TPP Negotiations Put Progress on Reconciling Trade and Environment at RiskBy Bill Krist // Monday, April 21, 2014
Trade expansion, if not implemented correctly, can have damaging side effects on the environment. For example, removing tariffs and trade barriers to lumber and wood products can encourage illegal logging. Since 1990, the U.S. has made substantial progress in ensuring that our trade agreements support good environmental stewardship and accordingly some environmental groups supported the environmental provisions of our most recent trade agreement with Peru.
In the negotiations with 11 other nations for the Trans-Pacific Partnership (TPP) the U.S. has put forward some new and innovative ideas as well as proposals reflecting the best practices from our agreements negotiated over the past ten years. However, our TPP partners are rejecting these proposals. Unless there is progress in this area, we will take a step backwards in reconciling trade and environmental policies and in fact the very future of the TPP negotiations will be at risk. On Earth Day 2014 it is important to take a serious look at these issues.
The other countries involved in the TPP negotiations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The TPP area is a critical arena in the fight to protect critical forests, fisheries and wildlife:
• Trade in forest products is substantial in the TPP area, and some of this is from illegal logging, including timber from protected tropical hardwood forests. This not only jeopardizes vital forests, but it deprives governments of substantial revenue, estimated to be as much as $6 billion annually.
• Eight of the top 20 fisheries countries in the world are participating in the TPP talks. A number of species of fish are endangered and illegal fishing activities and subsidies that contribute to overfishing are contributing to the loss of vital fish stocks.
• The TPP region “includes primary trading routes for illegal trade ranging from rhino horn, live tiger cubs and tiger parts for medicinal purposes, to tortoises, snakes, iguanas, exotic pets and much more,” according to the U.S. Trade Representative.
In the TPP, U.S. negotiators have proposed similar environmental provisions to those in our 2012 agreements as well as some outstanding new approaches to deal with de-forestation and some nasty practices such as shark-finning and trans-shipment of products from endangered animals such as ivory from threatened African elephants. Additionally, the U.S. is proposing that commitments under seven multilateral environmental agreements to which TPP countries have already committed be part of their TPP commitments.
The most controversial U.S. proposal is that environmental disputes be subject to the same dispute settlement mechanism as commercial disputes. Unfortunately all 11 of the other countries participating in these negotiations have opposed U.S. environmental proposals. Instead, they only want consultations in the case of disputes, rather than the possibility of sanctions available in the case of commercial disputes. This would be a huge step backwards from all the progress that has been made over the past two decades.
Our TPP partners are correct that it is always preferable to resolve disputes through consultations and cooperative mechanisms, rather than a more confrontational dispute settlement process, and that is how our FTAs have actually operated. All of our agreements include requirements for cooperative approaches and consultations before dispute settlement can be initiated, and no dispute settlement cases have actually been brought under the environmental provisions of any of our trade agreements.
As a general rule, environmental problems in poorer countries come down to a lack of capacity, and the U.S. is likely to support substantial funding for capacity building to resolve these problems. However, it is important to have the stick of dispute settlement in the closet.
It is difficult to understand why our TPP partners are so opposed to the U.S. proposals. Protecting the environment is critical for the long term health of all countries, and a number of our TPP partners have very high standards for environmental protection, including Australia, Canada, Japan and New Zealand. Other TPP countries have already agreed to strong environmental provisions in our bilateral FTAs including Chile, Peru and Singapore. And some of the MEAs that our TPP partners have agreed to, such as the Montreal Protocol, have enforcement mechanisms.
In order to develop a consensus, U.S. negotiators can offer flexibility to countries such as Vietnam that will have difficulty meeting higher standards both in terms of agreeing to a longer time frame for implementation and by offering capacity building support. Furthermore, the U.S. does have some leverage on this issue. For example, if some of our TPP partners refuse to accept the provisions addressing illegal logging, the U.S. could exclude those countries from tariff cuts on all wood products including logs, wood flooring and furniture.
Not only does this stalemate in the TPP threaten the environment, but it threatens the very success of these negotiations. The environmental community has blocked trade agreements in the past. Some 24 environmental groups, including powerhouses such as the World Wildlife Fund with 5 million members globally and Sierra Club with 2.4 million U.S. members, sent a letter to the U.S. Trade Representative on November 14, 2013 outlining their concerns. Our TPP partners should pay attention both because it is sound policy and because it is important to achieving a successful agreement.
Image Credit: “Earth Day” courtesy of Flickr user Fort Carson