Abstract

My remarks will focus on the challenge that treaty structure poses addressing the tension between trade, investment, and environment. The question I ask is whether trade, investment, and environment are closed boxes not only each other, but also non-state participants, especially members of civil society. I will use the NAFTA Environmental Side Agreement (1) illustrate this issue. My main point is that treaty structure creates biases in how trade and environment issues are resolved. With treaty structure I refer the design of treaties either primarily as contractual arrangements or more like public regulatory regimes. Trade treaties tend resemble the former, while environmental agreements are being configured increasingly resemble the latter. By their design, public regulatory regimes tend be better at promoting civil society involvement and vindicating public values than contractual arrangements. A BRIEF OVERVIEW OF THE NORTH AMERICAN AGREEMENT ON ENVIRONMENTAL COOPERATION AND ITS CITIZEN SUBMISSIONS PROCESS The environmental side agreement was intended promote environmental cooperation and ensure that NAFTA states would not regress in their environmental protection efforts because of increased competitive pressures. Under the side agreement, the parties are required ensure high levels of environmental protection (2) and their environmental (3) The agreement also contains citizen submission process through which anybody, including private individuals, EGOs, and corporations, can complain about NAFTA party's failure to effectively enforce its environmental law. The submissions process is well-known, and I will skip the details. In broad outline, there are five basic steps: (1) petition or submission the Commission for Environmental Cooperation alleging failure effectively enforce environmental laws; (2) review and decision by the secretariat that the submission is essentially non-frivolous, and request for response from the target state; (3) decision by the Council, made up of the environmental ministers of the NAFTA countries, on whether develop factual record; (4) Commission preparation of factual record, which may take from months years; (5) Council vote on whether release the final report the public; two-thirds majority vote is required for public release. At this point, the process has run its course. There is no substantive remedy at the end. The outcome is report documenting the facts underlying the enforcement failure allegations. The side agreement, however, does contain bilateral dispute settlement process in Part V. The standard for triggering that process is that country must have engaged in a persistent pattern of failure ... effectively enforce its environmental law. (4) The standard is thus higher than for triggering of factual records. Theoretically, however, the Article 14 factual records could provide the factual predicates for such dispute settlement proceeding. To date, the Secretariat has received fifty-three submissions; eleven are pending, and another eleven have resulted in factual records. The rest never made it the factual record stage. There have been no Part V proceedings. THE IMPORTANCE OF STRUCTURE; THE CHALLENGE OF CONTRACT FOR PROMOTING PRIVATE AND PUBLIC VALUES Why is treaty structure important? Structure creates biases in how issues are resolved. Contractual arrangements are fundamentally designed advance individual, private interests the extent that they are mutually compatible. In contrast, public regulatory regimes are designed promote public norms and shared values. The result is bias of treaty outcomes toward private or public values depending on the structure of the treaty. For trade agreements, which are largely based on the contract model, outcomes are biased against public values like environmental quality and toward private interests. …

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