AMERICAN
Sanchez
/ THEBEHAVIORAL
CONTEXT OFSCIENTIST
NAFTA
Governance, Trade, and the Environment
in the Context of NAFTA
ROBERTO A. SANCHEZ
University of California, Santa Cruz
The increasing importance of ideas and practices of free trade in the world economy requires
a better understanding of the role of trade in creating opportunities for development. This
study analyzes new forms of governance created in the context of the North American Free
Trade Agreement (NAFTA). It finds that environmental groups’ participation in NAFTA’s
implementation has declined while market actors have become increasingly empowered.
The study finds that 8 years after NAFTA’s passage there are generally diminished expectations that the agreement’s environmental provisions and institutional frameworks will help
control negative environmental consequences of increased trade between Canada, Mexico,
and the United States. This brings into question NAFTA’s reputation as a “green” trade
agreement. The narrow and technical interpretation of the NAFTA’s provisions has been oriented toward avoiding trade barriers rather than understanding and improving the complex
interactions between trade, the environment, and development.
Due to its environmental provisions, the North American Free Trade Agreement (NAFTA) has been praised as a “green” agreement. Those provisions are a
step forward from the minimal references to the environment contained in the
General Agreement on Tariffs and Trade (GATT). NAFTA’s environmental provisions emerged as a political compromise in response to demands from environmental nongovernmental organizations (ENGOs) and others. The success of
these groups created expectations that NAFTA would lead to development of
new forms of environmental governance in North America, balancing the power
and role of states and corporations in shaping economic growth. Eight years
after the implementation of NAFTA, it is worth asking if these new forms of governance have translated into better integration of trade and the environment and
if this integration opens equal opportunities for development among and within
the three NAFTA parties.1
This article examines the development of environmental provisions in
NAFTA and its environmental side agreement, the debate within NAFTA institutions between trade and the environment, the role of the North American Commission for Environmental Cooperation (NACEC), the role of ENGOs in
NAFTA’s implementation, and the issue of broader public participation under
the NAFTA framework. It finds that an imbalance in the new forms of
AMERICAN BEHAVIORAL SCIENTIST, Vol. 45 No. 9, May 2002 1369-1393
© 2002 Sage Publications
1369
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1370
AMERICAN BEHAVIORAL SCIENTIST
environmental governance favoring market actors has hindered a dynamic and
comprehensive interaction between trade and the environment in North America. Environmental issues have been addressed in technical exercises oriented
toward avoiding barriers to trade, facilitating cross-border movement of goods
and services, and promoting investment. So far, NAFTA is a missed opportunity
for the successful integration of trade into broader contexts and concerns of
development.
THE RISE OF EXPECTATIONS
Much of the intense debate around NAFTA has focused on its environmental
implications. Fearing that NAFTA would detrimentally affect the environment
in the three countries, environmental groups demanded the inclusion of environmental provisions in the negotiations and drafting of NAFTA. Major national
environmental groups played a significant role exerting political pressure on the
trade representatives of the three countries, particularly in the United States
where NAFTA faced a congressional deadline under the “fast-track” ratification
process. NAFTA’s drafters had to negotiate between including environmental
provisions, respecting state sovereignty, and limiting standards and other technical barriers that could be used for protectionist ends.
NAFTA’S ENVIRONMENTAL PROVISIONS
NAFTA’s text2 includes the following environmental provisions.
Preamble and Chapter 1. NAFTA’s preamble provides that the agreement
should be implemented in a manner consistent with environmental protection
and the promotion of sustainable development. These two issues are excluded
from objectives stated in the body of the agreement (see Article 102), however.3
Article 104 specifies that obligations under certain international environmental
and conservation agreements prevail over NAFTA.4 Future international environmental agreements also may be included in this override clause.
Chapter 7. Chapter 7 focuses on sanitary and phytosanitary measures, adopted
and applied to protect animals and plants from pests or disease and consumers
from risks due to additives, contaminants, or organisms in foods and beverages.
Articles 712(1) and 712(2) purport to provide each party5 with the right to establish its own level of protection of human, animal, or plant life or health as it
deems appropriate even if such levels are more stringent than international standards. However, establishing any sanitary or phytosanitary measure as a level
higher than an international norm would be arduous. Article 715(1) requires a
number of considerations to a party conducting a risk assessment (scientific evidence, process and production methods, inspection methods, and relevant
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1371
diseases or pests and treatments). Parties must also consider alternative
approaches, the need to minimize negative trade effects, and the desirability of
consistency (Jeffery, 1996).
Chapter 9. Under Chapter 9, the setting of standards-related measures at levels exceeding international norms is less rigorous than for sanitary or
phytosanitary measures. Article 904(2) permits each party, in pursuit of “legitimate objectives,” to establish the level of protection it considers appropriate.
Legitimate objectives are defined as safety; the protection of human, animal, and
plant life; health; the environment; consumers; and sustainable development.
The parties are still required to avoid arbitrary or unjustifiable discrimination
against goods and services of another party and disguised restrictions on trade.
Proof that the level of protection is adequate and a risk assessment are not
required (Jeffery, 1996). Chapter 9 also limits the extent to which member countries may enact environmental standards with trade-restricting effects.
Chapter 11. Chapter 11 deals with investment. Article 1114 states that “it is
inappropriate to encourage investment by relaxing domestic health, safety or
environmental measures.” The language is not mandatory, however. Chapter 11
also provides rules for the resolution of investor-state disputes through arbitral
panels. Companies and individuals from NAFTA countries who are investors in
other NAFTA countries can initiate claims against the governments of the host
countries if they believe their rights have been breached under Chapter 11
(Rugman, Kirton, & Soloway, 1999). This mechanism was sought by the United
States and Canada to protect their investors in Mexico, which accepted it to
increase the flow of foreign direct investments. Chapter 11 contains the most
extensive set of rights and remedies ever provided to foreign investors in an
international agreement (Mann & Von Moltke, 1999).
THE ENVIRONMENTAL SIDE AGREEMENT
NAFTA’s environmental provisions failed to withstand public scrutiny, however, leading to the creation of the North American Agreement on Environmental Cooperation (NAAEC), NAFTA’s “environmental side agreement.” The
agreement’s preamble strives to balance environmental protection goals with
state sovereignty and the realities of trade liberalization. Article 1 of the side
agreement emphasizes the need for cooperation on and promotion of environmental protection goals. Article 2 commits to the preparation and publication of
reports on the state of the environment, promotion of environmental education,
and use of economic instruments to achieve environmental goals. Article 3 provides each party with the right to establish its own level of environmental protection and priorities. Article 5 lists specific actions to be taken by the parties to
enhance and enforce domestic environmental laws and regulations within their
respective territories. Article 6 provides interested persons with the right to
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1372
AMERICAN BEHAVIORAL SCIENTIST
request the party’s competent authority (e.g., the U.S. Environmental Protection
Agency [EPA]) to investigate alleged violations.
The NAAEC also creates the tripartite NACEC, comprised of a council, secretariat, and joint public advisory committee (JPAC). The NACEC is empowered to assist NAFTA’s dispute resolution panels on environmental disputes and
to develop recommendations regarding environmental matters. The NACEC
council is mandated to assist NAFTA’s Free Trade Commission6 in preventing
and resolving environment-related trade disputes (Article 10). The NACEC also
has the mandate to assess NAFTA’s environmental effects and assist NAFTA’s
Free Trade Commission on environment-related matters.
Articles 13, 14, and 15 are a central part of the expectation for greater environmental governance in North America. Article 13 entitles the NACEC secretariat to prepare reports on any matter within the scope of the cooperative functions of the agreement. This Article is relevant to the debated semiautonomy of
the secretariat to carry out independent research on relevant environmental
issues. These reports are to be publicly available unless the NACEC council
decides otherwise. Article 14 addresses the submission on enforcement matters.
