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Executive Order 13, 141 and the Environmental Review of Trade Agreements

Published online by Cambridge University Press:  27 February 2017

James Salzman
James Salzman*
Affiliation:
Washington College of Law, American University
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American Journal of International Law , Volume 95 , Issue 2 , April 2001 , pp. 366 - 380
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Copyright © American Society of International Law 2001

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References

1 Environmental Review of Trade Agreements, Exec. Order No. 13,141, 64 Fed. Reg. 63,169 (Nov. 18, 1999) [hereinafter EO 13, 141].

2 See, e.g., North American Free Trade Agreement, Dec. 8, 1992, Can.-Mex.-U.S., Art. 104, 32 ILM 289 (1993) (describing relation to environmental and conservation agreements) [hereinafter NAFTA]; Agreement Concerning the Establishment of a Border Environment Cooperation Commission and a North American Development Bank, Nov. 18, 1993, 32 ILM 1545 (1993) (establishing U.S.-Mexico commission on environmental cooperation at border); North American Agreement on Environmental Cooperation, Sept. 14,1993, Can.-Mex.-U.S., 32 ILM 1480 (1993) [hereinafter environmental side agreement]. As discussed below, both the United States and Canada conducted environmental reviews for the NAFTA negotiations. These efforts also led to much closer coordination between trade, environment, and economic agencies within the federal governments.

3 42 U.S.C. §4332 (c) (1994) [hereinafter NEPA]. Under NEPA, the reviewing agency must first conduct an environmental assessment. If this results in a finding of no significant impact, then no further review is required. Otherwise, the agency must develop a draft EIS, distribute it for public comment, respond to classes of comments, revise it, and issue the final EIS.

4 David Hunterjames, Salzman, & Zaelke, Dukwood, International Environmental Law and Policy 366-67 (1998)Google Scholar (citing international agreements with environmental review requirements).

5 World Bank, Operational Directive 4.00, Annex A, Environmental Assessment (1989), as amended by Operational Directive 4.01, Environmental Assessment (1991). From 1989 through June 1995, over 1,000 World Bank projects underwent domestic environmental reviews. Kevin, R. Gray, International Environmental Impact Assessment: Potential for a Multilateral Environmental Agreement, 11 Colo. J. Int’l Envtl. L. & Pol’y 83, 107–08 (2000).Google Scholar

6 See, e.g., Hunter, Salzman, & Zaelke, supra note 4, at 1473–74 (describing the Planafloro project in Brazil). The review requirement, however, has not led to the capacity building its proponents had hoped for. See infra note 45.

7 See, e.g., Hunter, Salzman, & Zaelke, supra note 4, at 366-69 (1998) (citing a United Nations Environment Programme (UNEP) Governing Council decision, a European Community Council directive, the Legal Experts Group of the World Commission on Environment and Development, and precedent); see also Gray, supra note 5, at 91 (citing die declaration in the UN General Assembly’s Programme for Further Implementation that environmental impact assessment is a principle “equivalent with the ‘polluter-pays principle,’ ‘the precautionary principle,’ and the ‘common but differentiated responsibilities principle’”).

8 Office of the U.S. Trade Representative [USTR], Draft Review of U.S.-Mexico Environmental Issues (1991); USTR, Review of U.S.-Mexico Environmental Issues (1991). The final version was released in February 1992. Interagency Task Force Coordinated by the Office of the United States Trade Representative, Review of U.S.-Mexico Environmental Issues (1992).

9 NEPA does not require review of trade agreements. Public Citizen v. Office of USTR, 5 F.3d 549, 553 (D.C. Cir. 1993), cert, denied, 510 U.S. 1041 (1994) (holding that NEPA’s requirements did not apply both because the president’s signature of the trade agreement was not final agency action and because the president is not an agency). USTR did, however, follow many of the NEPA procedures, including soliciting public comment, holding public hearings in six cities, and issuing a draft report for further comment.

As Professor Daniel Esty, who headed the involvement of the Environmental Protection Agency (EPA) in NAFTA, later observed, “The review identified opportunities and vulnerabilities we could address in the context and framework of the negotiations. It gave us a chance to highlight issues for the negotiators at a time in the process where something could still be done about them.” Personal e-mail from Professor Daniel Esty, Yale Law School, to author (Sept. 15,2000). For further background on the NAFTA environmental review, see Audley, John, Green Politics and Global Trade: Nafta and the Future of Environmental Politics (1997)Google Scholar; Pierre-Marc, Johnson & Beaulieu, Andre, The Environment and NAFTA: Understanding and Implementing the New Continentaj .Law (1996).Google Scholar

10 Prior to EO 13,141, USTR had also conducted environmental reviews of the Uruguay Round and the accelerated tariff liberalization initiative with respect to forest products. Commission for Environmental Cooperation, Methods and Approaches to Assessing the Environmental Effects of Trade Policies 10 (1999)Google Scholar [hereinafter CEC Report].

