From: gibbon@acs.bu.edu (EcoDefender)
Newsgroups: alt.org.pugwash
Subject: Much Adu about Nafta
Date: 26 Jan 93 16:13:08 GMT
Distribution: USA
Organization: Boston University, Boston, MA, USA
Originator: gibbon@acs.bu.edu


    This is a lengthy paper I wrote about NAFTa.  Alas since it
was written on a mac the Spacing has gone ary, if you are interested
in it, you can down load it and reflow it in your favorite editor
WP or Mac based systems will merely need to change it to a nice
tight font (time 12 sohlud work)  I though I had size it properly
 ubt that doesn't seem to be the case.
If you find this paper too annoy to read (either for the formatting or
the styl I suggest you still may wish to raid my bibliography because
many of the resources are available on the net and I have documented
them)         


     Unsustainable Development:
Free Trade or Transnational Omnibus of Ecological Devastation




				Peter Kahn
                                                gibbon@acs.bu.edu

----------------------------------------------------------------------
Abstract


	The following paper is an analysis of the North American Free Trade 
Agreement.  It looks at the underlying reasons for free trade and the pros and cons of 
using regional blocks to achieve this goal.  Since the NAFTA treaty proclaims that it 
adheres to the theory of sustainable development, the paper also focuses some 
attention on this theory.  

	The actual treaty is studied and summarized for its merits in promoting free 
trade.  It is also critiqued for its failures in the areas of health, safety, and 
environmental protection.  MexicoUs role as a partner of the US is studied in regards to 
its economy, environment, and its policies.  Finally this paper looks at the options and 
constraints that the three Presidents have to modify the agreement.

----------------------------------------------------------------------
Introduction
	This fall the US, Mexican, and Canadian delegations finished their 
negotiations on the new North American Free Trade Agreement (NAFTA).  The 
underling rationale for this agreement has much to do with the globalization of national 
economies.  NAFTA firmly commits these three nations to a path of regional 
integration in the hopes of coping with the new challenges of this globalization.  The 
agreement has been hailed as an historic achievement by the Mexican and American 
administrations while numerous non-governmental organizations (NGOs) have 
declared it a tool for the systematic exploitation and destruction of the environment on 
a continental scale by transnational corporations.  This paper examines the reasons 
behind NAFTA and its effects on the regionUs environmental and development issues.  

	Sources for this document were primarily retrieved electronically through the 
use of the NEXIS information system and the global network known as the Internet.  
The documents included proposed additions and modifications to NAFTA as well as 
the General Agreement on Tariffs and Trade (GATT) made by various non-
governmental organizations, as well as official summaries and briefs from the US 
government and information from various international news services.  It is important 
to note that due to the system of electronic retrieval the layout may not be the same as 
in the original documents, because of this fact section names and other references have 
been given in lieu of page numbers were appropriate.

	In the first section of this paper the theoretical framework behind regional 
integration and free trade is discussed.  The section focuses on the linkages between 
technology and the globalization of national economies.  It also evaluates the merits 
and problems of using a regional as opposed to multilateral approach to achieving 
global free trade.  Since the NAFTA treaty commits itself to the theory of sustainable 
development the latter part of this section investigates the facets of this theory.

	The next part of the paper deals with whether the agreement actually achieves 
its stated goals of sustainable development and environmental protection.  In this 
section the paper looks at the actual agreement, with its various sectoral provisions.  
The analysis is not limited to the agreement, but also includes the process of 
negotiation and MexicoUs strengths along with its weaknesses as a potential partner.  
After which the paper focuses on three areas where NAFTA is either weak on 
environmental protection or poses an out right environmental threat: sanitary and 
phytosanitary standards, technical barriers to trade, and dispute resolution.  In the 
conclusion of this paper various problems and potential solutions of the NAFTA treaty 
are analyzed.  Along with the political and economic limitations structure the choices 
of the NAFTA member states.
	