The NACEC secretariat may consider a submission from any nongovernmental
organization or person asserting that a party is failing to effectively enforce its
environmental law. If that submission meets the criteria set out by the side agreement, the secretariat will request a response from the party. Under Article 15, the
secretariat considers if the submission warrants developing a factual record in
light of the response provided by the party. The council may by a two thirds vote
make the final factual record publicly available.
Sanctions and remedies may be taken into consideration in cases where a
party is alleged to have persistently failed to effectively enforce its domestic
environmental laws over economic activity involved in or affecting North American trade. The NACEC council can establish an international arbitrary panel to
report, provide a remedial action plan, and levy monetary fines (Articles 24 and
34).7 In the event that such fines are not paid, the agreement gives the United
States the ultimate power to impose trade sanctions on Mexico, and vice versa,
in the event of persistent pattern of domestic noncompliance and enforcement
(Article 36B). Canada succeeded in avoiding such a threat by allowing its international compliance obligations to be enforced through its domestic judicial
process (Article 36A).
THE TRADE AND ENVIRONMENT DEBATE
To date, the trade and the environment debate has been presented in rather
simplistic terms, particularly within the context of trade relations between
developed and developing countries. On one side, the conventional economic
position advocates the benefits of free trade. From this perspective, free trade
will bring economic growth and higher per capita income to developing
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1373
countries while generating the resources to invest in pollution control and reduction. As living standards improve, citizens will be exposed to ideas and values
from industrialized countries, resulting in their increased knowledge of environmental degradation. This in turn will lead to stricter environmental regulations
and ultimately greater protection of the environment. Those opposing NAFTA
consider trade liberalization to be a serious threat to environmental quality
through relocation of dirty industries and weakened enforcement of environmental policies. Both perspectives fail to take into account the complex interactions between the actors, interests, and processes involved in the trade and environment debate. NAFTA’s passage and implementation provide an invaluable
opportunity to study such interactions.
INTERACTIONS AND MISSED OPPORTUNITIES
Trade and environment interactions have been the focus of substantial attention during the past decade. However, little progress has been made in understanding the nature of these interactions and transforming them into policies oriented to control their negative consequences. Central to the analysis of these
interactions is an integrated perspective incorporating the conflict of interests
between the trade community and other sectors of society seeking social and
environmental well-being (Ford, 1999; Hogenboom, 1998; Rugman et al.,
1999). The trade community is understood here as including business groups
associated with transnational corporations, professional organizations (economists, accountants, engineers, etc.), and powerful public sector groups (the trade
agencies and other economic sectors of the federal governments of Canada, the
United States, and Mexico) promoting and defending free trade. Conflicts have
been mediated by the states, with results differing in the context of the European
Union (EU), World Trade Organization (WTO), and NAFTA, respectively. The
EU’s trade-environment rules are more well developed than initial steps taken
by the WTO and NAFTA, where such rules are in an embryonic state (Steinberg,
1995).
This issue was brought to the center of public attention by the long debate on
trade and the environment prior to the U.S. Congress’s approval of NAFTA. The
creation of NAFTA’s environmental side agreement and the NACEC led to
expectations that the NACEC would become a key interface between the environmental and trade communities. Eight years after the implementation of
NAFTA, it is clear that opportunities to learn about the interaction between trade
and the environment have been wasted. Several factors are behind these lost
opportunities, including the trade community’s opposition to considering its
interactions with the environment (particularly when some of the negative consequences of those interactions can be exposed)8 and federal environmental
agencies’ reluctance to provide the political and economic support needed to
allow the NACEC to fulfill its potential.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1374
AMERICAN BEHAVIORAL SCIENTIST
COMMISSIONS, COMMITTEES, AND WORKING GROUPS
The relationship between the NACEC and NAFTA’s Free Trade Commission
is central to interaction between trade and environment under the agreement.
The two commissions have not met in 8 years despite the environmental responsibilities of the trade community embedded in NAFTA and economic elements
contained in the environmental side agreement.
The lack of dialogue between these two commissions is a manifestation of
the opposition of the trade community to allowing environmental issues to affect
enforcement of free trade. Behind the rhetoric for environmental protection in
public discourse, there is a strong conviction within the trade community that the
function of NAFTA institutions is to implement NAFTA as a commercial agreement. Environmental concerns in NAFTA bodies are limited to identifying
which issues are being used as barriers to trade.9
This antienvironmental conviction is illustrated as well in the lack of communication between the NACEC and other NAFTA committees and working
groups with environmental relevance, including the Committee on Sanitary and
Phytosanitary Standards, the Committee on Agricultural Trade, and the Committee on Standards-Related Measures. These committees have done little to
develop the environmental dimension of their work. So far, there have been only
some small achievements by the Working Group on the Transportation of Dangerous Goods (created by the Committee on Standards-Related Measures) and
the Working Group on Pesticides (created by the Committee on Sanitary and
Phytosanitary Standards) (Kirton & Fernandez de Castro, 1997).10
THE COMMISSION FOR ENVIRONMENTAL COOPERATION
The trade community’s opposition to any consideration of environmental and
labor issues under NAFTA was clear from the beginning. Any addressing of
interactions between trade and the environment thus depended on the strength of
the three governments’ support for the NACEC, together with dynamic participation and political pressure from stakeholders demanding the study of such
interactions. This article will address issues of environmental governance and
stakeholders’ participation after first examining the NACEC’s role.
THE COMMISSION’S ACCOMPLISHMENTS
Has the NACEC met expectations of assessing trade-environmental interactions, enhancing environmental cooperation, and defending enforcement of
domestic environmental laws? Some scholars are positive in their review of the
NACEC, considering it a major move toward regional governance (Munton &
Kirton, 1994) or an institution with great potential for environment cooperation
in North America (Audley, 1997; P. M. Johnson & Beaulieu, 1996; Rugman
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1375
et al., 1999). But critics point out the NACEC’s weak position to make a significant contribution to environmental protection due to its dependence on the will
of the three governments to support it (Mumme & Duncan, 1996) or the limited
provisions of the environmental side agreement that do not provide the NACEC
with independent authority to bring enforcement actions (Kibel, 2000; Schiller,
1997; Wallach & Naiman, 1998). Some of the NACEC’s stakeholders (i.e.,
mainstream ENGOs Public Citizen, Sierra Club, Red Mexicana de Acción
Frente al Libre Comercio, and Friends of the Earth) remain critical about the
NACEC’s lack of strength to deal with the environmental implications of trade
liberalization.
The NACEC has partially met the expectations mentioned earlier. In recent
years, through its secretariat the NACEC has been promoting environmental
cooperation in North America. It has been able to convene a diversity of stakeholders (environmental groups, grassroots organizations, local and state governments, scholars, industry, and federal agencies) around important topics. Particularly successful have been efforts to address conservation issues (birds,
butterflies, coastal areas, and biodiversity). The NACEC secretariat has helped
the three federal governments create regional forums to discuss relevant environmental issues. Part of this success is due to the fact that the three governments
feel comfortable with this role of the secretariat.
The NACEC has had some success also on pollution issues such as chemical
management, continental pathways of air pollution, development of a pollution
release, and transfer register and transboundary environmental impact assessment. But this is an area where the three governments are in greater disagreement, and the work of the NACEC secretariat is more difficult and less far reaching. Despite these difficulties, these programs are helping the NACEC find a
niche as a regional agency and as a catalyst in the development of initiatives for
regional cooperation. They also illustrate the NACEC’s potential to become a
player in addressing the interactions between trade and the environment.