11 Government of Canada, North American Free Trade Agreement: Canadian Environmental Review (1992); Government of Canada, Uruguay Round of Multilateral Trade Negotiations: Canadian Environmental Review (1994).

12 Commission of the European Communities, 1992: The Environmental Dimension (1992).

13 The methodological development and scoping phases have already been completed. While welcoming the initiative, nongovernmental organizations (NGOs) have called it inadequate and demanded that the review examine the impacts of the Uruguay Round agreements, require assessments for all trade agreements involving the European Union, and provide resources for developing countries to conduct their own assessments. Joint NGO Statement on the EU Sustainability Impact Assessment of WTO Trade Liberalization (Feb. 23, 2000) (on file with author). For executive summaries of the progress to date and the contractor’s reports, see <http://europa.eu.int/comm/trade/miti/envir/sia.htm> (visited Apr. 19, 2001).

14 At the third session in 1995, for example, the CSD’s final report “encourages Governments to develop or strengthen processes to assess the environmental effects of trade policies . . . and promote transparency and openness to the public in these processes.” United Nations Commission on Sustainable Development, Report on the Third Session (11-28 April 1995), UN Doc. E/CN.17/1995/36-E/1995/32,para.69.The most recent session, in April 2000, similarly called for assessments that can “anticipate potentially adverse scale effects of trade liberalization and, where possible,... avoid ormitigate such effects through appropriate environmental policies.” United Nations Commission on Sustainable Development, 8th Session, 24 April-5 May 2000, Report of the Secretary-General on Economic Growth, Trade and Investment, UN Doc. E/CN. 17/2000/4, para. 32 [hereinafter CSD Report], at<http://www.un.org/documents/ecosoc/cnl7/2000/ecnl72000-4.htm>.

15 In 1993 the OECD Ministerial Council recommended that governments should “examine or review trade and environmental policies and agreements with potentially significant effects on the other policy area early in their development to assess the implications for the other policy area and to identify alternative policy options for addressing concerns.” OECD, Methodologies for Environmental and Trade Reviews, Doc. OCDE/GD(94)103, at 5. See further OECD, Assessing the Environmental Effects of Trade Liberalisation Agreements: Methodologies (2000)Google Scholar (presenting reports from an OECD workshop on lessons from past reviews, initiatives for future assessments, modeling, timing, participation, and other issues). See generally Nordic Council, Environmental Assessment of Trade Agreements and Policy (1998)Google Scholar (presenting reports on environmental reviews to date and model approaches).

16 For UNEP/UNCTAD projects, see CSD Report, supra note 14, para. 32.

17 The first serious discussions on drafting an executive order had started in 1998, when the U.S. government had to decide whether to endorse an OECD policy paper on environmental reviews. Disagreements over the role of reviews finally made their way up to the National Economic Council in 1999, which asked the Council on Environmental Quality, USTR, and EPA to write a white paper on the issue. Conflict over the role of reviews continued until the upcoming Seattle ministerial meeting forced action on the issue.

18 EO 13,141, supra note 1, §1.

19 Id. §6 (subject to approval by the Office of Management and Budget).

20 Id.§4(c).

21 Id. §5(b). In Appendix C §IV(G), the guidelines define global impacts to include impacts on places not subject to national jurisdiction or to shared jurisdiction, those on migratory species, and those relating to environmental problems identified by the international community as having a global dimension or otherwise of concern to the United States. While quite broad, this definition does not include impacts solely in foreign nations. 65 Fed. Reg. 79,442 (Dec. 19, 2000) [hereinafter Guidelines].

22 Guidelines, supra note 21, §111 (A) (3).

23 Id. §V(B)-(D) (for alternatives considered). The guidelines elaborate on this requirement, calling for analysis of environmental, regulatory, scale, structural, and product impacts. Id., App. C §§I-IV.

