexican fruits andvegetables increase under the NAFTA,inspections for pesticide residues maybecome less rigorous. (Hearings beforethe Subcommittees on InternationalEconomic Policy and Trade, and onWestern Hemisphere Affairs, 1991:131)


“The importation of products regulatedin the US by the Food and DrugAdministration (FDA), particularly


4 . P U B L I C H E A LT H I S S U E S

fruits, vegetables and seafood willcontinue to pose an important area ofpublic health concern.” (Zagaris,1992:84)

11/92 Position PaperNRDC

Fuller assurances are needed to beincorporated into NAFTA so that it“will not jeopardize US food safetymeasures, including ‘zero tolerance’provisions governing pesticide residues.”(NRDC, 1992:3)


“Environmentalists were also concernedthat a free trade agreement would leadto an influx from Mexico of fruits,vegetables, and other farm productswith high pesticide residues.” (AnnualSymposium, 1993:752)

9/22/93 House Subcommittee HearingRep. Bill Bilirakis

Mexican standards are not effectivelyenforced, raising doubts about thehazards of increasing imports of theirproduce. (Hearing before theSubcommittee on Energy and Power,1993:40)

Counter-claims


The NAFTA allows any party to set“the highest possible level of protectionfor consumer and food safety it deemsappropriate.” (National WildlifeFederation, 1993)


a. Energy

i) Reduction in air pollution in Mexico due togreater use of natural gas

Claims

1993 Academic PaperYandle

Pre-NAFTA trade restrictions limit theexport of natural gas from the US toMexico, leading Mexican industry torely on higher-polluting petroleumproducts. (Yandle, 1993b)

9/22/93 House TestimonyWhite

“With… greater emphasis on theenvironment, natural gas will be thefuel of choice in the fast-growingMexican economy [under NAFTA].”(White, 1993)

9/22/93 House TestimonyINGAA

“NAFTA will create a positiveenvironmental impact on both sides ofthe border as natural gas becomes the‘fuel of choice’ among end-users andpower generators in Mexico.” (Lay,1993:2)


“By removing barriers and disincentivesto the use of natural gas in Mexico,NAFTA opens up prospects for cleanerpower generation.” (Government of theUS, 1993:ES-5)

5 . S E C T O R A L I S S U E S

Counter-claims


Increased exports of electrical power,natural gas and other clean fuels toMexico may increase exploration andextraction in the United States. Growthin some energy-related fields in the USas a result of the NAFTA’s energyprovisions may have seriousenvironmental impacts on theAmerican side. (Hearings before theSubcommittees on InternationalEconomic Policy and Trade, and onWestern Hemisphere Affairs, 1991:130)


Projected increases in development,particularly in small- and mid-sizedMexican cities slated for industrialexpansion will require significant newcoal-burning electrical energyproduction. (Ward and Fischer, 1993)

ii) Increased damage to natural resources inMexico due to expansion of the petrochemicalsector




Under the NAFTA, increased foreigninvestment in the Mexican oil and gasindustries could lead to increaseddegradation of the environment inMexico, while increasing the risk ofenvironmental calamities such as oilspills. (National Wildlife Federation,1990; National Wildlife Federation,1991b; National Wildlife Federation,1991c)

4/22/93 Proposed letter to CongressGU

“NAFTA Article 608 encourages allthree governments to subsidize oil andgas exploration and development, bysheltering these subsidies fromcountervailing duties.” (Greenpeace,1993)


“NAFTA will lock Mexico’s economyinto further dependence on an industrywhich has been highly destructive toMexico’s natural resources.” (Hearingsbefore the Subcommittee on Energy andPower, 1993:88)

“NAFTA contains no provision forassessing the environmental impact ofenergy exploration, development,production and transportation. Itdiscourages national governments fromintervening in energy trade withregulatory measures which wouldaccount for such impacts.” (Hearingsbefore the Subcommittee on Energy andPower, 1993:80)