The NACEC has in fact reoriented its projects in this direction since 1997.
Recent programs such as the North America Agenda for Action 1999-2001
(NACEC, 1999) and the 2001-2003 Proposed Program Plan and Budget
(NACEC, 2000) include projects exploring linkages between trade and
biodiversity conservation in green goods and services (shade-grown coffee and
sustainable tourism). The NACEC’s Environment, Economy and Trade Program includes new projects studying critical and emerging environmental trends
in North America, market and financial mechanisms in support of the environment, and assessment of environment and trade relationships.
This last project seeks to contribute to an understanding of trade and environment interactions through development of case studies. Its analytical framework
needs to be improved, however—it is too general in its present form. Concrete
references need to be made to social, economic, and political processes generated by trade and environment interactions and their manifestation in geographical space. The project also runs the risk of becoming too embedded in analysis
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1376
AMERICAN BEHAVIORAL SCIENTIST
of macroeconomic variables, an approach followed by other international organizations such as the Organization for Economic Cooperation and Development
(OECD), World Bank, and WTO. Although there is a need for this type of analysis, the NACEC needs to balance its approach and also include social issues in its
analysis of trade and environment relationships to impact a larger number and
greater diversity of stakeholders.
PROBLEMS FACING THE COMMISSION
It is not easy to be optimistic about NACEC’s role in addressing trade and
environment relationships. The NACEC has been subject to pressure by the
trade community, including those sectors of federal governments promoting
free trade, when the latter have perceived that negative effects of trade on the
environment could be exposed. For example, Mexico’s trade minister opposed
the study of NAFTA’s environmental effects on maize production in Mexico,
creating a long debate and conflict inside NACEC, with study proponents ultimately conceding. The trade community remains keen to avoid any interference
with NAFTA’s operation as well as any attempt to bring to light negative consequences of trade liberalization. Mexico’s trade minister regularly follows up on
NACEC’s activities in this area.
There is also the question of the NACEC council’s commitment and capacity
to address negative aspects of the trade and environment interactions. Such commitment depends on council members’ leverage within their own governments
and with the trade community.
The NACEC has exhibited poorer performance in other areas. The NACEC’s
actions promoting cooperation on environmental standards and enforcement
and pollution prevention have had limited results. Two factors help explain this
outcome. First, there is the argument of the defense of sovereignty,11 used by the
three federal governments to justify their opposition to promoting the NACEC
as a supranational environmental agency.12 As a result, the three governments
approve actions and projects containing few compromises and minimal exposure of domestic limitations. Second, the governments have had difficulties
developing successful programs in areas such as enforcement and pollution prevention even at home.13
The NACEC is hindered as well by differences in the council between the
three governments and between the council and secretariat.
Differences in the NACEC Council
Differences in the council especially reflect the gap between Mexico and its
two more developed trade partners. Ideas and expectations about the role and
limitations of the NACEC are reflective of the respective pressures on each government. The U.S. government sees the NACEC as part of its compromise with
domestic environmental groups to gain congressional approval of NAFTA.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1377
Mexico and Canada did not face the same domestic pressures; for them, the
NACEC is part of the cost of NAFTA.
There are also significant differences in terms of the position and strength of
the environmental agencies within the three federal governments. In Canada, the
provinces enforce environmental protection, and the national environmental
agency, Environment Canada, has a more limited mandate than its counterparts
in Mexico and the United States.14 In the United States, the EPA focuses primarily on the brown agenda, whereas natural resources are managed by the Department of the Interior; Canada and Mexico maintain a comprehensive approach (a
brown and green agenda) at the ministerial level.
Finally, the inequalities in financial resources between the three countries are
another important difference. The already huge gaps in available resources have
been aggravated in recent years by budget cuts in Environment Canada and
Mexico’s SEMARNAT.15 The financial cost of NACEC’s operation is an ongoing concern for Mexico. NACEC’s $9 million16 annual budget is provided in
equal shares by the three parties. Mexico’s $3 million share represents a large
percentage of its annual budget for environmental protection. This explains
Mexico’s position of trying to obtain as much as possible in return for its
contribution.
Although through time the parties have learned to control some differences,
divergences between the parties remain an obstacle in negotiating a common
agenda; establishing project content, scope, and approach; and determining the
future of the NACEC.
Differences Between the Council and Secretariat
The NACEC is constrained also by internal differences between its council
and secretariat due to limitations in the design of these bodies. The NACEC was
created in response to environmental groups’ demands for an independent institution capable of monitoring the implementation of NAFTA and compliance
with environmental protection in North America. However, given the three governments’ opposition to the creation of a supranational environmental organization, the secretariat was provided with only limited independence to carry out its
mandate: to investigate environmental problems (Article 13), receive and investigate submissions on enforcement matters (Article 14), and carry out a factual
record (Article 15). This mandate is one of the NACEC’s most important features and a major source of conflict. Representatives of the three governments
serving as NACEC council members are judge and interested/affected parties at
the same time, creating a conflict of interest in the submission process and generating tensions between the secretariat and council members.17
The tensions between NACEC’s council and secretariat have also affected
the development of other parts of NACEC’s program. Differences over Articles
14 and 15 led the parties, particularly Mexico and Canada, to seek broader control of the submission process.18 The council finally approved these modifica-
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1378
AMERICAN BEHAVIORAL SCIENTIST
tions after a series of closed meetings. In June 1999, the council adopted revisions to the guidelines, including a requirement that the secretariat recommend
whether a factual record should be kept confidential until the council has
reached a decision on a particular topic. The secretariat must delay making such
a decision public until 30 days after the council has been notified. These revised
guidelines were met with strong opposition from stakeholders, including some
of the mainstream environmental groups in the United States that had stopped
following the operation of the NACEC. The opposition forced the council to
reconsider its decision and instructed JPAC to carry out a series of public consultations to redefine the scope and depth of Articles 14 and 15.19
Another source of tension in the NACEC’s operation is the reluctance, and on
occasion fierce opposition, of the parties to publishing data and information
exposing domestic problems and deficiencies or revealing issues perceived as
politically controversial. This situation limits the scope and potential of the secretariat to provide relevant and timely information about important environmental issues in North America. In other cases, it creates excessive delays in the publication of some reports and limits the outreach of the NACEC.
NACEC’s Future
There are still many uncertainties in the future of the NACEC, particularly if
it will be able to overcome the differences and tensions mentioned earlier. An
independent review suggested a series of recommendations to improve the relationship between the NACEC council and secretariat (Independent Review
Committee, 1998), including creation of a 3-year program to reduce micromanagement by the secretariat and a sustained effort to reach out to a larger
number of groups in North America to create a broader presence in the region.
The first of these recommendations has been implemented but only partially:
The NACEC now has its 2001-2003 Proposed Plan and Budget (NACEC,
2000); however, this is really only a 1-year plan, with minimal reference to 2002
and 2003. The second recommendation has not been followed up on either: The
projects listed in the aforementioned plan are not linked to the public, very few
identify their audience and incorporate them as participants in the projects, and
public participation is limited to rhetoric used in project descriptions.