24 EO 13,141, supra note 1, §7.

25 See, e.g., Friends of the Earth: Congress Passes Anti-Environmental China Trade Deal, U.S. Newswire, May 24, 2000 (criticizing approval of permanent normal trade relations because “the trade deal fails to promote the export of clean, renewable energy technology to China”), at LEXIS, News Group File, Most Recent Two Years. 26 With the support of many developing countries, Iceland, Australia, New Zealand, the Philippines, and the United States have called for a WTO agreement to reduce fishery subsidies. Reducing overcapacity would arguably lead to higher seafood prices and less pressure on already stressed fisheries. This proposal received strong support at the Seattle ministerial meeting and might well have been adopted had talks not broken down over agriculture. Thorir Ibsen (Iceland Ministry for Foreign Affairs), Sustainable Fisheries: The Linkages with Trade and Environment, 4 Linkages J. (May 28, 1999), at <http://www.iisd.ca/linkages/journal/ibsen.html>.

27 Statement by Friends of the Earth Concerning Draft Guidelines for Environmental Reviews of Trade Policy Under Executive Order 13,141 (Aug. 2, 2000) (on file with author).

28 The TPSC was established by section 242 of the Trade Expansion Act of 1962, as amended, 19 U.S.C. §1872 (1994).

29 The International Trade Commission can also become involved when requested to report on the projected impacts of a specific trade issue. The commission held hearings, for example, on the economic impacts of NAFTA.

30 Brian, J. Schoenborn, Public Participation in Trade Negotiations: Open Agreements, Openly Arrived At? 4 Minn. J. Global Trade 103, 104 (1995)Google Scholar (citation omitted).

31 The trade advisory committee system was created by the Trade Act of 1974. The three tiers of committees, composed of civil-society representatives, are routinely consulted, but their influence, particularly on environmental issues through the Trade and Environment Policy Advisory Committee, has been limited. Informal consultation, of course, has long taken place with traditional business constituencies and is now regularly engaged in with NGOs as well. See 19 U.S.C. §2155 (1994).

32 As a result, Public Citizen bluntly predicted at the time of the EO’s issuance that the end product would simply become “a meaningless insider review.” Connolly, Ceci, U.S. to Give Trade Pacts Eco-Review, Wash. Post, Nov. 17, 1999, at E1 Google Scholar. Presumably, other NGOs do not share this severe assessment, though, or they would not be so active.

33 See, e.g., Daniel, A. Seligman, Environmental Review of Trade Agreements: Draft Comments on Guidelines Implementing Executive Order 13, 141 (Aug. 2, 2000)Google Scholar (on file with author).

34 Executive Order 12,114’s treatment of classified information provides a model worth considering. When shipping radioactive waste, to avoid disclosing the shipping route (which could be of significant interest to terrorists or environmental activists) agencies have held it as a classified document until after the shipment. But they have still written a supplemental EIS prior to shipment. In such cases, the agency has considered the impact of alternative actions but held the document internally until after the shipment and offered no opportunity for public comment This compromise facilitates the government’s consideration of environmental impacts while respecting the need for secrecy. See, e.g., Greenpeace USA v. Stone, 748 F.Supp. 749,754 (D. Haw. 1990) (describing the process of classifying the assessment document); Environmental Effects Abroad of Major Federal Actions, Exec. Order No. 12,114, 44 Fed. Reg. 1957 (1979).

35 An additional challenge to examining alternatives is that the “no action” option does not equal the status quo, since breaking off trade negotiations may strain diplomatic relations and make environmental cooperation worse than before. See CEC Report, supra note 10, at 25.

36 It is worth noting that the economic modeling of trade agreements described above is generally not published so as to avoid tipping off negotiating positions.

37 The regulations of the Council on Environmental Quality call for an EIS to be prepared at the time of a proposal—“that stage in the development of an action when an agency subject to the Act has a goal and is actively preparing to make a decision on one or more alternative means of accomplishing that goal and the effects can be meaningfully evaluated.” 40 C.F.R. 1508.23 (1999).

38 In determining what is “appropriate and prudent,” for example, the guidelines require consideration of the scope and magnitude of global and transboundary impacts, but also the implications for U.S. international commitments and programs, data availability, and “diplomatic considerations.” Most of the factors determining the appropriateness of review (1) are not environmental, and (2) discourage review. Moreover, the definition of “transboundary and global impacts” specifically includes places “not subject to national jurisdiction.” Combined with the presumption in favor of considering domestic impacts, this provision likely excludes impacts in foreign jurisdictions from consideration unless they cause transboundary impacts in the United States. See Guidelines, supra note 21, §TV(B)(5)(2). Interestingly, Canada’s draft review procedures are even narrower, focusing on impacts only within Canada.