----------------------------------------------------------------------
Discussion

1.0 The Globalization of National Economies:
	Currently, a debate is raging in the circles of high economics and policy that 
will profoundly effect life on earth and the course of human development.  This debate 
centers around the argument of whether globalization of national economies is a good 
or bad event as it relates to economic, human, and environmental welfare on a 
planetary scale.  Views on this issue range from those who feel that this greater 
freedom in trade is equivalent to the second coming to those who feel it is yet another 
in a long serious of steps where the rich, through their transnational corporations, 
control and oppress the poor.  In truth the complexity of the issues involved allow for 
well supported arguments across the range, but in some sense these arguments are 
fairly irrelevant.  The globalization process is firmly linked to the current and future 
stages of human technological development and is therefore irreversible if we are to 
continue to use these new technologies such as computers, microelectronics, flexible 
manufacturing, telecommunications, and biotechnology.  Also, a great deal of this 
globalization has already occurred, and any attempt to bring back trade barriers would 
be very painful to all the involved states.1  In order to look into this debate it is 
necessary to give some background on what this globalization means, where it has 
come from, and where it is going.

	The forces that have created an incentive for economic globalization are three 
fold: deregulation, an increase in global communication, and technological advances.  
What began with President NixonUs commencement of the Bretton Woods accord, 
which gave structure and national control to the international monetary system since 
World War II, and continued with the rampant deregulation of the conservative 1980's 
led to the free flow of international capital.  The freedom of capital movement has risen 
to such a state, that individual nations cannot control their own currencies, as evident 
in the crises for the European CommunitiesU policy of Economic and Monetary Union 
(EMU) in the fall of 1992.  The U.K., Spain, Portugal, and Italy all were forced either 
to devalue their currencies or to leave the EMU; meanwhile, France was partially 
protected by the heroic and costly efforts of the German Bundesbank.  It is difficult, if 
not impossible, to determine precisely how much capital is moving on the worldUs 
currency markets, and control of this capital is even more tenuous.

	Since the early 1980's there have been vast improvements in 
telecommunications and computer technologies, so much so that for the developed 
nations, and to some extent, the less developed countries, the global tele-village is 
now a reality.  This means that a good share of the worldUs population has some kind 
of access to a global network of instantaneous communication, either by television, 
radio, computer networks, telephones or fax machines.2  The access to this has 
fundamentally altered the consumersU demands for quality goods.  Throughout the 
Ford Motor CompanyUs history, especially in its beginnings, defects and recalls of 
automobiles have been common.  This is evident by ToyotaUs reaction to its tour of 
Mr. FordUs production line during the 1930's and more recently to the fiasco with the 
poor design of the Ford Pinto,  in which the gas tank could explode during rear 
impacts at even moderate speeds.  The average consumer of the 1930's or even the 
1950's had no knowledge that a company like Toyota was manufacturing products 
which did not suffer these problems.3  Part of the crisis of the Big three American auto 
manufacturers, and that of many American manufacturers during the last twenty years 
has been due to the prevalence of information technology, and that now the average 
consumer is armed with current information on the quality of various products from 
around the world.  This has the effect of forcing corporation to harmonize their heavy 
and light products upwards with quality, features, and new technological advances in 
order to keep their consumers.  This phenomenon spurs yet another force globalizing 
national economies.

	The upward harmonization leads towards two interwoven factors an increase 
in complexity of various products and a decrease in the product cycle driven by the 
rate of technological advancement.  The costs of research and development (R&D) 
have risen to great heights, and the risks have risen even faster due to the shortened 
time span allotted to recoup the development costs.  The risks for many goods are 
beyond the ability of any one firm, and in some cases any one national market, to 
develop new products.  In the production of new aircraft for increased Pacific rim 
travel, Boeing has entered into several strategic alliances with various Japanese firms 
to spread the risk and costs of development.4  Apple computer has had a long alliance 
with Sony, recently culminating in the development of the new Macintosh Notebook 
line of laptop computers.