Reducing tensions between the NACEC council and secretariat depends on
the will of the parties to accept the limited independence of the secretariat. The
ability and capacity of the secretariat to build broader support from stakeholders
in the three countries is critical. The secretariat cannot depend solely on support
from mainstream ENGOs. Reaching out to other stakeholders is critical for the
NACEC to achieve a broader presence in North America. The NACEC and its
secretariat would benefit from more dynamic public participation in design and
implementation of its projects and activities.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1379
THE JOINT PUBLIC ADVISORY COMMITTEE
The JPAC has helped NACEC achieve a certain level of public consultation.20
JPAC members represent different sectors of the public in each of the three countries. Each government nominates five JPAC members. JPAC’s main mission is
to contribute public input to the NACEC council and secretariat. This is not an
easy task, however. The public represents very diverse and often conflicting
interests (industry and other private sector groups, grassroots organizations,
ENGOs, academia, and individuals). The translation of these inputs into useful
advice for the NACEC depends on the interpretation of JPAC’s members. Thus,
it is important that these members have legitimacy with broad sectors of the public. A review of JPAC’s operation during the past years shows signs for concern.
JPAC’s Representativeness
There is first the issue of representation. JPAC’s Mexican and Canadian
members are selected by their respective environmental ministers; its U.S.
members are presidential appointees. The lack of transparency in the selection
of JPAC members casts doubts about their representation of the public interest.
Some parties nominate people they feel comfortable with rather than those who
can provide the best advice for broad sectors of the public. For example, several
members of JPAC representing Mexico come from a small group of individuals
that serve or have served in other public committees advising Mexico’s environmental agency. And the United States recently nominated an individual who
until 2 years ago was an environmental official overseeing NACEC’s micromanagement. The question of JPAC’s representativeness is raised also by the
lengthy terms of some members. Although Canada sets a 3-year term for JPAC
members, the term of service for Mexican and U.S. members is not limited. U.S.
members tend to serve for long periods: Two of five have served since JPAC was
established in 1994; one has served since 1996.
Public Attendance
The attendance of the public at JPAC’s meetings is also a point of concern.
JPAC’s records show that by October 2000, it had met 26 times, with participation by 1,071 observers. The data show a progressive increase in the number of
observers from as low as 4 or 5 in some of the early meetings (1994 and 1995) to
156 in June 2000. A closer review of JPAC’s records conducted by the author
reveals further details. A classification of the observers in five categories
(NGOs, academia, government officials, private sector, and individuals) shows
that the largest attendance in JPAC meetings (31.2%) has been from public officials (mostly from the three countries’ national environmental agencies). The
second largest participation in JPAC has been from NGOs (30.6%), followed by
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1380
AMERICAN BEHAVIORAL SCIENTIST
representatives from the private sector (18.1%), academia (10.6%), and individuals (9.5%).
The NACEC secretariat has made considerable efforts to financially support
the participation of ENGOs and grassroots organizations in JPAC’s meetings.
That support, together with the rotation of the meetings in different cities of the
three countries, has facilitated the participation of these groups. Nevertheless, it
is interesting to note that the attendance of public officials to JPAC meetings has
been significant and consistent since the first meetings. The actual number of
public participants in those meetings declines 31% when public officials are not
counted as part of the public.
JPAC is not reaching big parts of the North American public. Its members
have conducted minimal outreach in their respective countries to obtain feedback from a large number and diversity of stakeholders. It is not clear how JPAC
translates and prioritizes the comments, positions, and requests presented in
public meetings (or written comments it has received) into advice to the NACEC
council. Neither is it clear to what extent the NACEC council takes JPAC’s
advice into consideration. JPAC’s role has yet to be analyzed in depth. Its operation must be improved to achieve broader public representation and useful public impacts on NACEC decision making.
NEW FORMS OF ENVIRONMENTAL GOVERNANCE
There is a growing assumption that emerging forms of global governance
break down the traditional dominance of the nation-state. Some scholars suggest
that the role of NGOs is central in these dynamics. NGOs both fulfill traditional
functions of lobbying states to develop new policies and also increasingly play a
direct role in governing various social practices in relation to environmental
impacts (Lipschutz, 1997; Wapner, 1996). Other scholars consider that economic forces associated with globalization dominate global governance, however. For Karliner (1997), the new patterns of global governance consist of a
coalition of state and corporate actors. Paterson (1999) suggested that commonalties between the interests of states, transnational corporations, and international agencies collectively make up a governance mechanism working toward
continued globally organized capital accumulation. By the same token, Sklair
(1995) talked about the emergence of a “transnational capitalist class” as the
political dimension in the locus of transnational processes.21 Gandy (1999)
stated that current processes of international political and economic change
involve a complex reconfiguration of state power within new institutional constellations beyond the simple national-global duality: “Globalization involves
the creation of new geographies of regulation and liberalization within which
new forms of institutional innovation and market discipline are emerging”
(p. 64). The emerging patterns of governance under NAFTA take place within
the context of such new geographies in North America.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1381
ENGO INVOLVEMENT
NAFTA is an interesting case study because it shows that the new dynamics
of global governance manifest differently at different times. ENGOs’ early success in shaping the NAFTA negotiations has been highlighted as evidence of
their impact on governance (Audley, 1997; Benton, 1996; Hogenboom, 1998).
The environment became a major issue in trade negotiations for the first time
during the NAFTA debate. Until then, the trade community had been successful
in maintaining trade as a matter separate from social and environmental considerations (the General Agreement on Tariffs and Trade had no real environmental
provisions). Prior to NAFTA, ENGOs in the United States did not play much of a
role in trade policy making (Esty, 1993). Benton (1996) pointed out that
ENGOs’ involvement in trade negotiations under NAFTA was due to the new
dimension of environmental problems that led to increased activism and growing concern for the environment at the international level. NGOs began to pay
attention to the way environmental and other regulations were introduced into a
liberalized global economy (Finger & Tamlotti, 1999).
In the case of NAFTA, ENGOs’ involvement led to the inclusion of environmental provisions in the text of the trade agreement, the creation of the environmental side agreement, and the formation of NAFTA’s environmental bodies.22
The ENGOs’ political strength offset the opposition of the trade community to
open the discussion of NAFTA to environmental issues. Many of the ENGOs’
demands were not met; others were met only partially. Nevertheless, ENGOs’
involvement in the NAFTA process opened up opportunities for addressing
trade and environment interactions and establishing new forms of environmental governance in North America.
ENGOs’ role in the early stages of NAFTA created expectations for an even
bigger role in governance during the implementation of the agreement. However, these expectations have not been met. Recent interviews by this author23
show that most major U.S. and Mexican ENGOs have lost interest in trade and
environment interactions under NAFTA. Some consider NAFTA a partial loss;
others see it as a partial victory. All have reduced or stopped their involvement in
the implementation of the main and side NAFTA agreements, however. In fact,
environmental issues related to NAFTA have disappeared or remain only a minimal part of the agenda of many major environmental groups in the United States,
Canada, and Mexico. During the interviews, several groups argued the lack of
resources to keep track of NAFTA as the major reason for their declining interest
and participation on this issue. This is an insufficient explanation, however:
ENGOs’ declining role in NAFTA’s implementation has made environmental
governance in North America increasingly dependent on the NACEC. These
issues are discussed further in the following.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1382
AMERICAN BEHAVIORAL SCIENTIST
THE EMPOWERMENT OF MARKET ACTORS
In contrast to ENGOs’ declining role in implementing NAFTA, the trade
community has strengthened its position of allowing the three governments and
NAFTA institutions to minimally interpret the main and side agreements’ environmental provisions. The debate on trade and environment interactions has
been reduced to technical issues far from policy considerations. Morales (1999)
pointed out that NAFTA’s regime empowered market actors and institutional
actors (i.e., panels and NAFTA-based institutions) vis-à-vis government
bureaucracies. The empowerment of market actors is supported by NAFTA’s
dispute settlement mechanism oriented to protect the rights and interests of private actors against discriminatory or unjustified policies that could impair the
agreement. Morales correctly pointed out that at the core of NAFTA is a commitment by the three governments to benefit market actors: “In the case of NAFTA,
it is clear that the core of the rules and norms around which state actors have
made a compromise is to the benefit of market actors, mainly firms and transnational companies” (p. 40). In Mexico, for example, a coalition of state and business elites has consolidated in support of free trade since the NAFTA negotiations. These coalitions included large Mexican firms as well as subsidiaries of
multinational corporations (Tracker, 1999).
