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EARTHJUSTICE, FRIENDS OF THE EARTH,
LEAGUE OF CONSERVATION VOTERS, NATIONAL ENVIRONMENTAL TRUST,
NATIONAL WILDLIFE FEDERATION, SIERRA CLUB,
U.S. PUBLIC INTEREST RESEARCH GROUP
May 28, 2004
U.S. Groups Oppose the Central American Free Trade Agreement: Washington, DC &emdash; National environmental organizations representing millions of Americans reiterated their opposition to the U.S.-Central American Free Trade Agreement (CAFTA) that was signed today. The agreement would allow foreign investors to challenge hard-won environmental laws and regulations, and fails to include adequate measures to ensure environmental improvement throughout Central America and the United States. In fact, there is not even parity between enforcement of CAFTA's environmental and commercial provisions. Harmful Anti-Environmental Suits. CAFTA's investor rules would undermine U.S. and Central American environmental standards by allowing foreign investors to challenge legitimate laws and regulations before international tribunals, bypassing domestic courts. In bringing these cases, foreign investors could demand monetary compensation for the implementation of legitimate environmental protections. For developing Central American countries, the simple threat of costly investor challenges could freeze adoption of environmental standards. Despite some incremental changes, CAFTA's investment rules are similar to NAFTA's Chapter 11, which has given foreign investors broad rights that do not exist under U.S. law. Both Mexico and Canada have lost Chapter 11 challenges to environmental protections, and the U.S. faces suits totaling more than $1 billion. Inadequate Environmental Safeguards. Central America faces daunting environmental challenges that jeopardize the region's capacity for sustainable development. Unfortunately, CAFTA's environmental rules are inadequate and would not ensure that environmental protection in Central America is improved in a meaningful way. Although environmental standards in Central America vary widely, CAFTA does not clearly require any country to maintain and effectively enforce a set of basic environmental laws and regulations. The agreement also does not include an enforceable set of standards for corporate responsibility on environmental (or any other) issues. Further, there is not even equal status between enforcement of environmental and traditional commercial provisions in CAFTA as was contained in the US-Jordan Free Trade Agreement. Finally, the CAFTA text fails to include any independent environmental cooperation institution. Citizen Submission Process and Enforcement. While the CAFTA text appears to make modest progress in some procedural areas regarding the environment, including the establishment of a citizen submission process to allege failures to effectively enforce environmental laws, the proposed process does not provide for any clear outcomes or actions to ensure environmental enforcement. Capacity Building. Given the numerous environmental challenges facing Central America, we believe that CAFTA should include a comprehensive program for environmental cooperation, capacity building, clear goals and benchmarks, as well as objective monitoring of environmental progress that is backed up by a dedicated source of grant funding and loans. Unfortunately, the agreement includes no such funding even though CAFTA would significantly reduce the resources Central American countries have for environmental protection by diminishing their tariff revenue. Threats to Food Safety and Other Standards. CAFTA does not ensure that food safety and other "sanitary and phytosanitary" standards would be adequate to protect public health and safety and the environment in the U.S. and Central America. These are critical issues to address in an agreement that will increase the volume of trade, particularly in produce and other agricultural goods, between the countries. In addition, the agreement's rules on services could undermine environmental safeguards in such critical sectors as water, forestry, waste transport, mining, and offshore oil development. Trade agreements should support, not undermine, environmental protection, human rights and labor standards. Regrettably, CAFTA could seriously undermine efforts to strengthen environmental protections in the U.S. and Central America.
If you have any additional questions, please contact:
Steve Mills
Martin Wagner
Sara Zdeb
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