“The poor environmental record ofPEMEX argues that the Mexicangovernment will do little to regulate theoil and gas industry. NAFTA, inessence, relies on the goodwill of theforeign investors to bring aboutefficiency improvements and pollutionreductions… The US oil and gasindustry… has an extremely spottyrecord here.” (Blackwelder, 1993)


Counter-claims


“Greater scope for private investment inMexico’s power generation sector shouldhelp mitigate environmental effects ofincreased demands for electricity createdby economic growth.” (Government ofthe US, 1993:ES-5)

iii) Lower incentives for energy conservation inthe US due to more secure access to Mexicanoil reserves and Canadian hydroelectric power

Claims



Secure access to foreign oil wouldreduce incentives for the US to lower itsfossil fuel consumption. (NationalWildlife Federation, 1990; NationalWildlife Federation, 1991b)


“It is possible that a NAFTA would,both directly and indirectly, encouragegreater energy development andresource extraction.” (NRDC, 1991:6)


“NAFTA’s energy chapter expresslypermits incentives for oil and gasexploration, but not for renewableenergy or energy efficiency, which willcreate incentives for development ofnonrenewable energy sources.” (PublicCitizen, 1992:17)

3/4/93 Letter to USTRDOW, CIEL, FOE, SC, PC, HS, HSI,IATP, CRA, NFFC, EII, MMF, API, RAN,WDCS, PAWS, FFA, EIA, ESI, IPPL,NYPIRG, CNI, NTC, WRI

Chapter 6 of NAFTA underminesefforts towards the stabilization ofgreenhouse gas emissions and thereduction of CO2 emissions. TheNAFTA also does not protect “least-costenergy programs, like subsidies toencourage conservation and renewables,from trade challenges.” (Defenders ofWildlife et al., 1993:6)

4/22/93 Proposed Letter to CongressGU

Government support for efficiency andconservation programs is given noprotection under NAFTA (as is oil andgas exploration and development) andsuch programs could be vulnerable tocountervailing duties or other tradesanctions (Greenpeace, 1993)


Local and state energy policies thatreduce environmental impacts bypromoting renewable energy sources orenergy conservation will be undercut bythe energy provisions of the NAFTAthat protect subsidies for oil and gas.(Citizens Trade Campaign, 1993)


“NAFTA encourages continued directsubsidies of all NAFTA parties to theirrespective oil and gas industries for thepurpose of exploration anddevelopment, while making noprovision for incentives to promotenational energy efficiency programs orthe development of non-hydro-renewable energy programs… NAFTA


also contains no provision for theadoption of an integrated resourcesplanning framework which wouldrequire consideration of demand sideenergy measures on a par with thedevelopment of new energy supplyprojects.” (Hearings before theSubcommittee on Energy and Power,1993:79-80)


“The effect of the exemption for oil andgas incentives [in Article 608(2) of theNAFTA] may pave the way for futurechallenges to incentives for eitherefficiency or renewable energy thatgovernment at various levels may beoffering now or in the future.” (Hearingsbefore the Subcommittee on Energy andPower, 1993:134)

iv) Damage to natural resources from accelerateddevelopment of hydroelectric power

Claims

10/26/91 Position PaperNWF, PGE, SC, CNI, BEP and ACN

The existing US-Canada FTAdemonstrates that exploitation ofnatural resources such as oil acceleratesunder more open trade regimes. JamesBay has been devastated to providehydroelectric power exports to the USunder the FTA. (National WildlifeFederation, et al., 1991b)


“NAFTA promotes… construction ofenvironmentally destructive powerprojects for export, such as the JamesBay hydroelectric dams in northernQuebec.” (Hearings before theSubcommittee on Power and Energy,1993:79)


Mexico’s energy future may includedevelopment of large-scale hydroelectricprojects in sensitive ecosystems, e.g.,Balsas River and Usumacinta River.(Ward and Fischer, 1993)

b. Agriculture: Reduced Subsidies WillLower Environmental Impact

Claims

1993 Academic PaperPatterson

“Reduced agricultural subsidies broughton by free trade agreements will reducethe incentive to cultivate marginallands and thereby increase wildlifehabitat.” (Patterson, 1993:62)