Clearly, market actors have significantly more weight than environmental
actors in governance under NAFTA. The empowerment of market actors is particularly strong in the case of Chapter 11 arbitral provisions. Chapter 11 of
NAFTA provides rules for the resolution of investor-state disputes through arbitral panels. Companies or individuals from a NAFTA country who are investors
in another NAFTA country can initiate a claim against the government of the
host country if they believe that their rights under specific provisions of Chapter
11 have been breached without having to go through their own governments.25
No other dispute resolution mechanism within NAFTA empowers market actors
as this one does. Chapter 11 allows foreign investors to sidestep public interest
safeguards found in the judicial processes of developed and developing countries. It favors a nontransparent, secretive, and nonappealable system of arbitration (Mann & Von Moltke, 1999).26
In many ways, Chapter 11 was introduced to include the minimal standards
required by the U.S. government of states receiving direct foreign investments
from U.S.-based firms but which Mexico had refused to accept (Morales, 1999).
The Mexican Constitution still inserts a Calvo clause under its Chapter 27,
requiring foreign investors to be treated as nationals and to settle disputes with
the Mexican government in Mexican courts (Manning-Cabrol, 1995). Chapter
11 has been a challenge to Mexico’s state-centered law paradigm regarding the
treatment of foreign investments. Under Chapter 11, Mexico has agreed to
accept foreign arbitration in conflicts arising with foreign firms; this could substitute for national tribunals, including in cases of expropriation (Morales,
1999).
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1383
Several recent cases show that Chapter 11 is unprecedented in its reach into
critical areas of public policy making. Four cases are described here: three
related to the Mexican government and one to both Canadian and U.S. authorities (Rugman et al., 1999). Perhaps most well-known27 is the dispute filed by the
U.S.-based Ethyl Corp. against the Canadian government regarding the company’s MMT fuel additive.28 Soloway’s (1999) analysis of this case illustrates
the web of players and interests that interact at different levels with trade and the
environment. In a second case, Metalclad Inc., a California-based hazardous
waste disposal company, filed a complaint with the Mexican government in
1997. The company claimed that the state government in San Luis Potosi prevented it from establishing a hazardous waste landfill and requested $65 million
for breach of contract. A resolution from the panel in favor of Metalclad Inc. was
issued in August 2000. Metalclad Inc. was awarded $16.7 million for losses the
company incurred in building a Mexican hazardous waste site it was never
allowed to operate.29 In two similar cases against Mexico, DESONA sought $17
million in damages and USA Waste sought $60 million in damages for alleged
breach of an agreement granting a street-cleaning concession and a permission
to open a landfill in Acapulco, respectively. Both cases were dismissed by the
arbitration panel (Rugman et al., 1999).
These cases illustrate the empowerment of market actors to challenge environmental regulations even without the political support on the part of national
governments. It also illustrates the growing complexity of governance in North
America. Morales (1999) called this the relocation of authority competencies
from state-centered actors to nonstate actors and the creation of a hybrid model
of economic governance. It is worth asking how far governance under NAFTA,
or the new spaces of convergence where multiple and differentiated actors have
a stake (Gandy’s [1999] “new geographies of regulation and liberalization,”
mentioned earlier), can provide the bases for balanced growth and social and
environmental well-being in North America.
EXPECTATIONS NOT MET
It is worth returning now to the ENGOs’ and NACEC’s respective roles in
environmental governance. As noted earlier, initial expectations that these
actors would play a significant role in implementing environmental provisions
of NAFTA and its side agreement have not been met, facilitating in turn the
growing empowerment of the trade community. Here, it is argued that initial
expectations were not met due to the following three factors: ENGOs’ declining
participation in environmental governance, problems of public participation in
relation to the NACEC, and the three federal governments’strong support for the
trade community.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1384
AMERICAN BEHAVIORAL SCIENTIST
ENGOS’ DECLINING PARTICIPATION
ENGOs’success during the NAFTA negotiations opened the possibility of an
unprecedented role for them in North American environmental governance.
However, ENGOs failed to capitalize on this success by dynamically participating in the implementation of NAFTA and the side agreement. ENGOs failed to
consider the strategic value of NAFTA in terms of the interactions between trade
and the environment despite it being easier to have an impact on trade and environment interaction in a regional process such as NAFTA than on a global one
such as the WTO. Fully explaining why ENGOs have made such a choice is
beyond the scope of this article; however, an analysis of the NAFTA experience
suggests a number of important considerations worthy of further examination.
Limited Resources/Shifting Priorities
Mainstream ENGOs in the United States mentioned lack of resources as their
main reason for no longer following trade and environment issues related to
NAFTA. Although these groups have successfully helped organize massive
demonstrations against free trade (e.g., the demonstrations against the WTO in
Seattle at the end of 1999), it is difficult to identify their role in North American
environmental governance. One of the more surprising findings of the present
study was that most mainstream ENGOs have only two or three persons running
their trade campaigns. Given that level of resources and the groups’ decisions to
concentrate on anti-WTO campaigns, it is understandable that they are unable to
contribute much to the complex and demanding issues of North American environmental governance, including implementation of NAFTA and its environmental side agreement.
Divisions Among ENGOs
Lack of resources is only part of the answer for declining nongovernmental
organization (NGO) participation in the implementation of NAFTA, however.
At least part of the explanation is based on divisions within the environmental
community during the NAFTA negotiations (Benton, 1996; Hogenboom, 1998;
Sanchez, 1994).30 For ENGOs in favor of NAFTA (National Wildlife Federation, World Wildlife Fund, and Audubon Society), economic growth with
NAFTA would generate new resources to support environmental protection
efforts in all three countries, especially in Mexico. For such groups, NAFTA was
perceived as a partial victory. For groups in favor of NAFTA, it is a matter of
waiting for the expected benefits to materialize. The operation of the environmental institution created under NAFTA, particularly the NACEC, provides
assurance to them that the process is moving in the right direction.
ENGOs opposing NAFTA (Sierra Club, Friends of the Earth, Greenpeace,
and Public Citizen) based their position on the marginalization of environmental
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1385
groups from the dispute-resolution process, the incapacity of nongovernmental
organizations to initiate a process that might eventually lead to formal sanctions
against environmental polluters, and the limited capacity of governments to control corporate activity under free trade. For these groups, NAFTA was perceived
as a partial defeat. For those opposing NAFTA, there is little more to obtain from
it, and it is better to focus the attention on the big challenge that the WTO
represents.
These perspectives suggest a narrow focus on behalf of the ENGOs on the
trade and environmental interactions. Their positions on trade agreements and
their implications for the environment have been based on limited knowledge
gathered from a few cases documenting particular negative consequences (i.e.,
the conservation of some species or extreme cases like NAFTA’s Chapter 11).
But implications of trade and environment interactions are far more reaching,
covering almost every aspect of the complex interaction between the economy,
the environment, and society. Many of these interactions are difficult to anticipate during the negotiation of trade agreements, becoming evident only during
in the implementation process. In other cases, the negative consequences of
those interactions result from interpretation of the provisions in the agreement
by different actors during implementation. NAFTA’s Chapter 11 again is a good
example.
Missing so far in the implementation of NAFTA is the creation of a learning
process that can help identify and prevent negative consequences of interactions
between trade and the environment. Incorporating a social dimension into that
learning process is essential as well.