39 See, e.g., Rio Declaration on Environment and Development, June 14, 1992, Principle 12, 31ILM 874 (1992) (stating that” [u]nilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided”).

40 “Jordan’s 4 million consumers will never be anything but a blip on the U.S. economy’s radar.” John Maggs, The Jordan Difference, NAT’LJ., Sept. 2, 2000, at 27, 27.

41 See text at note 43 infra.

42 While not seriously discussed during the drafting of EO 13,141, a fifth category of impacts has been focused on in European environmental reviews—social impacts. NGOs commenting on the EU sustainability impact assessment have called for further analysis of trade impacts on children, indigenous peoples, and women in both developing and developed countries. As discussed below, developing countries have echoed these calls, see text at note 53 infra.

43 World Wildlife Fund, Developing A Methodology for the Environmental Assessment of Trade Liberalisation Agreements, para. 3.19 (1999) (on file with author).

44 The NAFTA review, for example, is firmly agnostic in predicting specific environmental impacts, noting

that as NAFTA obligations alter relative prices in the agricultural sector, changing the use of agricultural inputs such as pesticides, labor and land, as well as the ratio of input mixes [, ] such changes “can improve or worsen” water quality, soil erosion, soil productivity, biodiversity, wildlife habitat, food safety and worker health.

CEC Report, supra note 10, at 28 (quoting The NAFTA: Report on Environmental Issues 83 (Office of the President PREX 1.2:N82/2, 1993)Google Scholar).

45 In a study of thirty-five environmental impact assessments carried out by African nations for the World Bank, for example, researchers found that “the public participation requirements were not followed in any case and more than one half of the projects failed to allow for public participation.” Gray, supra note 5, at 110 n.141.

46 Robert V. Percival, Schroeder, Christopher, Miller, Alan, & Leape, James, Environmental Regulation: Law, Science and Policy 1179 (2d ed. 1996).Google Scholar

47 Putnam, Robert, Diplomacy and Domestic Politics: The Logic of Two-Level Games, 42 Int’l Org. 427 (1988).CrossRefGoogle Scholar

48 Gray, supra note 5, at 105 (citation omitted) (adding that, “[a]s a result, a watered-down version was agreed to calling for rational planning to be an essential tool to reconcile development and environment needs”; id. at 105-06.

49 World Wildlife Fund, Conclusions of the Chair: International Experts Meeting on Sustainability Assessment of Trade Liberalisation, Annex 2, para. 1.1 (2000) (on file with author).

50 Id., Annex 1, para. 3.1.

51 In many ways, this conflict parallels the debate over implementation of sustainable development, in which developing countries express wariness of environmental protection at the expense of development. Hence the proposals at numerous international meetings to rename the goal as “sustainable economic development.” See Joel, B. Eisen, 1999, from Stockholm to Kyoto and back to the United States: International Environmental Law’s Effect on Domestic Law, 32 U. Rich. L. Rev. 1435, 1462 (1999).Google Scholar

52 With the exception of Japan, for example, the governments of the three other leading economies (Canada, the European Union, and the United States) already conduct reviews.

53 Committee on Trade and Environment, Environmental Review of Trade Agreements at the National Level, Communication from the United States, WTO Doc. WT/CTE/W/37 (July 23,1996), a«http://docsonline.wto.org/gen_home.asp>. It states:

11. In view of the recommendations by international bodies and the experience which has been gained on environmental assessment in general and for trade agreements in particular, . . . CTE Ministers should recommend that national governments carry out environmental reviews of trade agreements likely to have significant environmental effects, as part of the process of developing such agreements.

54 This stance is consistent with developing countries’ long-standing concern that developed countries focus too much on the environmental, and not enough on the economic, aspects of sustainable development. See supra note 51.

55 The conference also called on an array of UN agencies—UNEP, UNCTAD, UNDP, the World Health Organization, the International Labour Organization, and the Commission on Sustainable Development—to provide analyses of the environmental, developmental, social, and regulatory effects of the Uruguay Round agreements. World Wildlife Fund, Initiating an Environmental Assessment of Trade Liberalisation in the WTO, para. 6.5(1999) (on file with author). NGOs have supported these demands as well, calling for an expanded scope of research far beyond environmental impacts, including the effects of trade liberalization on “income level and distribution, cultural and gender issues (such as impacts on the sexual division of labour, women’s role in and access to trade).” Id., para. 5.6.