Free Trade Area of the Americas - FTAA

Trade Negotiations

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May 27, 2003

Original: English



Name(s) Douglas Jake Caldwell
Program Manager
Trade and Environment
Country USA


May 1, 2003

Chair of the Committee of Government Representatives
on the Participation of Civil Society
Secretaria del Área de Libre Comercio de Las Américas (ALCA)
8 Oriente N° 1006
Paseo San Francisco
Centro Histórico, Puebla 72000

RE:     Committee of Government Representatives for the Participation of Civil Society’s (CGR) “Open Invitation
           to Civil Society in FTAA Participating Countries” (May 2003)

Dear Sir/Madam:

The National Wildlife Federation (NWF) is pleased to provide the following comments in response to the “Open Invitation to Civil Society in FTAA Participating Countries” (September 2000). We appreciate this important opportunity to present our comments on the critical relationship between trade and the environment in the FTAA. Our comments are substantially based on previous submissions to the CGR and we look forward to a constructive dialogue and meaningful response to the issues raised in our comments.

The National Wildlife Federation is the United States’ largest not-for-profit conservation education and advocacy organization with over 4 million members and supporters. NWF’s interest in trade and the environment is based, in part, on the premise that trade liberalization has the potential to contribute in a significant manner to improving the quality of life of all peoples as we collectively strive to build a sustainable future. At the same time, NWF recognizes that trade liberalization alone will not meet the ambitious goals of sustainable development. FTAA negotiations must strive to balance the demands of market liberalization with the need to address environmental concerns and the potential environmental impacts of increased market integration.

Trade and environment are inexorably linked. The FTAA partners and the members of the World Trade Organization (WTO) recognize the reality and the importance of the trade and environment linkage. The San Jose Fourth Ministerial Declaration (March 1998) states as a General Objective “To strive to make our trade liberalization and environmental policies mutually supportive, taking into account work undertaken by the WTO and other international organizations.”

In light of the discussions regarding trade and environment at the WTO and in other international fora, we must note with concern the significant lack of progress in addressing environmental issues within the FTAA process. The absence of a specific work agenda and lack of precisely defined role for the CGR within the FTAA process raises serious questions regarding the current and future impact of the CGR as an effective vehicle for public input in the FTAA negotiations.

Despite these significant reservations regarding the current CGR process, we proffer our comments as part of our effort to contribute to the advancement of a constructive agenda for sustainable trade and investment in the FTAA negotiations. We respectfully request that these comments be viewed as the beginning of an ongoing open process in which public input will be considered at later junctures and we look forward to discussing these issues and others in greater detail with all FTAA government officials as the negotiations progress. While we have attempted to identify key environment and trade areas that merit priority attention, the views expressed are not intended to be a comprehensive review of all our concerns and we anticipate providing further comments as this dynamic and flexible process evolves.


We believe that the FTAA negotiations have the potential to support a hemispheric integration process consistent with the vision articulated by the 1994 Miami Summit to link the advancement of human prosperity to three fundamental principles: social progress, economic prosperity, and a healthy environment. While we agree strongly with these goals, we remain concerned that the initial principles and negotiating objectives articulated in the San Jose Declaration fail to encourage the kind of trading relationship that promotes healthy economies and cleaner environments.

The Miami Declaration states:

Social progress and economic prosperity can be sustained only if our people live in a healthy environment and our ecosystems and natural resources are managed carefully and responsibly.... We will advance our social well-being and economic prosperity in ways that are fully cognizant of our impact on the environment.

Regrettably, to date, few concrete steps have been taken to ensure that environmental issues are addressed by the FTAA. In contrast, it appears that resistance to integrating trade and sustainable development in the FTAA has grown. For example, it is our understanding that a decision to consider creating a Study Group on Trade and the Environment (Cartagena Ministerial Declaration, Cartagena Colombia, March 21, 1996) was rejected at the Fourth Trade Ministerial (San Jose, Costa Rica, May 1998). In addition, specific opportunities for raising environmental concerns directly in negotiating sectors have yet to be identified. As a result, the only remaining official avenue for consideration of environmental implications in the FTAA appears to be the CGR.