Suggestions for Further Research
The declining role of ENGOs in the NAFTA institutions of environmental
governance underscores the need for further research on the role of these actors
in the interactive process of free trade and the environment. Most of the literature
on NGOs in development issues is optimistic about their role in international,
national, and local arenas. But some scholars stress the needs for a better assessment about the role of NGOs in governance. Jordan and Van Tuijl (2000) suggested that NGOs’ appropriate advocacy role should be to directly influence
reality rather than policy.31 This is a role beyond the delivery of narrow services
(e.g., helping people access information or providing tools to reach out to decision makers), which is a role supported by the World Bank, international agencies, and national governments. For others, NGOs’ actions relate to influencing
policy, especially public policy (Edwards & Hulme, 1996). However, much less
attention has been provided on ENGOs’ role in environmental governance.
Important questions for further research include
• What factors limit ENGOs’role in environmental governance to providing narrow
services and raising issues during debates over trade agreements?
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1386
AMERICAN BEHAVIORAL SCIENTIST
• What dynamics and conditions encourage ENGOs to change reality and directly
address negative consequences of trade on the environment?
• What factors limit ENGOs’ role in environmental governance to influencing policy making, leaving implementation to governments, international organizations,
and the trade community?
• What internal and external conditions are necessary for ENGOs to become full
partners in environmental governance, counterbalancing trade groups’
empowerment?
NARROW INTERPRETATIONS OF THE SIDE AGREEMENT
The declining participation of ENGOs under NAFTA has made it easy for the
three governments to interpret NAFTA’s environmental side agreement rather
narrowly. The side agreement’s provisions are broadly worded and amenable to
a variety interpretations. The governments have chosen to interpret the agreement in a restricted manner, weakening it and affecting the NACEC’s role in
environmental governance. That role is crippled also by the limitations in design
and deficiencies in operation of the NACEC discussed earlier. The NACEC
council’s continuing efforts to micro-manage and to reduce the independence of
the secretariat also negatively impact the NACEC’s governance role.
Three factors help explain the three governments’ restricted interpretation of
the side agreement and their interest in maintaining tight control of the environmental commission. First, the NACEC and side agreement were created as political concessions to the U.S. environmental community to obtain their support
for congressional approval of NAFTA. The creation of the environmental side
agreement and the NACEC were costs that needed to be assumed by the governments but that could be minimized through restricted interpretation of the side
agreement and tight control of NACEC’s operation.
Second, none of the three governments want the NACEC to become an effective supranational governing/regulatory institution. Sovereignty concerns are
often raised in opposition to such a role for the NACEC.
Third, the environmental agencies have no interest in having their problems
and deficiencies exposed to the publics and news media of the three countries.
Restricted interpretation of the side agreement and control of the NACEC minimize exposure of the bureaucracies’ deficiencies. Examples of this include the
NACEC council’s efforts to modify submission procedures under Articles 14
and 15, to create a working group to oversee the secretariat’s development of
factual records, and to more generally further reduce the secretariat’s already
limited independence.
Contrasting Enforcement of
Trade and Environmental Provisions
There is a significant governance gap between NAFTA’s trade and environmental provisions. Kibel (2000), for example, compared the enforcement pro-
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1387
visions for trade violations under NAFTA and environmental violations under
the side agreement.
Allegations of violations of NAFTA’s trade rules can lead to an arbitration
process under Chapter 19 of NAFTA or a submission to NAFTA’s Free Trade
Commission under Chapter 20. As of December 2000, 54 claims had been filed
under Chapter 19 and 4 under Chapter 20. As illustrated earlier, NAFTA also
permits a private corporation to bring a direct claim if that corporation believes
that a domestic environmental law resulted in the expropriation of the corporation’s investment. The corporation can force a government into binding arbitration without need of approval by any national government or international council. The resolution of these claims can result in the imposition and/or recession
of hundred of millions of dollars of duties and tariffs.
By contrast, NAFTA’s environmental side agreement contains virtually no
remedies or sanctions (Schiller, 1997). Kibel (2000) stressed that to date, no single claim has been filed alleging nonenforcement under the NAAEC (Article
24); Article 14 does not provide for sanctions.
Limited Public Participation
A further issue to consider in the study of NACEC’s role in governance is that
related to the form of public consultation or participation. It was mentioned that
the JPAC has been regarded as an interface between the public and NACEC.
Also mentioned earlier were concerns about the JPAC’s operation in terms of its
representation of the public and the way it transforms public input into advice
for the council. Those concerns included also questions about the use of that
advice by council. Perhaps the case where there is clear evidence that that input
has been taken into consideration was the opposition by a large number of stakeholders to the modifications introduced by the council to the submission process
under Articles 14 and 15 (JPAC meeting, June 2000; see http://www.cec.org/
who we are/jpac/discussions/index.cfm?varlan=english).
Public participation has different possible interpretations. For H. Johnson
and Wilson (2000), public participation can range from consulting the stakeholders while the decisions concerning the issues affecting them are made elsewhere, to participation in its exact form after the principled decisions have been
taken, to full participation in the definition of the problem and the implementation of solutions. For these authors, public participation can lead to new institutional arrangements of partnership between state, private, and civil society
actors. These arrangements are seen as ways of sustaining and improving the
effectiveness of social provisions while making them cheaper and of avoiding
the problems of social exclusion and fragmentation associated with purely private provisions (H. Johnson & Wilson, 2000).
The review of public participation under the side agreement (through the
NACEC) shows that the NACEC council’s three parties have opted for a restricted
interpretation of public participation. Under JPAC’s current operational rules,
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1388
AMERICAN BEHAVIORAL SCIENTIST
stakeholders are consulted without any participation in the decision-making
process or project design and participation only to a very limited degree in development of NACEC’s projects. The restricted interpretation of public participation by the NACEC creates serious obstacles to incorporate stakeholders in governance, limits the role of this institution in that process, and jeopardizes its
future development.
CONCLUSION
This article illustrates the relationship between governance, trade, and environment in NAFTA. The new forms of governance opened by NAFTA reveal an
imbalance in the role and power of different actors. The declining participation
of ENGOs in the implementation of NAFTA contrasts with the empowerment of
market actors. The article also highlights the complexity of social processes
established under NAFTA. The research results stress the need to improve our
conceptual frameworks to better understand the governance process. Broad generalization of actors often used in the study of governance (the state, NGOs and
other parts of civic society, and the business community) could lead to an oversimplification of a complex reality. In the case of NAFTA, none of the actors acts
as a homogenous group. This article portrays interactions between actors, interests, and processes behind the trade and environment debate and shows how they
lead to the creation of an alliance among parts of the state, corporations, and
parts of civil society. Referred to here as the trade community, such a coalition
has parallels with Sklair’s (1995) transnational capitalist class.
NAFTA’s green label is also questionable. Expectations have diminished significantly that environmental provisions in NAFTA and the side agreement
together with the creation of the NACEC would lead to broader discussion of
trade and environmental interactions. Such a discussion would be central to the
development of an improved understanding of trade-environment interactions
and policies to control trade’s negative effects. Unfortunately, the three governments’narrow and technical interpretation of NAFTA and its environmental side
agreement leaves little room to expand our embryonic understanding of interactions between trade and the environment. The empowerment of the trade community has favored the interpretations of those interactions to those cases where
the environment is considered an obstacle to free trade. There is still much work
to be done to learn also from many other cases where trade has had severe implications for environmental and social well-being. NAFTA Chapter 11’s provisions are a good example of the extent of these consequences for the communities in North America, but they may be only the tip of the iceberg.