“Mexico’s corn market liberalization,and reduction in water and chemicalinput subsidies, could result in reducedcultivation of marginal lands, reducingpotential for erosion, deforestation andloss of biodiversity.” (Government ofthe US, 1993:ES-5)

1995 PaperQuadri

“The gradual liberalization of cornimports promises to reduce situationsthat lead to deforestation, erosion, anddesertification [because of less pressurein rural areas to grow corn in marginalagricultural zones]. (Quadri, 1995)

Counter-claims

12/91 Position PaperNRDC, GC and INAINE

The draft NAFTA text “recognizes thatreduced trade restrictions ‘may result inincreased tillage, irrigation, and


pesticide application in some crops inMexico)”. (NRDC and GC, 1991:13)


Free trade will increase linkagesbetween the American and Mexicanagricultural sectors, which will increasehabitat destruction, soil erosion, waterpollution and human health risks fromfarming and ranching practices. (Wardand Fischer, 1993)

Subsidized American competition willdislocate traditional Mexican farmers,resulting in increased migration of ruralresidents to over-crowded urban areasand increased pollution problems.(Ward and Fischer, 1993)


As a result of the NAFTA, agriculturaltrade policies will “make the increaseduse of pesticides inevitable; acceleratethe loss and erosion of farmlands;displace agricultural communities;devastate rural economies; and increasethe energy intensity of agriculturalproduction”. (Greenpeace, 1993)

1993 Policy EssayBerry

Free trade in agriculture will placefarmers under “increasing pressure tomake up in volume for drasticallyreduced unit prices… Such conservationpractices as are now in use… will, ofnecessity, be abandoned; land rape andthe use of toxic chemicals will increase.”(Berry, 1993:159)

c. Environmental Technologies: IncreasedExports to Mexico

Claims


Liability standards compel manymultinational firms to base their foreignenvironmental standards on US rules.(Office of the USTR, 1991)


“The NAFTA will require that all tariffson imports of pollution abatement andmonitoring equipment [into Mexico] beremoved within 10 years.” Canada’senvironmental technologies industrieswill attempt to win a portion of thisexpanding market. (Government ofCanada, 1992:6)

1993 Academic PaperYandle

Newer plants tend to use the latesttechnology and equipment, reducinginefficiencies and pollution. Even ifdirty plants relocate to Mexico, they arelikely to use newer, cleaner technology.(Yandle, 1993a)


“Increased integration of the NorthAmerican economy will make the latest,most environmentally sound technologyavailable to Mexican industries,allowing them to bypass dirtiermethods.”

“With the passage of NAFTA, Mexicandemand for environmental technologieswill increase significantly, presentingsubstantial commercial opportunities forthe US environmental technologies


industry… NAFTA and the associatedEnvironmental Agreement is expectedto increase considerably environmentalspending in Mexico — from $2 billionin 1993, to well over $3 billion by1997.” (Government of the US,1993:ES-6)

3/1/94 Position PaperCCC

As regulation in Mexico tightens due tothe NAFTA, potential marketopportunities for a variety ofenvironmental services and technologiesin Mexico will grow. Both Americanand Canadian firms will benefit fromthese opportunities. Closer economicties fostered by the NAFTA will alsostimulate greater collaboration amongthe North American businesscommunity in tackling environmentalproblems. (Canadian Chamber ofCommerce, 1994)


Claims


“We are particularly concerned thatthere has yet to emerge from theAdministration any recognition of theimpacts of that [sic] NAFTA will haveon resource conservation initiatives inour countries.”

“Because NAFTA reduces the authorityof federal and state governments tocontrol foreign investment in theresource sector, or to limit the export ofvital natural resources, it will entrenchand even accelerate the unsustainablepatterns of resource exploitation thathave already led to serious crises inseveral resource sectors.”