	National markets do not possess capital or risk compensation measures large 
enough to handle the creation of new high-tech products or processes, especially 
biotechnology.  The various strategic alliances and joint ventures, such as the 
European consortium of Airbus, are linked to the technological and economic 
development of a nationUs economy and of its firms.  Without these international 
agreements no nation could afford to maintain an edge in its technological prowess, 
and this would lead to the loss of its competitive advantage.5

1.1 Pathways to Global Free Trade:
	The arguments in favor of economic globalization are currently split into two 
camps.  On one side there are those who favor the ideal of free trade on a multilateral 
venue.  The idea is that through the use of truly international accords such as the 
GATT, and institutions such as the International Monetary Fund (IMF), the world will 
eventually drop all barriers to trade.  The problem with this view is that currently the 
latest round of the GATT has been growing old for several years while a squabble 
over agricultural subsidies has effectively stalled the agreement.  There are those who 
argue that there are simply too many actors in this system and that it is doomed to 
failure.6  It is as if the political system of the entire United States was run by the true 
direct democracy of a Vermont town meeting with no internal subsystems to pool 
responsibility, resources, and decision making.  250,000,000 people would all 
struggle against one another to achieve their goals, and would in tern achieve nothing.  
Thankfully, within the American political system there interlocking subsystems at the 
federal, state, county, and township levels.  If subsystems allow for the mediation of 
disputes in a more efficient manner than direct democracy within the nation state, then 
this view states, they should work equally as well on the international level.

	The regional trade block is an attempt to bring about free trading with the 
proper subsystem control.  Regional coordination such as that of the EC has clearly 
shown how this can be more effective than cooperation on the international level even 
in non-economic areas such as drug trafficking, environment protection, and the 
control of terrorism.7  As these blocks develop, they can allow regions to make 
decisions with one voice as in the Common Agricultural Policy of the EC.  This 
common voice may translate into easier negotiations of global accords, due to the 
reduction of actors.  But while the voices of five or ten regional blocks may be fewer 
than the 150 currently working at what is left of the Uruguay round of the GATT, they 
would be more inclined to disagree.  This is based on two factors, one being a blockUs 
belief that it can prosper without the other members of the international system, due to 
the size of the blockUs markets and its resources.  The other factor is that with fewer 
blocks, there is a greater chance of conflict due to higher integration of the blocks.8 
 
	There are those theorists who fear the emergence of regionalism will lead the 
world back to the policies of the 1930's, when regional agreements choked off world 
trade and contributed to the genesis of a world war.  But this view ignores several 
pertinent factors.  First, the regional blocks of today are highly inter-linked, so that 
they cannot afford the creation of trade barriers.9  Today world trade accounts for 
close to one fifth of total global GNP, far more than it was during that period.10  

1.2  The Goals of Sustainable Development:
	The Globalization of economies is irreversible at this point, but this doesnUt 
mean that it is morally just or sustainable in the long run.  Unrestrained capitalism can 
make life just as Rnasty brutish, and shortS as extreme protectionism.  Nor will simple 
free trade Rbring increased prosperity...for the citizens of each of our countries,S as 
Mr. Bush has stated.11  For this to occur the pledge to the theory of sustainable 
development uttered in the NAFTA preamble must be adhered to by the actual text of 
the treaty.

	Sustainable development is based on three main ideas; the first being that all 
economic activities must be geared towards the creation and maintenance of 
ecologically and socially balanced communities.  This means that issues ranging from 
working conditions to land use and resource extraction must be based on equity not on 
deriving competitive advantage through RunhumaneS or unsustainable practices.12

	Currently many developing nations are saddled with external debt, which 
places them at the mercy of the IMF and therefore erodes their sovereignty.  Also 
when imports from these nations begin to compete in the markets of the developed 
countries thinly disguised forms of protectionism, such as voluntary export 
restrictions (VERs) and anti-dumping actions, have been utilized.13  Advocates of 
sustainable development champion improvements in the fairness of free trade, with the 
elimination of the dumping of first world products in third world markets while these 
same nations drop their barriers to third world exports.  Also the idea of setting up 
mechanisms to aid in the creation and enforcement of environmental and health 
standards in developing countries as well as mechanisms to manage trade and 
production in natural resources are supported.14