It is difficult to conclude this article without a pessimistic feeling. The opportunities created during the NAFTA negotiations to counterbalance the power of
the trade community and to expand our knowledge of trade and environment
interactions have been systematically closed by the bureaucracies of the three
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1389
governments involved. The increasing importance of trade in the world economy makes likely the emergence of more and further reaching trade agreements,
such as the proposed Free Trade Area of the Americas.32 If the trends and
dynamics that have occurred so far in the case of NAFTA reappear in new agreements, aggravation of environmental and social problems can be expected elsewhere as well.
NOTES
1. Canada, Mexico, and the United States.
2. For an online version, see http://www.sice.oas.org/trade/nafta/naftatce.asp.
3. The North American Free Trade Agreement’s (NAFTA’s) formally specified objectives
include the elimination of trade barriers, facilitation of cross-border movement of goods and services, and promotion of fair competition and investment opportunities.
4. These agreements include the Convention on Trade and Endangered Species of Wild Fauna
and Flora, the Montreal Protocol on Substances That Deplete the Ozone Layer, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, the
Agreement Between the Government of Canada and the Government of the United States of America Concerning the Transboundary Movement of Hazardous Wastes, and the Agreement Between
the United States of America and the United Mexican States on the Cooperation for the Protection
and Improvement of the Environment in the Border Area.
5. Here and throughout this article, party and parties refer formally to one or more of NAFTA’s
three signatories: “the Government of Canada, the Government of the United Mexican States and the
Government of the United States of America” (preamble).
6. Established under NAFTA, Chapter 20.
7. Article 24 states that Canada, Mexico, and the United States may request the Council of Ministers to convene an arbitration panel to consider whether one of the other parties has engaged in a
“persistent pattern of failure to effectively enforce its environmental laws.” If two thirds of the council approve the request, then an arbitration panel is convened to consider the allegations. The maximum penalty that can be imposed against a party found in violation of the side agreement is $20 million (US).
8. For example, Alejandro Nadal’s (1999) study on the impacts of NAFTA on maize production
in Mexico suggested important ecological and social consequences for Mexico of the liberalization
of maize trade under NAFTA. He identified the lost of endemic species of maize leading to the lost of
biodiversity and germplasm as well as the displacement of millions of campesinos and the destruction of subsistence livelihoods in rural areas of Mexico. These consequences were neglected during
the negotiations of the free trade agreement.
9. For example, a North American Commission for Environmental Cooperation (NACEC)
report on NAFTA institutions in 1997 reported that “at present [NAFTA’s Free Trade Commission]
and its responsible officials have no ambition to coordinate, or even comprehensively monitor and
service, the activities of other ministers and department or agencies” (Kirton & Fernandez de Castro,
1997, p. 23). Recent confidential interviews with U.S. and Mexican environmental officials and the
NACEC showed similar results.
10. In fact, the Working Group on Pesticides is unique among the NAFTA economic institutions
in that it includes broad representation from industry and nongovernmental organizations.
11. Federico Reyes Heroles’s (1996) analysis of sovereignty in the context of NAFTA illustrates
this point in the case of Mexico. For him, nationalism is a product of the use of sovereignty in Mexican official political discourse for more than half a century. For a discussion on the sovereignty issue,
see Hoebing, Weintraub, and Baer (1996).
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1390
AMERICAN BEHAVIORAL SCIENTIST
12. There is similar opposition to empowering the United Nations Environmental Program
(UNEP) or the Global Environmental Facility (GEF) to oversee the global environment.
13. Barry Rabe’s (1999) comparative study of pollution prevention and regulatory integration in
the United States and Canada concluded that decentralization in Canada has achieved less than federalism has in the United States.
14. Canada operates one of the most decentralized forms of environmental policy of any Western
nation. Canadian provinces are largely free to respond to localized conditions and to pursue innovative, flexible approaches to environmental protection (Rabe, 1999). Canadian and Mexican environmental agencies face few of the legislative mandates and oversight common in the United States.
15. La Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT), the Secretariat of
Environmental Mediation and Natural Resources, Mexico’s federal environmental agency.
16. All monetary amounts are in U.S. dollars.
17. Once a petition is submitted to the NACEC, the secretariat investigates the petition and
decides if a factual record is warranted. The NACEC council has the final decision if a factual record
is developed.
18. Environmental officials in these countries consider this process a direct interference with
their sovereignty.
19 The Joint Public Advisory Committee’s (JPAC’s) recent report to council (see http://www.
cec.org/who we are/jpac/advice/index.cfm:varian=english) showed a strong defense of the process
and the role of the secretariat. It also pointed out the conflict of interests among parties seeking to
control the submission process (the NACEC council has considered creating a working group that
could oversee the submission process, including preparation of factual records). The JPAC report
illustrates the abuses in the use of confidentiality provisions by the parties and the need for transparency in the council’s reasons for a decision under Articles 14 and 15. The report also recommended
that timelines be set for the secretariat and council to carry out their duties, that the secretariat’s independence be strengthened, that it be given additional resources to process citizen submissions, and
that a factual follow-up process be established.
20. There is an important difference between public consultation and public participation. Public
comments in JPAC meetings are translated by the JPAC into advice for the NACEC council and secretariat; this is the form that public consultation takes in NACEC’s operation. There is no direct public participation in NACEC’s decision-making processes.
21. In the case of NAFTA, this class is what was referred to earlier as the trade community. It is
made up of those sectors of the state supporting and defending trade interests (mainly but not only
the bureaucracies of trade ministries in the three governments), the corporations involved in free
trade, and some sectors of civic society (professional associations, trade organizations, and even
some environmental groups).
22. Besides the NACEC, two other environmental organizations were created during the NAFTA
negotiations: the Border Environmental Cooperation Commission (BECC) and the North American
Development Bank (NADBANK). These institutions were created to address problems related to
urban environmental infrastructure at the U.S.-Mexico border. They are not addressed in this article
due to their bilateral nature.
23. Interviews:
• Audley, J. (2000, February 29). Senior adviser in trade policy, Environmental Protection
Agency (EPA).
• Azuela, A. (2000, April 11). Mexico’s attorney general for the environment
(PROFEPA).
• Barba, R. (2000, February 29). President of the NACEC’s Joint Public Advisory Committee and President of the Asociacion de Grupos Ambientalistas, Mexico.
• Codwell, J. (2000, March 14). National Wildlife Federation.
• Ferreti, J. (2000, March 2). NACEC’s executive director.
• Samaniego, J. L. (2000, March 2). Director of International Activities, SEMARNAP24
and Mexico’s alternate at the NACEC.
• Seligman, D. (2000, March 8). Sierra Club.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1391
24. Secretaría de Medio Ambiente, Recursos Naturales y Pesca (SEMARNAP), the Secretariat
of Environmental Mediation, Natural Resources and Fisheries—SEMARNAT’s predecessor.
25. Final awards of arbitrated panels activated under Chapter 11 are binding, but they are to be
enforced by domestic courts. In the case final awards are not enforced or are neglected by governments, the complaining party has the option to activate a panel mechanism under chapter 20 (negotiated at a government-to-government level).
26. The risk of litigation being initiated is increased by inclusion of the most expansive definition
of investor ever used in an international agreement. A minority shareholder in a foreign investment
can initiate a challenge even without the consent of the actual company involved. For a review of the
environmental implications of Chapter 11, see Mann and Von Moltke (1999).
27. Although a number of cases with an environmental dimension has been initiated under chapter 11, it is difficult to ascertain how many such cases have been considered so far. To date, information disclosure about the Chapter 11 arbitrations has been minimal. This lack of disclosure can
extend to the arbitral panels’ final decisions.