The NAFTA will make it “virtuallyimpossible for Mexico, Canada or theUS to regulate exports of vital naturalresources.” (Greenpeace, 1993)


“NAFTA countries must provide theothers with the same access to itsnatural resources that it allows its owncitizens and domestic industry…regardless of domestic shortages… Bynarrowly defining ‘environment’ toexclude natural resource management,the side deals prevent the Commissionfrom ever considering poor ordestructive resources policies no matterhow harmful they may be to theenvironment.” (Hearing before theSenate Finance Committee, 1993:279)

6 . N A T U R A L R E S O U R C E I S S U E S


a. Acceleration of Fishery Exploitation inMexico due to Competitive Pressures

Claims



Under the NAFTA, the rate ofconsumption of “tradeable” naturalresources, including timber, fish, andminerals, could increase. Particularly inMexico, management practices are notin place to assure such intensificationwould be handled in anenvironmentally sustainable way.(National Wildlife Federation, 1990;National Wildlife Federation, 1991b)


The NAFTA will prevent the threeparties from using fishing restrictionsthus resulting in over fishing.(Greenpeace, 1993)

b. Acceleration of Forest Exploitation inMexico and Canada due to IncreasedForeign Investment and CompetitivePressures

Conservation and protection of wildfauna and flora and their habitats areexplicit elements of the mandate of theCEC. The CEC can developrecommendations for national andregional policies in these areas.

Claims



Under the NAFTA, the rate ofconsumption of “tradeable” naturalresources, including timber, fish, andminerals, could increase. Particularly inMexico, management practices are notin place to assure such intensificationwould be handled in anenvironmentally sustainable way.(National Wildlife Federation, 1990;National Wildlife Federation, 1991b)


With free trade, unsustainable logging islikely to accelerate. (Stokes, 1991:864)


Unsustainable timber harvesting in theSierra Madre may accelerate under theNAFTA. (National Wildlife Federation,1991b)

12/91 Position PaperNRDC, GC and INAINE

The draft NAFTA text “makes repeatedreference to ‘natural regeneration’ oftemperate forests throughout thecontinent. However, there is nomention of the documented problemsand public controversy surroundingtimber cutting in excess of sustainedyield, habitat destruction and loss ofbiological diversity, subsidized loggingon marginal lands in the US andCanada, the dominance of clearcuttingover alternative silvicultural methods,and other major forestry issues in allthree countries.” (NRDC and GC,1991:14)



Under the NAFTA, “US companiesmay buy huge areas of forested land [inMexico] to establish rapidly growingmonospecies plantations that willreduce biological and genetic diversity,reduce soil fertility and disrupt local andregional hydrological cycles. It is alsolikely that such large-scale commercialproduction systems will shorten cuttingcycles to unsustainable levels.”(Hearings before the Subcommittees onInternational Economic Policy andTrade, and on Western HemisphereAffairs, 1991:140)

“As more and more inexpensive andhigh quality US wood products enterthe Mexican market, the small andunder capitalized ejido producers willhave difficulty competing, due to theirhigh production costs… In order toremain competitive, these producergroups will have to lower productioncosts, through lower wages to theirmembers, and raise production, possiblyto ecologically unsound or unsustainablelevels.” (Hearings before theSubcommittees on InternationalEconomic Policy and Trade, and onWestern Hemisphere Affairs, 1991:140)


May 1992 Magazine ArticleNRDC

La Selva Lacandona is threatened bycolonization, illegal logging andpoaching as a result of economic shiftsin Mexico. (Ward and Prickett, 1992:2)


The NAFTA will prevent the threeparties from using raw log export bansand thus “deny state and national

governments a vital tool for achievingsustainable resource management goals.”(Greenpeace, 1993)

12/23/94 Wall Street JournalCraig Merrilees CTC

Free trade will endanger rainforests byspurring trade in natural resources andby outlawing environmental curbs astrade restraints. (Fighting “NAFTA”,1994:A1)

Counter-claims


“The increased economic growth [fromNAFTA] will give the Mexicangovernment more resources to deal withthe tenure and other institutionalarrangements that foster deforestation.”(Office of the USTR, 1992:221)