A fundamental tenet of the FTAA negotiations is to turn “words into action.” In the interest of building essential broad-based public support for the FTAA negotiations, we urge the FTAA negotiators to take concrete actions towards assigning meaningful value to environmental concerns by fully integrating the following environmental protection goals in the FTAA negotiating agenda. Specifically, we seek immediate attention on efforts to:

ensure trade liberalization and environmental protection must go hand-in-hand; promote openness and accountability in trade negotiations; and, assist in the development of hemispheric cooperation and capacity-building for trade and environment as an integral component of the FTAA process.

II.     AN AGENDA FOR SUSTAINABLE TRADE AND INVESTMENT - Trade Liberalization and Environmental Protection
        Must Go Hand-in-Hand

The National Wildlife Federation has consistently advocated to improve the FTAA process, not to disparage it. We will strive to continue on that course, but we must begin to see immediate progress on the environmental dimensions of the FTAA.

We want the international trading system to succeed. We also want trade to fulfill its true potential. We want trade to deliver on its promise of improving our quality of life. We want trade to raise living standards, including respect for conservation values throughout the world.

To achieve this goal the National Wildlife Federation has established an agenda for environmentally responsible trade. The outlines of that agenda can be stated simply:

1. Improve FTAA Deference to National Environmental Standards and Multilateral Environmental Agreements (MEAs):

Trade rules must be crafted so they do not diminish the environmental protections that nations have provided for their citizens and resources. Each FTAA member country must retain the right to develop and enforce high conservation measures through trade measures C even if they exceed the international norm C without running afoul of FTAA rules.

The FTAA must allow for appropriate deference to national regulatory authorities in the development of high environmental standards that treat foreign and domestic producers alike -- even if they exceed relevant international standards. The North American Free Trade Agreement (NAFTA) made limited and certainly not complete progress in certain areas and we have referenced specific NAFTA language in relevant sectors. The FTAA will have to improve on NAFTA’s environmental components in order to earn public support. Specifically, in matters addressing Sanitary and Phytosanitary measures, Technical Barriers to Trade, and other FTAA negotiations:

<   the burden of proof should be explicitly placed on the challenging party in disputes involving health or environmental measures
     (See e.g., NAFTA, art. 723.6);

<   environmental standards higher than the international norm can be maintained as long as they have a scientific basis.
     “Scientific basis means a reason based on data or information derived using scientific methods” and not >scientific justification.’
     (See e.g., NAFTA art. 712.3). In the WTO context, the term “scientific justification” has allowed dispute settlement panels to
     sit in judgment of the quality of the science utilized by domestic regulatory authorities in risk management decisions.
     Environmental standards higher than the international norm should comport with the obligations of the FTAA as long as there is
     a rational relationship between a risk assessment and the restriction imposed by the regulation. “A Party may adopt, maintain or
     apply a . . . measure that is more stringent than the relevant international standard, guideline or recommendation.”
     ( See e.g., NAFTA, Art. 713(3));

<   Any harmonization of standards should not “reduc[e] the level of protection of human, animal, plant life or health.”
     (See e.g., NAFTA, Art. 713.1).

<   The parties should provide a procedure for citizen submissions and independent investigations relating to the environmental
     provisions of the FTAA, similar to that under Articles 14 and 15 of the North American Agreement on Environmental Cooperation
     (NAAEC) between Canada, Mexico, and the United States. Citizens should be able to make submissions regarding lack of
     enforcement of environmental laws, adequacy of environmental regulatory framework, and investor responsibility provisions of
     the FTA. The independence of the investigatory body should be clearly established, as should its authority to issue findings
     of fact, conclusions, and recommendations.