28. A settlement was reached outside the panel process where the Canadian government agreed
to pay Ethyl Corp. $19.3 million and repeal a ban on the MMT fuel additive.
29. Mexico has appealed this decision. Mexico’s appeal is being watched closely because it concerns the first case in which a corporation has won an award in an investor-to-state complaint filed
under NAFTA.
30. Elsewhere, this author argued that NAFTA polarized the U.S. environmental community and
forced environmental nongovernmental organizations (ENGOs) to clarify for the first time their
ideological position on trade liberalization (Sanchez, 1994).
31. Jordan and Van Tuijl (2000) suggested that nongovernmental organization (NGO) advocacy
is aimed at directly influencing reality rather than policy.
32. In talks on the Free Trade Area of the Americas, for example, the Mexican government has
endorsed protections such as those spelled out in NAFTA’s Chapter 11, its position in the Metalclad
case notwithstanding.
REFERENCES
Audley, J. (1997). Green politics and global trade. NAFTA and the future of environmental politics.
Washington, DC: Georgetown University Press.
Benton, L. (1996). The greening of free trade? The debate about the North American Free Trade
Agreement (NAFTA) and the environment. Environment and Planning A, 28, 2155-2177.
Edwards, M., & Hulme, D. (Eds.). (1996). Nongovernmental organizations—Performance and
accountability. Beyond the magic bullet. West Hartford, CT: Kumarian Press.
Esty, D. (1993). Integrating trade and environmental policy making: First steps in the North American Free Trade Agreement. In D. Zaelke, P. Orbuch, & R. Housmasn, (Eds.), Trade and the environment: Law, economics and policy (pp. 45-56). Washington, DC: Island Press.
Finger, M., & Tamlotti, L. (1999). New global regulatory mechanisms and the environment: The
WTO and the ISO. IDS Bulletin, 30(3), 8-15.
Ford, L. (1999). Social movements and the globalization of environmental governance. IDS Bulletin, 30(3), 68-74.
Gandy, M. (1999). Rethinking the ecological leviathan: Environmental regulation in an age of risk.
Global Environmental Change, 9, 59-69.
Hoebing, J., Weintraub, S., & Baer, M. D. (Eds.). (1996). NAFTA and sovereignty trade-offs for Canada, Mexico, and the United States. Washington, DC: Center for Strategic and International
Studies.
Hogenboom, B. (1998). Mexico and the NAFTA environment debate. The transnational politics of
economic integration. Utrecht, the Netherlands: International Books.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
1392
AMERICAN BEHAVIORAL SCIENTIST
Independent Review Committee. (1998). Four-year review of the North American Agreement on
Environmental Cooperation: Report of the independent review committee. Montreal, Canada:
North American Commission for Environmental Cooperation.
Jeffery, M. (1996). The legal framework for environment regulation under the North American Free
Trade Agreement. In S. Rubin & D. Alexander (Eds.), NAFTA and the environment. The Hague,
the Netherlands: Kluwer Law International.
Johnson, H., & Wilson, G. (2000). Biting the bullet: Civil society, social learning and the transformation of local governance. World Development, 28, 1891-1906.
Johnson, P. M., & Beaulieu, A. (1996). The environment and NAFTA: Understanding and implementing the new continental law. Washington, DC: Island Press.
Jordan, L., & Van Tuijl, P. (2000). Political responsibility in transnational NGO advocacy. World
Development, 28, 2051-2065.
Karliner, J. (1997). The corporate planet: Ecology and politics in the age of globalization. San Francisco: Sierra Club Books.
Kibel, P. (2000). The paper tiger awakens: North American environmental law after the Cozumel
reef case [Electronic version]. Columbia Journal of Transnational Law, 39, 395.
Kirton, J., & Fernandez de Castro, R. (1997). NAFTA’s institutions: Their environmental impacts
and potential (Environment and Trade Series 5). Montreal, Canada: North American Commission for Environmental Cooperation.
Lipschutz, R. (1997). From place to planet: Local knowledge and global environmental governance.
Global Governance, 3, 83-102.
Mann, H., & Von Moltke, K. (1999). NAFTA’s chapter 11 and the environment. Addressing the
impacts of the investor-state process on the environment (Working Paper). Winnipeg, Canada:
International Institute for Sustainable Development.
Manning-Cabrol, D. (1995). The imminent death of the Calvo clause and the rebirth of the Calvo
principle: Equity of foreign and national investors. Law and Policy in International Business, 26,
1169-1200.
Morales, I. (1999). NAFTA: The governance of economic openness. Annals of the American Academy of Political Social Scientists, 565, 35-65.
Mumme, S., & Duncan, P. (1996). The Commission on Environmental Cooperation and the USMexico Border Environment. Journal of Environment and Development, 5, 197-215.
Munton, D., & Kirton, J. (1994). Environment cooperation: Bilateral, trilateral, multilateral. North
American Outlook, 4, 59-87.
Nadal, A. (1999). Issue Study 1. Some environmental implications of the North American Free
Agreement (NAFTA). In North American Commission for Environmental Cooperation (Ed.),
Assessing environmental effects of the North American Free Trade Agreement (NAFTA). An analytical framework and issue studies (pp. 65-182). Montreal, Canada: Environment and Trade
Series.
North American Commission for Environmental Cooperation. (1999). North American agenda for
action 1999-2001. Montreal, Canada: Author.
North American Commission for Environmental Cooperation. (2000). 2001-2003 proposed plan
and budget. Montreal, Canada: Author.
Paterson, M. (1999). Interpreting trends in global environmental governance. International Affairs,
75, 793-802.
Rabe, B. (1999). Federalism and entrepreneurship: Explaining American and Canadian innovation
in pollution prevention and regulatory integration. Policy Studies Journal, 27, 288-306.
Reyes Heroles, F. (1996). Sovereignty: Concepts, facts, and feelings. In J. Hoebing, S. Weintraub, &
M. Baer (Eds.), NAFTA and sovereignty trade-offs for Canada, Mexico, and the United States
(pp. 69-85). Washington, DC: Center for Strategic and International Studies.
Rugman, A., Kirton, J., & Soloway, J. (1999). Environmental regulations and corporate strategy. A
NAFTA perspective. New York: Oxford University Press.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016
Sanchez / THE CONTEXT OF NAFTA
1393
Sanchez, R. (1994). NAFTA and the environment: Challenges and alternatives for Mexico. In
V. Bulmer-Thomas, N. Craske, & M. Serrano (Eds.), Mexico and the North American Free Trade
Agreement. Who will benefit? (pp. 95-118). New York: Macmillan.
Schiller, D. (1997). Great expectations: The North American Commission on Environmental Cooperation review of the Cozumel pier submission. University of Miami Inter-American Law
Review, 28, 437-477.
Sklair, L. (1995). Sociology of the global system. Baltimore: John Hopkins University Press.
Soloway, J. (1999). Environmental trade barriers in NAFTA: The MMT fuel additives controversy.
Minnesota Journal of Global Trade, 8, 55-95.
Steinberg, R. (1995). Trade-environment negotiations in the EU, NAFTA and GATT/WTO: State
power, interests and the structure of regime solutions (Working Paper 75). Berkeley, CA: Berkeley Roundtable on the International Economy.
Tracker, S. C. (1999). NAFTA coalitions and the political viability of neoliberalism in Mexico. Journal of Interamerican Studies and World Affairs, 41(2), 57-90.
Wallach, L., & Naiman, R. (1998). NAFTA: Four and a half years later. The Ecologist, 28, 171-177.
Wapner, P. (1996). Environmental activism and world civic politics. Albany: State University of
New York Press.
Downloaded from abs.sagepub.com at PENNSYLVANIA STATE UNIV on March 5, 2016