“It is anticipated that NAFTA couldslow the rate of deforestation somewhat,due to a general increase in wage ratesand an increase in alternative sources ofproductive employment. NAFTA mayincrease demand for services from publiclands, but otherwise its impact on themwill be negligible.” (Government of theUS, 1993:ES-10)

c. Acceleration of Mining Development inMexico due to Increased ForeignInvestment

Claims


Mining activities are likely to expandwith free trade, adding to existingenvironmental damage. (Stokes,1991:864)


This survey indicates that it is criticalto monitor macroeconomic issuesrelated to trade liberalization on anongoing basis, in order to identifytrade-induced environmental effects.The macroeconomic issues identifiedin this report represent the key pointsof intersection between the desiredeconomic benefits of trade liberal-ization and the feared environmentalconsequences of that trade. The reporthighlights three claims in particularthat might merit special notice. Thefirst, which attracted a great deal ofattention during the NAFTA debates,is the concern over industrial migra-tion to Mexico due to perceived lowerenvironmental regulation. The secondissue that attracted considerableattention is the claim that economicgrowth would result in greater resourc-es for enforcement of environmentallaws and regulations in Mexico. Agreat deal of attention also focussed ona third issue: the claim that greaterenvironmental problems would resultin the interior of Mexico as a result ofeconomic growth beyond the borderarea, due to the NAFTA-inspired tradeliberalization.

Legal/Compliance issues were also thesubject of a number of claims aboutprospective challenges to federal andsub-federal environmental standards,such as as non-tariff barriers to trade.Another major concern was the claimthat trade liberalization might result indownward pressure on environmentallaws as a means of attracting invest-ment.

Border issues, particularly increasedpollution and demands on scarce watersupplies, are clearly in the forefront ofpublic concern in North America,especially as they are affected byincreased traffic between the US and

Mexico. This survey suggests that airand water pollution, as well as thedisposal of solid and hazardous waste,are issues of great concern to NorthAmericans. Among the institutionalresponses to these claims was thecreation of the NADBank and theBECC, along with the CEC itself.

Claims regarding public health issuesfocussed on the border region and theconcern that accelerated industrial-ization on the Mexican-US border willintensify existing public health prob-lems in the region. A second publichealth issue highlighted during theNAFTA negotiations is the diff-erencein sanitary and phytosanitary standardsbetween the US, Mexico and Canada.

The two sectors that appear to haveattracted the most attention in thedebate leading up to the NAFTA —and which deserve priority attention— are the energy and the agriculturalsectors. Regarding energy, issues suchas the environmental implications ofthe use of natural gas, the expansion ofthe petrochemical sector, and thedevelopment of hydroelectric powerwere perceived to have the greatestpotential for environmental effects,both positive and negative. The issuesthat were raised most often in thissurvey surrounding the agriculturalsector concerned the system ofeconomic incentives and land use. Theissue of the positive effects of increasedaccess to environmental technologieswas also raised as a potential NAFTAeffect.

This report illustrates that the naturalresource issues that raised the mostconcern were fisheries, forestry andmining. Preoccupation over naturalresources revolved around theirincreased development and a resulting

Conclusions

35Conclusions

overexploitation of resources in allthree countries due to increasedforeign investment and competitivepressures.

The findings of this survey will assistthe CEC to identify those issues thatwere — or still are — of most concernto North Americans regardingeconomic integration and tradeliberalization as they affect theenvironment.