<   The FTAA should explicitly recognize the Precautionary Principle and allow FTAA countries to adopt environmental, health,
     and safety measures in instances where the scientific evidence is insufficient to determine the actual risk posed by a given
     product or service. (See, e.g., NAFTA, Art. 715.4, 907.3)

2. Allow Countries to Distinguish Between Products Based on the Way They Are Produced:

The FTAA should permit each party to make distinctions concerning market access based partially on the environmental impacts of production, as long as there is no clear and convincing violation of national treatment. Laws that address the environmental impact of how products are made (such as the U.S. import ban on shrimp harvested by trawl nets that kill endangered sea turtles), must be accepted as a valid part of trade rules. For example, trade rules should allow countries to label products or restrict the importation of products that are produced or brought to market in a way that harms endangered species and/or the global commons.

At a minimum, the FTAA should explicitly state that ecolabeling programs that take into account the environmental impact of production are permissible. Such a policy on ecolabeling would reflect the position that multilateral trade rules should provide sufficient flexibility to permit all forms of ecolabeling.

3. Make Environmental Impact Assessments Integral to Trade Negotiations:

Trade negotiators must look before they leap. The environmental ramifications of any trade agreement must be carefully evaluated before the agreement is concluded or put into effect.
The goal of the environmental assessments and their open public review-and-comment
process should be to provide accurate information on the environmental impact of the
proposed trade agreement and to suggest alternatives to mitigate the impact of trade on the environment.

A broad and comprehensive assessment of trade-related social and environmental effects, initiated well in advance of any future FTAA negotiations, is necessary to assess the positive and negative environmental implications of trade liberalization. We believe that the appropriate application of environmental assessments early on in the negotiations can help identify relevant impacts, establish preventive and mitigative measures, and proffer reasonable alternative actions. Environmental assessments could also strengthen public participation in FTAA negotiations by making the best use of NGO and other civil society inputs and experiences involving trade liberalization impacts in the Western Hemisphere.

Although many nationally-based and project specific EIAs traditionally undertaken in the hemisphere share similar features, in order to maximize the utility of EIAs to trade negotiators, FTAA partners should explore common experiences with EIAs to develop a set of shared EIA principles. Key elements of an effective environmental assessment for an FTAA should promote:

<    a new approach to trade negotiations, fully integrating environmental concerns in trade liberalization through an environmental
      review process initiated as early as possible in the “pre-negotiation” stage of trade negotiations.

<    environmental reviews of all major trade agreements, identifying environmentally preferable outcomes from trade liberalization,
      assessing global impacts, recommending corrective actions, and recognizing the need for specific capacity-building assistance
      in developing countries.

<    broader participation, including involvement of the public, legislatures, and executive branch agencies with environmental
      responsibilities, in the development of a more balanced hemispheric trade policy through a timely, open, transparent, and
      responsive environmental review process.

4. Eliminate Environmentally Perverse Subsidies and Promote Trade in Environmental Technologies: Renewed attention and energy must be devoted to delivering eminently achievable “win-win” solutions relating to trade and the environment. For example, the elimination of perverse and environmentally damaging subsidies in natural resource sectors such as fisheries and forest products may result in positive gains for both the environment and trade. Nonetheless, the timing and transition efforts must be carefully managed so as to avoid short-term dislocations. In addition, efforts should be made in the FTAA to facilitate the trade in environmental technologies. While not a cure-all to the resolution of all trade and environment conflicts, eliminating environmentally destructive subsidies and fostering trade in clean technology would represent a positive step forward.

5. Environmentally Responsible Investment Agreements: FTAA negotiators should develop specific policy guidelines regarding the relationship between investment negotiations and domestic environmental regulation. Future investment negotiations should, at minimum, pursue the following:

<    Seek mandatory, enforceable measures in the agreement to prohibit the lowering of environmental standards to attract
      investment and an active monitoring system to ensure compliance.
<    Undertake a review of the traditional “investor-to-state” principle found in numerous bilateral investment agreements with an
      emphasis on ensuring its compatibility with procedural openness, transparency and environmental protection efforts.
      Recently, in the NAFTA context, several private investors have attempted to use the investor-to-state provisions to challenge
     domestic regulations with detrimental consequences for local and national environmental laws. We urge FTAA negotiators to
     ensure that laws and regulations protecting the environment will not be eroded in new trade and investment agreements and the
     NAFTA parties should undertake efforts to reinterpret or renegotiate NAFTA to conform to this approach.
<   Investment negotiations should include obligations allowing legitimate measures designed to conserve the environment,
     natural resources and the promotion of cooperative environmental programs to be maintained and strengthened.


