The Environmental Aspects of NAFTA and their Relevance to Possible Trade Agreements between the United States and Caribbean Nations
By Joseph G. Block and Andrew R. Herrup
INTRODUCTION
Prior to the 1993 passage of the North American Free Trade Agreement (NAFTA),1 the island nations of the Caribbean enjoyed preferential access to the United States market for many of the region's most lucrative exports. NAFTA, however, has threatened Caribbean nations' share of the United States market. Because many Caribbean economies rely heavily on trade with the United States, these nation are seeking to save their economic base by gaining accession to NAFTA or enacting a similar trade agreement.
During the 103d Congress' consideration of the General Agreement on Tariffs and Trade (GATT) implementing legislation, the Clinton Administration proposed NAFTA-like parity for Caribbean Basin Initiative (CBI) nations. Although the Administration subsequently withdrew the proposal, it has vowed to revive NAFTA parity for Caribbean nations in the 104th Congress. In considering whether to grant NAFTA parity to Caribbean nations, Congress should examine the status of environmental regulation and enforcement within the Caribbean region. These countries face severe environmental degradation caused by various sources, including marine, agriculture, petroleum industry, and tourism pollution.
Prior to consideration of NAFTA, Mexico upgraded its environmental laws and regulation and increased funding for environmental improvements and enforcement. To help win congressional passage of NAFTA, the three NAFTA member nations agreed to a Supplemental Environmental Agreement designed to ensure adequate enforcement of the domestic environmental laws of the three nations.
Like Mexico, Caribbean nations will have to upgrade environmental standards prior to any free trade agreement. While the NAFTA process largely addressed problems endemic to Mexico and thus is not a perfect model for the Caribbean, these nations can look to NAFTA and other United States-Mexican environmental agreements to anticipate likely concerns and requirements. In addition, these agreements provide examples of bilateral programs to fund environmental improvements.
Part II of this Article examines the present status of the Caribbean environment and the legal framework of existing Caribbean environmental regulations. Part III reviews the existing free trade agreements between the United States and the Caribbean nations, focusing on the funding mechanisms available for environmental improvements. Part IV examines the impact of NAFTA on the trade status of the Caribbean island nations, and also addresses the Caribbean alliances likely to serve as the vehicle for any future multilateral trade agreement. Part IV first discusses environmental provisions of NAFTA and the Supplemental Environmental Agreement. Part IV then examines the political realities that forced Mexico to upgrade its environmental protection. In addition, this Part addresses other environmental agreements between the United States and Mexico designed to increase the likelihood of NAFTA passage. In Part V, this Article discusses efforts by the United States to extend certain NAFTA benefits to Caribbean nations. Part V also discusses the likelihood of future free trade agreements between the United States and Caribbean nations. Part VI of this Article posits that any Caribbean nation wishing to enter into a free trade agreement with the United States should accede to NAFTA. To do so, it must sign the current Supplemental Environmental Agreement and upgrade its environmental policies. Caribbean nations should improve their environmental protection through unilateral action and separate bilateral environmental agreements with the United States. This procedure allows the United States to guarantee that its preferred trading partners adequately address environmental issues and allows Caribbean nations to seek American aid in improving their environments. Part VII concludes that environmental issues will be an important consideration in any free trade negotiations between the United States and Caribbean nations.
Prior to the 1993 passage of the North American Free Trade Agreement (NAFTA),1 the island nations of the Caribbean enjoyed preferential access to the United States market for many of the region's most lucrative exports. NAFTA, however, has threatened Caribbean nations' share of the United States market. Because many Caribbean economies rely heavily on trade with the United States, these nation are seeking to save their economic base by gaining accession to NAFTA or enacting a similar trade agreement.
During the 103d Congress' consideration of the General Agreement on Tariffs and Trade (GATT) implementing legislation, the Clinton Administration proposed NAFTA-like parity for Caribbean Basin Initiative (CBI) nations. Although the Administration subsequently withdrew the proposal, it has vowed to revive NAFTA parity for Caribbean nations in the 104th Congress. In considering whether to grant NAFTA parity to Caribbean nations, Congress should examine the status of environmental regulation and enforcement within the Caribbean region. These countries face severe environmental degradation caused by various sources, including marine, agriculture, petroleum industry, and tourism pollution.
Prior to consideration of NAFTA, Mexico upgraded its environmental laws and regulation and increased funding for environmental improvements and enforcement. To help win congressional passage of NAFTA, the three NAFTA member nations agreed to a Supplemental Environmental Agreement designed to ensure adequate enforcement of the domestic environmental laws of the three nations.
Like Mexico, Caribbean nations will have to upgrade environmental standards prior to any free trade agreement. While the NAFTA process largely addressed problems endemic to Mexico and thus is not a perfect model for the Caribbean, these nations can look to NAFTA and other United States-Mexican environmental agreements to anticipate likely concerns and requirements. In addition, these agreements provide examples of bilateral programs to fund environmental improvements.
Part II of this Article examines the present status of the Caribbean environment and the legal framework of existing Caribbean environmental regulations. Part III reviews the existing free trade agreements between the United States and the Caribbean nations, focusing on the funding mechanisms available for environmental improvements. Part IV examines the impact of NAFTA on the trade status of the Caribbean island nations, and also addresses the Caribbean alliances likely to serve as the vehicle for any future multilateral trade agreement. Part IV first discusses environmental provisions of NAFTA and the Supplemental Environmental Agreement. Part IV then examines the political realities that forced Mexico to upgrade its environmental protection. In addition, this Part addresses other environmental agreements between the United States and Mexico designed to increase the likelihood of NAFTA passage. In Part V, this Article discusses efforts by the United States to extend certain NAFTA benefits to Caribbean nations. Part V also discusses the likelihood of future free trade agreements between the United States and Caribbean nations. Part VI of this Article posits that any Caribbean nation wishing to enter into a free trade agreement with the United States should accede to NAFTA. To do so, it must sign the current Supplemental Environmental Agreement and upgrade its environmental policies. Caribbean nations should improve their environmental protection through unilateral action and separate bilateral environmental agreements with the United States. This procedure allows the United States to guarantee that its preferred trading partners adequately address environmental issues and allows Caribbean nations to seek American aid in improving their environments. Part VII concludes that environmental issues will be an important consideration in any free trade negotiations between the United States and Caribbean nations.
