By Dale Colyer

The environment has become an important and controversial issue in trade agreement negotiations. The draft agreement for the Free Trade Area of the Americas does not specifically address environmental concerns, except for provisions prohibiting the use environmental regulations to attract business by member countries, allowing conservation payments for agriculture, and those addressing a few other, relatively minor, issues.

This paper examines environmental and trade issues in the context of the Free Trade Area of the Americas (FTAA). It includes a brief background discussion of general trade and environmental interactions, reviews the issue of combining trade and environmental agreements versus keeping them as separate processes, reports on analyses of the environmental effects of NAFTA (both from the viewpoint of how the increase in trade has affected the environment and the impacts/effects of including environmental issues as part of the agreement), and examines the environmental-trade nexus in the broader context of the FTAA negotiations.

There is little evidence that the FTAA negotiations are going to involve environmental issues to any significant extent due to opposition by nearly all of the member countries (exceptions are Canada and the U.S.). Most participants in the FTAA negotiations prefer to leave environmental considerations to the WTO, where it also has become a controversial issue. Strong support for inclusion may force FTAA negotiators to give greater consideration to the environment to obtain sufficient support of its approval.

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