A significant step towards achieving a comprehensive trade and environment policy in FTAA negotiations is a recognition that the old, exclusive and secretive deal making process of trade negotiations must give way to an inclusive, transparent, and democratic process. The negotiating strategies pursued by the FTAA trading partners must reflect this new reality. At the beginning of the twentieth century, President Wilson denounced secret deals, secretly arrived at. It is past time to follow through with a process that takes fully into account the views of developing as well as developed countries and of citizens and citizen groups as well as those of industry and government officials from all countries. The era of international trade negotiations being insulated from public concerns, including respect for the environment, is over.

Institutions that govern public conduct must be accountable to the public. The FTAA must adopt modern, democratic principles of due process, including the right of the public to review and comment on the written record of future trade disputes, access to working documents and a permanent role for nongovernmental organizations in future FTAA activities.

NWF believes that public participation should be integral to any trade or investment negotiations. Such a linkage confirms the relationship between open markets and democratic principles, and provides citizens with the information they need to make sound and informed choices about policies that affect their future. Regrettably, and despite the clear mandates in the Miami and Bolivia Summit Plans of Action, and in the Belo Horizonte and San Jose Trade Ministerial Declarations strongly supporting the full integration of civil society in the decision-making process, few steps have been taken to date by the CGR or through any other mechanism in the FTAA. The time has come for FTAA countries to make public participation a cornerstone of the FTAA process.

Citizen participation is essential to the success of the FTAA. Citizen participation is necessary to the development of sound laws and policies because the trust of citizens in the FTAA negotiating process will only be gained when there is real consideration of views through processes that allow for active engagement. Citizen participation in the FTAA process will allow the FTAA negotiators to gather more complete information on issues and set priorities. Citizen participation in monitoring and enforcement efforts can complement efforts by governments because national, state and local governments, as well as regional bodies, do not have the financial or human resources to identify and prosecute all violations of law. Citizens can also serve a watchdog function assuring that the various branches of government properly and fully carry out their respective responsibilities.

In this regard, we note that the WTO is taking steps to establish a constructive relationship with civil society. Healthy discussions among stakeholders in trade policy development are essential if governments expect to secure the support of people for trade and investment negotiations.

As noted earlier, NWF has serious reservations regarding the FTAA public participation experience to date under the auspices of the CGR. We acknowledge that the CGR still has the potential to play a key role in defining the relationship between the Western Hemisphere trading system and the environment. Clearly, with our without a CGR, the challenge remains before the respective FTAA governments to establish the connection between sustainable development goals and the trade negotiations themselves.

Therefore, with an eye towards the reintegration of sustainable development priorities in trade agreements via the CGR and/or other mechanisms, we urge the FTAA negotiators to adopt and implement the following recommendations as essential components of the trade negotiations.

a. Designate Public Participation as a Specific Overall Trade Negotiation Objective

A general objective on public participation sends a strong signal to participating countries and to business interests that democratic decisionmaking is integral to good trade and investment policy. In order for the CGR process to earn the confidence of people in the hemisphere, it must give priority attention to social and environmental concerns as part of its primary agenda. In addition, the CGR must ensure that civil society comments are being properly balanced with those from business interests, and perhaps, most importantly, the CGR must establish a mechanism in the FTAA which adequately incorporates the views of civil society directly into the individual negotiating groups. The performance of this Committee should be given as high a priority as the Trade Negotiations Committee, the Committee on Small Economies and the individual Negotiating group sectors.