	Beyond trade fairness, this school supports the elimination of environmentally 
and socially destructive trade.  This is achieved through democratic control as opposed 
to market based control at all levels.  Within the nation state, land reform policies that 
offer equity in access and ownership are necessary.  At the level of multilateral 
agreements all negotiations and dispute mediations must occur in an open and 
democratic manner.  The gap between the producers and consumers of commodities 
must be closed to ensure sustainable use policies.  Many current trade agreements, 
such as the GATT, can declare a standard or regulation designed to protect the health 
or welfare of the citizens or environment an unfair barrier to trade.  The GATT even 
places the burden of proof on the defending country.  Any agreement based on 
sustainable development requires not only the protection of these standards as long as 
they do not arbitrarily discriminate against similar products or processes on the basis 
of national origin, but also the shifting of the burden of proof to the challenger.15
2.0 NAFTA and Sustainable Development

	The North American Free Trade Agreement will unify the markets of the US, 
Mexico and Canada at the expense of the environment and the citizens of its member 
states.  The treatyUs text turns the promises of its preamble into a cruel joke.  There are 
flaws inherent to the structure and negotiation process that have made this a very 
dangerous tool of exploitation.  The issues of environmental protection and sustainable 
growth within NAFTA must be preceded by a look at what the treaty actually 
accomplishes.

	NAFTA will create a vast market of 360 million people and 6 trillion dollars.16  
The three parties to the agreement will gradually phaseout all tariffs and reduce non-
tariff barriers.  Mexican tariffs, which are currently two and a half times higher than 
those of the US will immediately be eliminated or phased out within five to ten years.  
Some 65 US industrial and agricultural exports will have unimpeded access to 
Mexican markets within five years at the latest.  Certain sensitive sectors will be 
governed by a 15 year phaseout schedule.17

	In order to make sure that the main beneficiaries of the agreement are NAFTA 
members, only goods with a certain percentage of North American content will receive 
preferential tariff treatment.  The highest level of required North American content is in 
passenger automobiles with 62.5%.18  Traces through the production chains of 
automotive goods will be used to ensure the content accuracy.19  This will guarantee 
that the value added parts are of North American manufacture.

	In the textile and apparel sectors restrictions on more than 20% of US exports 
to Mexico will be eliminated immediately with an additional $700 million of exports 
receiving a tariff free entrance into the Mexican market by 1996.  Also, Mexico 
currently imports some $3 billion of agricultural goods from the US, and is its the 
third largest market.  Mexican import licenses, which affected 25% of US agricultural 
exports in 1991 will be eliminated with the passage of the treaty, and the remaining 
tariffs will be phased out over a 15 year period.20

	Substantial gains will be found in the opening of the 6 billion dollar Mexican 
telecommunications market.  Full non-discriminatory access and the elimination of all 
investment restrictions will be achieved by 1995.21  The insurance sector provides 
additional opportunities, with a relaxation in ownership restrictions on current and 
future joint ventures.  This is supplemented by liberalization in the Mexican investment 
market with an end to domestic content rules and discriminatory treatment of US firms 
operating in Mexico.  The practice of export performance requirements, where an 
investing corporation is forced to export as a condition of that investment, will also be 
eliminated under NAFTA.22

	The treaty also provides for safeguards for the economic, human, and 
environmental health of the parties.  NAFTA members are permitted to reimpose trade 
barriers during a surge of imports.23  This will allow the states to protect their 
industries from massive flowing of exports from both third countries and NAFTA 
members.  The Bush administration feels that the dislocation of works due to NAFTA 
will be small, with around 150,000 requiring adjustment assistance.  Mr. Bush has 
allotted $10 billion for the comprehensive retraining of these workers.24

