Environment
(i.e., couched as softer obligations) than those negotiated with developed-country partners. An illustration is the approach adopted by Chile and Mexico, both of which adhered to comprehensive environmental obligations for the first time in their PTAs with the United States and Canada. Subsequent PTAs concluded by Chile and Mexico with other countries incorporate environmental provisions, but these are not as elaborate as the provisions in their PTAs with the United States and Canada. Chile has signed a memorandum of environmental cooperation with China, and it has also concluded PTAs with Japan, Mexico, Peru, and the Republic of Korea that contain some provisions on the environment.14Apart from NAFTA, Mexico’s only significant PTA to incorporate environmental provisions is the one with Japan. Consistent with Japan’s approach so far, the agreement emphasizes soft principles of environmental cooperation. The overall picture of environmental provisions in PTAs, as it stands today, thus seems to be one of disparate provisions that depend on the parties involved and their inter-se relationships. The OECD study of regional trade agreements highlights the diversity of environmental commitments in PTAs as a matter of potential concern. It notes that countries are likely to be faced with an increasingly complex problem of managing various levels of environmental commitments, and different types of environmental cooperation programs, under a variety of PTAs to which they are parties and that this situation may require closer attention in the near future (OECD 2007, 35). To sum up, although open regionalism is a theoretically desirable goal of PTAs, experience to date with these provisions does not permit conclusions as to whether the goal is achievable through PTAs in general or, more specifically, in the context of environmental provisions in PTAs. Discrimination under Environmental Provisions in PTAs Do environmental provisions under PTAs discriminate against nonparties? At the outset, it needs to be emphasized that a PTA, by its very nature, gives preferential market access to the parties to it, as opposed to nonparties. Environmental provisions in a PTA are structured as obligations to adhere to certain standards, but such adherence is not directly linked to preferential market access (except in a few U.S. PTAs that provide for suspension of concessions as a consequence of nonadherence to environmental provisions). Environmental provisions in PTAs are by themselves unlikely to result in discrimination against third parties in terms of preferential market access. Concerns about preferential access for parties and discriminatory treatment of nonparties could arise in the context of PTA provisions dealing with environmental
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goods and services if liberalization is confined to parties to the PTA and is not undertaken on a most favored nation (MFN) basis. Liberalization of trade in environmental goods and services (EGS) was made part of the WTO’s agenda under the Doha Round negotiations.15 It remains a contentious issue.16 To the extent that countries agree on preferential treatment of EGS at the bilateral level, discrimination against third parties could result. However, the provisions on EGS in PTAs have so far only been in the form of broad commitments to cooperate, rather than of concrete obligations to liberalize trade. Some examples of provisions in PTAs dealing with EGS will illustrate the point: • The agreement between the EU and CARIFORUM includes specific provisions dealing with the commitment of the parties “to make efforts to facilitate trade in goods and services which the Parties consider to be beneficial to the environment. Such products may include environmental technologies, renewable and energy-efficient goods and services and eco-labelled goods.”17 • The CAFTA–DR agreement contains provisions for cooperative action for developing and promoting environmentally beneficial goods and services.18 • The Japan–Mexico PTA refers to cooperation in the field of “encouragement of trade and dissemination of environmentally sound goods and services.”19 • The U.S.–Morocco PTA states, “Parties recognize that strengthening their co-operative relationship on environmental matters can encourage increased bilateral trade in environmental goods and services.”20 Whether implementation of these provisions could result in discrimination against third parties has not yet been tested. Experiences with Implementation of Environmental Provisions Since most PTAs are very recent, there are not many empirical studies examining the implementation of their provisions. The OECD study reports that in some countries, the negotiation of a PTA which included environmental commitments was a driver of reform or led to the acceleration of internal reform processes. In Morocco and Chile, the conclusion of PTAs with the United States accelerated the adoption of several environmental laws, as well as the overhaul and codification of environmental legislation (OECD 2007, 48). There is, furthermore, anecdotal evidence that the commitments in the U.S.–Singapore PTA influenced Singapore