b. Provide a Specific Work Plan Designed to Overcome the Obstacles that Restrict Citizen Participation

While several members of the business community enjoy the financial resources, technical skills, and personal and professional relationships required to engage government officials in useful policy dialogue, citizen groups -- especially those working in emerging economy nations -- frequently do not possess such resources. To overcome these obstacles to effective participation, we have recommended in the past the creation of a work plan that includes (1) establishment of an information clearing house; (2) establishment of national advisory committees; (3) the promotion of research, training and capacity building; and (4) funding for civil society participation in the FTAA negotiations.

c. Define Information Disclosure Policies and Facilitate the Derestriction of Relevant Documents.

The results of the first round of negotiations in Miami made little concrete progress in promoting transparency in the FTAA negotiations. We again urge the FTAA negotiators to define information disclosure policies as a means to ensure public participation in the negotiations. Specifically, we believe the following “classes” or types of documents might be candidates for derestriction as an important first step in empowering civil society in a process to encourage “constructive” comments during FTAA negotiations:

<     Work plans and meeting schedules of the negotiating groups;
<     An outline of preliminary and official agendas of the CGR and the negotiating group meetings;
<    Working papers and draft texts of the negotiating groups, CGR and other committees;
<    Minutes, records of discussions or factual summary of the main elements stemming from the negotiating groups, TNC and
      Trade   Ministers’ meetings;
<    Countries’ position papers on topics addressed by the negotiating groups;
<    The annotated outline produced by the negotiating groups;
<    Formal reports of the negotiating groups, CGR and other committees to the trade discussion;
<    A time schedule of the next meetings of each of the FTAA negotiating groups, CGR and other committees;
<    Names and contact information of the national representatives involved with the CGR, committees and negotiating groups
      and contact information for the lead negotiators from each country in each of the negotiating groups.

We strongly urge you to release a document describing the information disclosure policies to be utilized under the FTAA and to consider developing it into a comprehensive public document which would also integrate public consultation guidelines.

d. Ensure that the CGR Addresses Environmental and Social Concerns as One of its Specific Agenda Items, and Establishes a Verifiable Avenue for Public Comments into the Activities of each FTAA Negotiating Group

As we have stated in the past, the establishment of the CGR as a forum to provide civil society with an opportunity to comment on the FTAA process is a step in the right direction. We acknowledge and appreciate the challenge the negotiators faced in the creation of the CGR and will continue to face in maintaining the Committee as a viable and meaningful public participation vehicle.

Nevertheless, in order for the CGR to successfully function as one of several potentially appropriate vehicles for ensuring that public participation and environmental protection are integrated into the context of trade negotiations, the CGR must adopt several important components into the core of its work program. These components include: 1) an opportunity for public dialogue including proactive efforts on behalf of the CGR to actively encourage public involvement in its activities; 2) the development of a comprehensive information disclosure policy and related communications policy; 3) providing creative funding mechanisms for citizen groups throughout the hemisphere which currently lack the financial and technical resources to engage fully in consultations; and, 4) clear and measurable operational procedures which indicate how civil society concerns will be addressed within the context of the negotiations.


We believe that the following recommendations represent a starting point to assist in the development of a comprehensive work plan to advance a Western Hemisphere agenda on trade and sustainable development.

  1. Capacity-Building: Governments in the Western Hemisphere need to enhance their capacities on trade and the environment.

X     Strong participation of environment ministries in the FTAA negotiations should be encouraged and
       should be on equal footing with trade ministries.
Countries in the Western Hemisphere should promote
       and coordinate regular meetings between trade and environment ministers and their technical advisors in the Hemisphere.
       As the interactions between trade and environment policy intensify, environment ministries must assume a larger
       role in the development of trade policy.