	On the issue of environmental and health protection there are several 
supporting arguments for the NAFTA position that economic prosperity will drive 
environmental prosperity.  First it has been theorized and proven in the case of 
Brazilian industries that cleaner and safer production processes lead to greater 
international competitiveness.  It is possible that the interaction of the Mexican 
industry with that of the US and Canada will force the Mexicans to operate with a 
higher level of environmental protection.  Also the NAFTA treaty encourages a high 
amount of cooperation between the US Environmental Protection Agency (EPA) and 
the Mexican equivalent,  the Secretaria de Desarollo Urbano y Ecologia (SEDUE).  
However it must be noted that encouragement is not action and that there are grave 
problems with the process of the NAFTA negotiations and its product.
2.1 Problems with Mexico as a Regional Partner

	In order to determine how any provisions in NAFTA will work it is necessary 
to look at the state of the Mexican economy, environment, and policy implementation.  
In regard to the Mexican economy, President Salinas and his Ministers have made 
great strides in its liberalization and growth in the recent years.  During the 1980's 
with the fall in oil prices and the rapid population growth, Mexico accumulated a high 
foreign debt, which in 1990 stood at $96.0 billion.25  Since the mid 1980's the 
Mexican economy has been opened up with a decrease in tax rates, along with a 
massive privatization of industry.  Mexico pulled its inflation down to 20% and is 
predicted to have a public sector surplus in 1992.  Mexico has been experiencing a 
massive influx of capital as the capital flight of the past is undone.  In a six month 
period the inflow of capital was close to $10 billion.  This has expressed itself in a 
39% increase in the value of imports of capital goods while in consumer goods sector 
there has been a 19% rise.26  

	In 1990 the Mexican GDP was at $236 billion with a real growth rate of 3.9% 
and in 1989 the industrial growth rate at 5.3% which accounted for 27% of the 
GDP.27  The Mexican economy is fairly robust, but Mexico is not a thriving Korea 
south of the border.  75% of the capital investment has gone into portfolios that can be 
easily liquidated, not into factories.  This means that if confidence falters in the 
Mexican government or economy it could lead to a massive and speedy reversal of 
fortune.28  Mexico needs NAFTA to ensure the irreversibility of its prosperity.  Also, 
this economic growth has not come hand in hand with a robustness in the 
governmentUs vigor to protect its environment or the health of its citizens.  

	In July 17, 1990 a hydrosulfuric acid plume was released by a chemical plant, 
which luckily caused no fatalities, but led to the evacuation of an unknown number of 
people.  Under the La Paz agreement, which set up a free trade zone along the US-
Mexican border, the Mexicans were supposed to notify the EPA and to mobilize the 
Bi-national Joint Response Team, neither of which occurred.  The US EPA was 
informed about the incident by a US NGO a couple hundred miles to the east of the 
site.  In January of 1992 the same plant forced the evacuation of thousands and injured 
close to forty people.  Again the Mexican officials were lax with regard to their 
obligations under the La Paz agreement, and this time the NGOs went straight to the 
media.  The public outcry and massive demonstrations forced the permanent closing of 
the plant.29

	In Mexico SEDUE is charged with the responsibility of areas such as 
hazardous waste importation, compliance of industries, right to know, enforcement, 
and setting exposure limits while not being given the appropriate funding to manage 
these areas.  In all of Mexico there is only one certified industrial hygienist, and that is 
in Mexico city.  In the Maquiladora, or free trade, region along the border there are 
some 2,000 plants creating a great deal of toxic and hazardous wastes.  According to 
Reuters, only 35% of these US subsidiaries are believed to comply with Mexican 
environmental regulations.30  The state of Mexican hazardous waste treatment and 
reduction is far below US technological levels.31  The infrastructure is poorly 
regulated and over burdened, which has led to massive illegal dumping in secret 
landfills and into the Rio Grande.  SEDUE had been unable to determine who were the 
owners of 685 barrels of toxic waste found near the town of Juarez 14 months after 
the discovery.  The agency is critically short on personnel and has few provisions for 
dealing with toxic accidents.  Also, the firefighters along the border are equipped and 
trained to deal with the problems of the 1950's, not with the toxic chemicals of 
today.32

