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American Rivers | Center for International Environmental Law | Defenders of Wildlife | Earthjustice | Friends of the Earth | National Environmental Trust | National Wildlife Federation | Sierra Club | U.S. Public Interest Research Group April 13, 2005 Re: Oppose the Central American Free Trade Agreement (CAFTA) Dear Member of Congress: On behalf of our millions of members, we urge you to oppose the free trade agreement with Central America and the Dominican Republic (CAFTA-DR). The agreement's lack of adequate environmental provisions threatens human health and natural habitats in one of the world's most environmentally sensitive and biologically rich regions. In addition, CAFTA-DR would undermine hard-won environmental protections by allowing foreign investors to challenge environmental laws and regulations in all of the countries, including the U.S., that are parties to the agreement. Inadequate environmental provisions fail to protect Central America. Central America faces significant environmental challenges. In its environmental review of CAFTA-DR, the Bush administration itself acknowledges that trade and investment resulting from the agreement could make people's air and water more unhealthy and cause further habitat loss in a region that has already lost 70 percent of its forest cover. Unfortunately, CAFTA-DR's environmental provisions are inadequate, contain numerous loopholes, and would not improve environmental protection in one of the planet's most biodiverse regions. CAFTA-DR does not clearly require any country to adopt and maintain a set of basic environmental laws and regulations. Further, the agreement's lack of parity between enforcement of commercial and environmental provisions represents a clear step back from the U.S.-Jordan Free Trade Agreement. Given the numerous environmental challenges facing Central America, CAFTA-DR should include a comprehensive program for assisting these trading partners to protect the health of their citizens and the natural resources they need for sustainable development. The agreement should be accompanied by firm commitments to meet the capacity building needs of these countries, to steadily strengthen and harmonize their legal protections for the environment, backed up by a permanent, dedicated and adequate source of new funding not taken from already existing programs. Unfortunately, the agreement includes no such funding. The recently appended Environmental Cooperation Agreement fails to ensure anything more than the establishment of a multi-agency commission without even a required mandate for specific cooperative activities to improve environmental protection. And although CAFTA-DR establishes a citizen submission process to allege enforcement failures, it does not provide for any clear outcomes or actions to actually ensure that citizens of the region can achieve enforcement of environmental laws. The citizen submission process' lack (continued) of enforcement tools contrasts starkly with the monetary compensation that private investors can demand of governments under CAFTA's investor rights rules. Investor suits threaten environmental laws, fail to meet Congressional 'no greater rights' mandate. CAFTA-DR's investor rights rules would undermine environmental laws and regulations in participating countries by allowing foreign investors to challenge environmental and public health standards before international tribunals, bypassing domestic courts. Using these rules, foreign investors would be able to demand compensation for the implementation of legitimate environmental protections. The threat of these challenges could discourage the further development of much needed environmental standards, especially for developing Central American countries and the Dominican Republic. CAFTA-DR's investment rules are similar to NAFTA's Chapter 11, which has given foreign investors broad rights that do not exist under U.S. or other countries' laws. Under NAFTA's rules, Mexico and Canada have lost Chapter 11 challenges to domestic environmental laws and the U.S. has already spent millions defending itself against claims totaling more than $1 billion. The Trade Act of 2002 requires that trade agreements give foreign investors "no greater substantive rights" than U.S. citizens have under U.S. law. However, CAFTA-DR would still provide foreign investors with rights to challenge environmental protections that go far beyond the rights provided under U.S. law. For example, the agreement ignores a number of key principles from U.S. Constitutional law, allowing foreign investors to assert that environmental laws have caused an "indirect expropriation" of their business interests or have violated a "minimum standard of treatment" in a wide range of circumstances that would not be compensable in U.S. courts. Further, CAFTA-DR goes beyond NAFTA to allow foreign investors to challenge any aspect of government decisions about natural resource agreements, such as federal oil, gas, and mineral leases. Agriculture provisions threaten environment. One of CAFTA-DR's most significant impacts is likely to be the dumping of heavily subsidized U.S. agricultural products on Central America, a practice that under NAFTA drove small-scale farmers off their land and impoverished many others. In Mexico, this forced many small farmers to clear-cut forest areas to provide increased farming opportunities or replacement sources of income, while industrial farms have increased the levels of nitrogen and other pollution. Under CAFTA-DR, impacts for the millions of Central American small farmers whose livelihoods depend on the agricultural sector are likely to be similarly harmful. Intellectual property rules threaten biodiversity. CAFTA-DR's intellectual property rules, which go beyond World Trade Organization requirements, could threaten the region's biodiversity and put the rights of small farmers and indigenous people at risk. By requiring the patenting of a wide range of life forms, the agreement creates potential conflicts with the Convention on Biological Diversity and could limit the ability of small farmers to maintain traditional practices, such as seed saving, which help protect and sustain agricultural biodiversity. In addition, CAFTA-DR could impede efforts to ensure that the origins of traditional community knowledge utilized in seeds and medicinal treatments are fully acknowledged and appropriately compensated. (continued) Trade agreements should encourage, not undermine, environmental protection. Unfortunately, CAFTA-DR not only fails to foster environmental progress but threatens existing environmental laws and regulations in the U.S. and Central America. We urge you to oppose CAFTA-DR. Sincerely,
S. Elizabeth Birnbaum
Daniel Magraw
Wm. Carroll Muffet
Marty Hayden
Sara Zdeb
Kevin S. Curtis
Paul L. Joffe
Debbie Boger
Anna Aurilio
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