ACN Action Canada Network, Canada

AFL-CIO American Federation of Labour, USA

API Animal Protection Institute, USA

AS Americas Society, USA

ATI Arizona Toxics Information, USA

AWI Animal Welfare Institute

BEP Border Environmental Project, USA

CA Citizen Action

CARC Canadian Arctic Resources Committee, Canada

CCC Canadian Chamber of Commerce

CEJ Colectivo Ecologista Jalisco, Mexico

CELA Canadian Environmental Law Association, Canada

CEO Comunidad Ecologista de Occidente, Mexico

CIEL Center for International Environmental Law, USA

CIM Conservation International México

CNI Community Nutrition Institute, USA

CONIECO Consejo Nacional de Industriales Ecologístas (National Council ofIndustrial Environmentalists)

CRA Center for Rural Affairs, USA

CTC Citizen Trade Campaign, USA

CWA Clean Water Action, USA

DDF Departamento del Distrito Federal

DOW Defenders of Wildlife

EDF Environmental Defense Fund, USA

EE Enlace Ecologico, Mexico

EIA Environmental Investigation Agency, USA

EII Earth Island Institute, USA

ESI Environmental Solutions International, USA

Acronyms

37Acronyms

FET Foundation on Economic Trends

FFA The Fund for Animals, USA

FOE Friends of the Earth

FTC Fair Trade Campaign, USA

GC Grupo de los Cien, Mexico

GEM Grupo Ecologista de Mayab, Mexico

GI Greenpeace International

GM Greenpeace México

GU Greenpeace USA, USA

HS The Humane Society of the US, USA

HSI Humane Society International

IATP The Institute for Agriculture and Trade Policy, USA

IBEP Integrated Border Environmental Plan, USA/Mexico

IIE Institute for International Economics, USA

INAINE Instituto Nacional de Investigaciones Ecologistas, Mexico

INE Instituto Nacional de Ecología (National Ecology Institute)

INGAA Interstate Natural Gas Association of America, USA

IPPL International Primate Protection League, USA

MEI Manitoba Environmentalists, Inc., Canada

MEM Movimiento Ecologista Mexicano, Mexico

MMF Marine Mamal Fund

NBER National Bureau of Economic Research, USA

NCL National Consumer League, USA

NFFC National Family Farm Coalition, USA

NRDC Natural Resources Defense Council, USA

NTC National Toxics Campaign, USA

NWF National Wildlife Federation, USA

NYPIRG New York Public Interest Research Group, USA


PAA Pesticide Action Alert, USA

PAN Pesticide Action Network, USA

PAWS Performing Animal Welfare Society, USA

PC Public Citizen, USA

PEM Partido Ecologista Mexicano, Mexico

PFEA Proyecto Fronerizo de Educación

PGE Pacto de Grupos Ecologistas, Mexico

PIRG Public Interest Research Group

PP Pollution Probe, Canada

Profepa Procuraduría Federal de Protección al Ambiente(Attorney General’s Office for Environmental Protection)

RAAS Rawson Academy of Aquatic Science, Canada

RAN Rainforest Action Network, USA

RFSA Red Fronteriza de Salud y Ambiente (Border Health andEnvironment Network)

RMALC Red Mexicana de Acción Frente al Libre Comercio(Mexican Action Network Against Free Trade)

SAPA Society for Animal Protection Action

SC Sierra Club, USA

SCC Sierra Club of Canada, Canada

SCLDF Sierra Club Legal Defense Fund, USA and Canada

TCPS Texas Center for Policy Studies, USA

UMC United Methodist Church, USA

UQCN Union québécoise pour la conservation de la nature, Canada

USTR United States Trade Representative, USA

WCELA West Coast Environmental Law Association, Canada

WDCS Whale and Dolphin Conservation Society, USA

WRI World Resources Institute, USA

WWF World Wildlife Fund, USA

39Acronyms

“Agreement Between the Governmentof the United States of America andthe Government of the UnitedMexican States Concerning theEstablishment of a BorderEnvironment CooperationCommission and a North AmericanDevelopment Bank”, 32 I.L.M.1545, 1993.

Ampudia, Ricardo, “Mexico SeriousOver Clean Border Environment”,Houston Chronicle, MexicanConsulate, Houston, March 16,1992.

“Annual Symposium: The NorthAmerican Free Trade Agreement(NAFTA)”, The International Lawyer27/3 (Fall 1993): 589-770.