	To deal with the immense problems of worker safety and the Mexican 
environment, the American and Mexican officials have created the Interborder 
Environment Plan.  In this plan the US government has pledged to spend $179 million 
from the 1993 budget for border clean up and water treatment plants, which were 
sanctioned under another act and were never built.  The Mexicans will provide $460 
million over a three period and will double their inspectors.33  While this is a good 
first step it is equivalent to giving a trauma patient a bandaid, since the predicted clean 
up costs for the border region are close to $5 billion.34  Today SEDUE and the 
Mexican infrastructure cannot cope with the negative effects of trade.  When NAFTA 
lowers the barriers to trade America will tie its economy to a toxic time bomb that on 
explosion will erase any gains derived from a closer relationship between the NAFTA 
nations, if it does not provide for environmental protection along the border and 
throughout the continent.

2.2. Flaws Inherent to the NAFTA Treaty & Negotiation Process:
	While the NAFTA accord has evoked a great deal of interest from many NGOs 
and private citizens, the process of the negotiations have been marked by a high degree 
of secrecy.  The Lack of public involvement is inefficient, as shown in the results of 
past treaties, such as the La Paz.  Also this secretive process may lead to a treaty that 
will not be ratified by the US Congress, an institution without the luxury of 
clandestine actions.

	The negotiating delegations were divided into working groups on various 
issues such as industry, agriculture and investment.  Among the working groups there 
were only four representatives from environmental NGOs.  Those four had previously 
supported the PresidentUs Environmental Review of US-Mexico Environmental 
Issues.35  In looking at the short falls of NAFTA on several key issues the 
preponderance of trade officials and the lack of public advocates becomes clear.  
NAFTA seems more like a treaty to free trade from the oppressive controls of US 
environmental and health regulations as opposed to the barriers to trade imposed by 
Mexico.

	Two areas of concern within the text of the treaty are those of sanitary and 
phytosanitary standards (SPS) and technical barriers to trade (TBT).  The SPS 
concerns issues of human, animal, and plant health risks related to food and 
foodstuffs, while TBT refer to the same issues but are related to industrial products.36  
In order for both sets of national rules and regulations to be acceptable under NAFTA 
they must meet certain requirements to prevent their being used as clandestine barriers 
to trade.  The level of protection which these rules set must be based on scientific 
methods and risk assessment.  The rules must achieve their goals with the least 
amount of trade distortion possible, and they cannot discriminate against like products 
from other NAFTA nations.37  

	The agreement states that international standards should be used as a base for 
national regulation.  The problems with these standards are that they are usually 
created by organizations who only recently have public advocacy representatives and 
that the standards tend to be lower than those of US law.  In the case of one of these 
sets of international standards, the Codex Alimentarios, the pesticide DDT is permitted 
for use on grain; this practice is banned in the United States.38

	NAFTA declares that national legislation cannot extend beyond national 
boundaries.  This means that the current restrictions on the importation of ivory or on 
goods that violate the endangered species act would not be allowed under NAFTA; 
this logic follows that of GATT.  In 1991 a GATT ruling declared that the US Marine 
Mammal Protection act was an illegal barrier to trade because it was based on a 
production method, namely the killing of dolphins during the tuna catch, and it 
imposed this regulation beyond its boarders.  The Delany clause is another regulation 
that will be subject to challenge under NAFTA.  This rule prohibits the use of 
carcinogenic additives or residues on or in foods.  It is based on a Congressional 
decision to prevent the exposure of the American people to these chemicals.  Because 
this law has a goal of zero-risk and is not based on risk assessment it could be struck 
down.39

	The situation for TBTs is much the same as SPS.  Restrictions on industrial 
products due to environmentally unsound production methods will be prohibited 
because NAFTA limits regulations to the end product only.  A rule regulating an 
industrial product does have greater leeway than one concerning an agricultural 
product.  Whereas the SPS section states that any level of protection must be 
consistent regardless of the circumstances, industrial rules are allowed to differentiate 
between various situations.