X    Governments should aim to develop concrete steps to enhance the capacity of national governments
      regarding environmental protection and the ability to have a constructive domestic dialogue and to create
      their own programs on trade and environment.
NWF has called for a systematic capacity-building program to
      include evaluation of needs, significant incentives and financial assistance, milestones, and reporting and evaluation
      of results, pursuant to a cooperative process involving nongovernmental organizations as well as foreign governments.

We also advocate a systematic effort to assess and improve international environmental performance. A plan to do so might include initiatives to achieve and report on results through diplomacy and through trade law remedies. But it should also include capacity building to improve enforcement and environmentally favorable technology transfer. What is needed is not retail help for the environment, but wholesale efforts, at least as systematic as what we do on trade barriers and on human rights.

To ensure there are better prepared negotiators for an FTAA which promotes ecologically sustainable trade, there should be at least one expert government representative in each country who has enough knowledge and understanding of the trade and environment linkage. If, this is not the case, we urge the Tripartite Committee to provide the necessary support to develop that technical capacity.

  1. Seek support from the Tripartite Committee to produce technical analysis on trade and environment linkages in the Western Hemisphere.

X        We urge the governments of the Western Hemisphere to seek support from the Tripartite Committee to produce
          technical analysis that aims to analyze country specific carrying capacities as a means to help develop strategies
          for growth and development in a sustainable way. Regrettably, there is a sense that many FTAA negotiators continue
          to view integration of the environment into trade negotiations exclusively in terms of obstacles to greater market
          access, and infringements on a country’s right to use their own resources. Further analysis might assist in expanding
          the scope of this view. Thus, studies should be undertaken to identify the degree and intensity of causal links between
          trade barriers and environmental degradation in specific sectors and for particular natural resources in countries in the
          Western Hemisphere. For example, Tripartite Committee studies should seek to identify and eliminate tariff escalation
          efforts which contribute significantly to poor sustainable management of natural resources in the Hemisphere.

X        As part of the technical cooperation in customs operations discussions, FTAA negotiators should seek to identify
          each country’s interagency cooperation mechanisms for linking environment and trade policy and current information-
          sharing mechanisms in detecting and recommending measures to correct noncompliance with international and national
          environmental regulations along borders. We recommend that negotiators discussing customs procedures identify
          training needs for customs officials in the Hemisphere to appropriately enforce international and national environmental
          regulations along the borders.

X        Convene regional dialogues between NGOs, government and business to talk about substantive issues that characterize
          trade and sustainable development. To date, political differences over environmental postures and development priorities
          have deterred the development of a trade and sustainable development agenda under the FTAA process.

The complexity and political sensitivity of many regional environmental problems call for solid transnational collaboration. More information is required, for example, to identify habitats and resources in need of protection, to assess the human and environmental impact of environmental threats, to identify environmentally sound policies, to adjudicate disputes over boundaries, on the environmental impacts of trade, and concerns over sovereignty, in the context of the Western Hemisphere.

X     Draw on lessons learned from examining the effectiveness of existing multinational institutions which have already started
       addressing the linkages between trade and the environment. We thus, urge the FTAA negotiators to examine the different
       approaches used by some of these institutions. While more analysis needs to be done on the different approaches used
       by the institutions such as the International Joint Commission, the Organization of American States and the North
       American Free Trade Agreement’s (NAFTA) environmental institutions in making, monitoring and enforcing international
       policies as well as in national capacity building, the FTAA negotiators would undoubtedly benefit from evaluating the
       results of these institutions and in addressing environmental concerns.

The hemispheric scope of the FTAA creates significant opportunities for parallel hemispheric environmental cooperation that should be pursued vigorously in tandem with the FTAA process. The increased market integration accompanying the FTAA negotiations creates an important opening to develop cooperative mechanisms to address the myriad environmental challenges of the hemisphere, many of which, such as biodiversity protection and forest management, have global implications.

* * *

Thank you for the opportunity to submit these comments and we look forward to working with you to incorporate these views into the FTAA process.


Respectfully submitted by,

/s/ D.J. Caldwell

Douglas Jake Caldwell
Program Manager
Trade and the Environment


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