Baer, M. Delal and Sidney Weintraub,eds., The NAFTA Debate: Grapplingwith Unconventional Trade Issues,Boulder, CO: Lynne RiennerPublishers, 1994.

Behr, Peter, “Environmental IssuesEmerge As Key to Trade Pact onHill”, The Washington Post, March 3,1993.

Belous, Richard S. and JonathanLemco, eds., NAFTA as a Model ofDevelopment, La Jolla, CA: TheInstitute of the Americas, 1993.

Berlin, Kenneth, and Jeffrey Lang,“Memorandum to 12 USEnvironmental NGOs Re: NACELanguage”, April 21, 1993.

Berry, Wendell, “A Big Bad Idea”, inThe Case Against ‘Free Trade.’ SanFrancisco: Earth Island Press: 1993.

Blackwelder, Brent, Testimony beforethe Subcommittee on Energy andPower of the House Energy andCommerce Committee, September22, 1993.

Block, Greg M., “One Step Away FromEnvironmental Citizens Suits inMexico”, Instituto Tecnol andCommerce Committee, Septemberde Bremond, Ariane C., “TheHidden Costs of ‘Free’ Trade:Environmental and SocialConsequences of EconomicLiberalization in the Enterprise forthe Americas Initiative”, TheJournal of Environment andDevelopment, 2,1 (Winter 1993).

Canadian Chamber of Commerce,“Canadian Business, NAFTA andthe Environment: Challenges andOpportunities within a NorthAmerican Context”, March 1, 1994.

Canadian Environmental LawAssociation, “The EnvironmentalImplications of the NAFTAEnvironmental Side Agreement”October 1993.

Canadian NGOs’ press release, ‘GreensAcross Canada Say No to NAFTA,’and related letter to MinisterWilson from 80 Canadianenvironmental NGOs, May 5, 1993.

Cárdenas, Cuauhtémoc, paper deliveredto the “Voices of the Americas:Environment, Human Rights, andFreedom of Expression” Conference,University of Colorado at Boulder,September 8, 1992.

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Natural Resources Defense Council and14 other Environmental NGOs,“Environmental Safeguards for theNorth American Free TradeAgreement”, June 1992.

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The Nature Conservancy, letter fromTia Nelson and Catherine Scott to12 US environmental NGOrepresentatives, Re: Comments onNACE Memo of 4/21/93, April 23,1993.

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“North American Free TradeAgreement”, 32 I.L.M. 605 (1992).

Oñate, Santiago, “BilateralEnvironmental Programs in Dangerif NAFTA not Signed, Oñate, ElFinanciero,20, interview, November3, 1993.

Patterson, J.H., “Trade Liberalization,Agricultural Policy, and Wildlife:Reforming the Landscape”, inNAFTA and the Environment, editedby Terry L. Anderson (SanFrancisco: Pacific Research Institutefor Public Policy, 1993).

Pettis, Ronald E., “NAFTA: The SideAgreements and EnvironmentalBusiness Opportunities in Mexico”,undated.

Pollution Probe, letter from sixCanadian environmental NGOs toMinister Wilson, Re: NAFTA sideagreement, June 9, 1993.


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Purcell, Susan Kaufman, “What’s inNAFTA for US”, The WashingtonPost, A19, May 3, 1993.

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Reinhold, Robert, “Mexico Proclaimsan End to Sanctuary for Polluters”,New York Times, April 18, 1991.

Restrepo, Iván, “NAFTA’sEnvironment Commissions:Responsibilities and PossibleAttributions”, La Jornada, 1, July 12,1993.

Reyes Luján, Sergio, Press Release,Instituto Nacional de Ecología,Secretaría de Desarrollo Social,January 21, 1993.

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51Annex A — Chart of Claims About Potential Environmental Effects of NAFTA


















Documents

NAFTA EFFECTS POTENTIAL NAFTA E FFECTS CLAIMS AND … · vi Potential NAFTA Environmental Effects: Claims and Arguments — 96/04 A N O R T H A M E R I C A N A P P R O A C H T O E