	According to NAFTA, once a rule has been declared as an unfair barrier to 
trade the federal government must either eliminate the rule, cease its enforcement, or 
pay damages to the challenger.  If the law is at the state or local level, such as the 
traditionally stringent Californian emissions standards for passenger automobiles, the 
federal government must do everything within its constitutional powers to force the 
locality to comply with the NAFTA ruling.  Since US standards on the national level 
are usually pulled upwards by innovations on the state level, this constraint would add 
to the downgrading or stasis of environmental, health, and safety regulations.40
	The provisions in the agreement for the upward harmonization of standards 
between countries are fairly ineffective.  The investment clause in NAFTA, which 
states that Rno NAFTA country should lower its health, safety, or environmental 
standards for the purpose of attracting investmentS is not enforceable according to 
William Reilly, the head of the US EPA.  This clause does nothing to prevent lax 
enforcement, which is the primary problem in Mexico.  Nor does it address the 
problem of a widening gap between the standards of the NAFTA countries .  The 
section on the recognition of international environmental treaties mirrors this 
problem.41  A NAFTA party could simple not advance its standards or not sign on to 
an international treaty to gain the competitive advantage of lower environmental 
hurdles for business.

	The transition process also posses threats to human and environmental health.  
While Mexican trucks and trains will gain access to AmericaUs roads and rails 
immediately after NAFTA becomes law, the standards regarding to safety, insurance, 
emissions quality, maintenance, brakes, and environmental protection will not be 
brought up to US levels for 3 years in the case of trucks.  Compatibility of the rules 
concerning the transportation dangerous goods via railways will not be required to 
reach the US levels for 6 years.42  This means that for several years after the NAFTA 
implementation, Mexican trains and trucks will be able to haul dangerous chemical 
products and wastes throughout America without meeting US standards.  Again this is 
a dangerous situation and it gives the Mexican transportation industry a competitive 
advantage over the other NAFTA parties.

	The problems of the rules relating to standards are exacerbated by NAFTAUs 
dispute resolution system.  Here the treaty violates one of the main principles of 
sustainable development, the democratization of the mechanisms of international trade.  
The dispute resolution process is held in complete secrecy from the public.  
Documentation of this process is only accessible after the negotiations are completely 
finished.  Also, there is no opportunity for the participation of the public, NGOs, or 
even the US congress in this mechanism.43  This results in the executive branch acting 
alone as the protector of US environmental and health legislation.  Another factor is 
that while scientific review and assessment for environmental, health, and safety 
issues is allowed under NAFTA it is not required.44  The lack of public, 
Congressional, and scientific oversight could yield results that are mirrored by Dan 
QualeUs 1991 Wetland Assessment rules, a set of guideline determined mostly by 
lawyers and industry lobbyists which have been condemned by the scientific 
establishment.

	Under the non-violation impairments (NVI) text a law that is in compliance 
with the principles and tests of NAFTA could still face a challenger who missed an 
economic opportunity that he could have reasonable expected to receive.  This has the 
effect of further undermining the weak environmental protections within the treaty.  
Also, although NAFTA requires that the burden of proof be placed on the challenger, 
the defending party has the right to choose whether to use the dispute resolution 
mechanism of NAFTA or the GATT.  Seeing as the defender will probably be the 
Federal Trade Commission, and that there will be no oversight by the public, it is 
reasonable to wonder at the ranking of the CommissionUs priorities.  Will 
environmental protection triumph over the desire for free trade?45

Conclusion:
	Bill Clinton will enter his term as President faced with an agreement that poses 
an unacceptable risk to human and environmental health in America, but his actions 
will be constrained by various forces.  Mr. ClintonUs two options are to either re-open 
the negotiation process or to attempt to negotiate a parallel agreement, each path has its 
drawbacks.  Re-negotiation will push the date of NAFTAUs implementation further 
into the future and may even threaten that implementation, while a parallel agreement 
might not be able to address the problems within the NAFTA text itself.

