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The Environmental Side Agreement to the North American Free Trade Agreement: Background and Analysis

December 1993

Citation: ELR 10720

Author: James P. Cargas and John J. Kim

Editors' Summary: NAFTA is one of the most comprehensive free trade agreements in history. Its negotiation coincided with a growing controversy about the relationship between trade and environmental policies. As a result, NAFTA contains unprecedented provisions to maintain and enhance health, safety, and environmental protection in nations that are party to the pact. In response to pressure for enhanced environmental protections, the United States, Mexico, and Canada (the Parties) negotiated the North American Agreement on Environmental Cooperation (the Environmental Side Agreement), which strikes a balance between the need to respect the rights of governments to exercise discretion in enforcing their laws and to provide a mechanism for addressing a Party's persistent pattern of failure to enforce its environmental laws.

In this Article, the authors identify the major issues that animate the debate about trade and the environment. The authors put NAFTA in context by describing the background of negotiations and the "fast track" statutory authority that governs the negotiation and approval process. Next, they summarize NAFTA's environmentally related provisions, including those governing technical standards, sanitary and phytosanitary measures, and dispute resolution procedures. The authors then examine the development of the Environmental Side Agreement, which includes provisions to enable Parties to challenge failures of other Parties to enforce environmental laws effectively. The authors review the Environmental Side Agreement's terms, including the commitments and obligations of the Parties, and provisions for the creation of new institutions to harmonize the Parties' environmental laws, foster environmental cooperation, document facts behind complaints of lax environmental enforcement, resolve disputes, and sanction noncompliance. The authors conclude that NAFTA and the Environmental Side Agreement demonstrate that trade and environmental concerns can be integrated in a mutually complementary manner.

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