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Broken Promises: How the Clinton Administration is Trading Away Our Environment Executive Summary Introduction Recommendations Promise #1 Promise #2 Promise #3 Recommendations: A Trade Policy for the Twenty-First Century The 50th anniversary of the world trading system offers an opportunity to launch trade policy reforms necessary to meet the environmental realities of the next century. Trade rules that might have worked well 50 years ago when the international economy was flat on its back and much smaller in scale may now be inappropriate for a global economic system that threatens to burst the planet’s ecological limits. 1. Build the Domestic Consensus for Green Trade An environmentally responsible trade policy must start domestically with a new consensus that future trade negotiations will include environment as an integral component. Without such a consensus, our negotiators will not have the mandate they need to achieve necessary reforms at the international level. First, a formal environmental impact assessment (EIA) must be conducted of all proposed trade agreements early in negotiations. An EIA would involve the public early enough in the process to avoid serious mistakes and controversy down the road. Second, future "fast-track" trade negotiating authority -- the rules under which Congress delegates to the Executive the right to negotiate trade agreements and to have them considered by Congress without amendment -- must mandate environmental and labor objectives for all future trade agreements on a par with economic objectives. Third, to ensure fulfillment of this broader trade mandate, power over trade policy must be shifted back toward Congress. Doing so would better reflect the breadth of interests now affected by trade and investment agreements. To promote a more appropriate balance, "fast-track" trade negotiating authority must be substantially overhauled. For instance, under the most recent fast track proposals, Congress would have virtually surrendered its leverage over trade negotiations by promising not to amend agreements before negotiations even began. Instead, a standing committee of Congress should withhold a decision not to amend trade agreements until it has seen a finished product. Fourth, the Industry Sector Advisory Committee (ISAC) system to the United States Trade Representative (USTR) should be abolished. Under the current system, 500 corporate lobbyists gain privileged access through 16 ISACs to frame US negotiating positions under cover of national security secrecy rules. Environmentalists are confined to one advisory committee whose mandate is limited to narrowly defined "environmental" topics. Meanwhile, under the ISAC system, industry insiders privately counsel the USTR on issues of such overwhelming public interest as food safety standards and timber trade liberalization. Naturally, the client relationship between industry and the USTR produces trade agreements that elevate trade over all other social goals. 2. Reform the World Trade Organization But it is not enough to overhaul the US trade policy apparatus. Before negotiating further trade agreements, the Clinton Administration must achieve concrete and substantial changes in existing World Trade Organization (WTO) rules. Existing WTO rules must be changed to: allow countries to regulate imports based on how products were made. Trade rules now deny consumers the right to use democratic means to limit market access only to those goods produced in ways that minimize environmental damage. Doing so severely inhibits their ability to control their impact on the global environment. allow countries to set health and environmental standards based on the precautionary principle. Under the precautionary principle, government can err on the side of safety in setting standards when knowledge about the risks of a product or production method is incomplete. Given the often unpredictable and discontinuous nature of environmental impacts, the trading system must make room for the precautionary principle in regulating trade, and reform the WTO dispute settlement mechanism. The current system allows panels of trade lawyers to make critical decisions about environmental and public health matters behind closed doors, without adequate public input or even knowledge of the matters under review. We must not only overhaul trade rules, but must ensure that the public gains a fair hearing in an open forum. To underline its commitment to change, the Clinton Administration should declare a moratorium on implementing any WTO panel decisions that touch on environmental or health matters until serious reforms have been put in place. 3. Ensure Balance in an "Eminent Persons Group" Finally, the Administration should insist that establishment of an Eminent Persons Group (EPG), as proposed by some, actually serves the cause of WTO reform. An EPG consisting of independent experts, private citizens and legislators with expertise on trade and the environment issues might provide the authoritative, outside voice needed to spur trade officials to new thinking. However, the appointment of comfortable "insider" figures to an EPG merely to avoid controversy would only serve to further discredit the world trading system. To avoid that fate, an EPG must bring together not only voices of the trade establishment but also the WTO’s sharpest critics. It must include representative from both "rich" and "poor" countries. And, its deliberations must be open to the public, for example, through public hearings held around the world. 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