Mexico: Trade and the Environment

Mexico: Trade and the Environment

History

What is NAFTA?

The North American Free Trade Agreement (NAFTA) was put into practice on January 1, 1994 and eliminated most barriers to trade between the U.S., Canada and Mexico. Some barriers were removed right away while others were eliminated over longer periods of time, ranging from five to fifteen years. The agreement addresses energy, textiles and apparel, agricultural products, transportation, investment, and intellectual property, among other things. Two related agreements were created after NAFTA to address environmental and labor issues.

Negotiations before the Treaty

The agreement itself was signed on December 17, 1992, by Mexican President Salinas de Gortari, U.S. President George Bush and Canadian Prime Minister Brian Mulroney. Incoming President Bill Clinton asserted the need for side agreements to go along with NAFTA, and a number of talks and meetings were held in Washington, Mexico City and Ottawa to negotiate the terms of the two side agreements. The side agreements were signed by all three countries on September 14, 1993 and NAFTA was passed by the United States Senate and Congress on November 20, 1993.

The North American Agreement on Environmental Cooperation (NAAEC)

The North American Agreement on Environmental Cooperation (NAAEC) calls for environmental impact analyses by each nation that is a member of NAFTA. The agreement encourages the respective states to consider the interconnectedness of their environments, to promote sustainable development, enforce and comply with environmental regulations, and use pollution prevention practices.

The North American Agreement on Labor Cooperation (NAALC)

The North American Agreement on Labor Cooperation was established to foster the creation of new jobs, improvements in wages and living conditions, and the protection of the rights of workers. More secure markets were intended to result in a rise in productivity of firms and the quality of goods. The agreement calls for each country to develop their own laws and regulations concerning labor standards, while also establishing cooperative standards. A secretariat performs publicly accessible studies of labor conditions in each country in order to promote transparency.

Controversial Legislation

Chapter 11

Chapter 11 of NAFTA concerns issues of investment, and the conflict between economic life standards of parties to the agreement and trade or business standards. Disagreement over chapter 11 concerns whether or not NAFTA should follow a system of neutral laws, or one that helps developing countries. Under the chapter, the governments of the U.S., Canada, and Mexico can be liable for the losses of companies or individuals. Chapter 11 allows international panels to examine the domestic policies of those governments, which is also a disputed issue.

Chapter 19

Chapter 19 of NAFTA concerns antidumping and countervailing measures, “Review and Dispute Settlement in Antidumping and Countervailing Matters.” Parties to the agreement can use their own antidumping and countervailing laws with goods produced in that country. There is controversy over judicial review of the law. Issues pertaining to Chapter 19 can be reviewed by a panel made up of representatives from the two concerned parties, instead of being reviewed by an Article III court from the Court of International Trade in the U.S., and similar courts in Canada and Mexico. Decisions made by the panels are final.

Chapter 20

Chapter 20 concerns the settlement of disputes about NAFTA policies and their implementation. First, there is discussion between the two concerned parties, then a meeting between the trade ministers of the two parties, then a meeting of a five member panel. There are also scientific and review boards to gather and analyze relevant information.

Mexico: Trade and the Environment

Contents