	If the new administration chooses to re-negotiate at least they can take solace in 
the fact that the necessary changes to the text will be fairly minor.  In order to protect 
national rules from NAFTA preemption the agreement must allow states to set higher 
levels of protection if their standards do not Rdiscriminate between like products or 
production practices.S46  Extending the NAFTA provisions to take production 
methods into account would solve the problems of both the SPS and the TBT because 
a dirty industrial process or unsafe usage of a pesticide could be regulated by US law.  
This would prevent the Mexican or Canadian firms from gaining an unfair competitive 
advantage due to lower standards, and this would effectively force upward 
harmonization of all standards driven by the economic incentive of easing the barriers 
to trade.

	Changes to the dispute resolution mechanism are fairly straight forward.  The 
proceedings would be opened to the public.  Requirements of full public notice of the 
establishment of dispute panels would have to be added.  Also the NGOs and citizens 
who are not represented in the proceedings must have the right to intervene with the 
same privileges as the disputing parties.  The public needs to be able to submit 
opinions in writing to the panels.  Finally the rules would need to be modified so that 
if the dispute involves health or environmental protection measures the use of outside 
consultation with scientific experts would not merely be allowed, but required.47

	On the downside of the re-negotiation issue are two points: time and change.  
If the treaty is re-negotiated in the light of day with full public and NGO participation, 
there is no guarantee that the aforementioned changes will be made, and there is a great 
chance that many of the compromises of the previous negotiations will disintegrate as 
the parties try to maximize their positions.  Also President Salinas and to some extent 
President-elect Clinton are operating under a very tight time constraint on NAFTA.  
NAFTA re-negotiation could push the agreementUs implementation to 1995, which 
could be too late for these men.  The miracle of MexicoUs economic turn around hangs 
on a thread.  A delay or shock of confidence could lead to the unraveling of the 
Mexican economy and a downward spiral that would bring Mexico back to the days of 
the early eighties.48  There are some indicators that the Mexican mid-term election 
results may have been altered in order to give the impression that all of Mexico was 
behind SalinasU reforms.  During the 1988 election the turn out was 50%, while the 
turn out for the meaningless mid-term election was some 15% higher.  It is possible 
that a better polling system and the efforts of SalinasU party (PRI) in of getting the vote 
out led to this increase.  It is also true that there was at least some evidence of fraud, 
with PRI providing breakfast and transportation for voters.49  If the total level of 
irregularities was as high as the left wing parties claim, then it is clear that President 
Salinas was worried enough about how an unsupportive vote may have looked to 
investors to RrigS the election.  President-elect Clinton is not free from economic 
pressures either.  If the numbers of people who voted for H. Ross Perot are any 
indicator, the voter dissatisfaction is very high.  If Mr. ClintonUs administration does 
not succeed in creating jobs and a certain level economic growth, he may find that in 
1995 and 1996 he is in the same position are President Bush has been this year.

	The path of parallel agreements has its advantages, but it is not with some 
potential costs.  This option would allow for a NAFTA ratification and implementation 
by late 1993.  It is possible that a treaty concerning the environmental integration of 
the NAFTA parties would not be implemented until later.  The parallel track could 
yield substantial gains for sustainable development, if the negotiations are less 
clandestine than those of the NAFTA.  The creation of a NAFTA wide environmental 
commission, with monitoring and enforcement powers would be a significant coup for 
the public advocacy groups, and could rectify the Reagan-Bush baggage that came 
with the main agreement.  But, while all these uncertainties slowly harden into facts 
NAFTA would have already begun functioning with its current flaws, and it would do 
a great deal of damage before any modifications could be made.

	Bill Clinton is known as one who is deft at the art of compromise, who usually 
moves with the broad consensus of his constituencies.  He has stated publicly that he 
takes issue with the NAFTA text, and that he realizes that re negotiation of the 
agreement is not a viable option due to the pandoraUs box of trade issues it would 
open.  As Mr. Clinton proceeds down the path of a parallel agreement the NGOs will 
have more access to the process, and hopefully this will yield a timely and effective 
supplemental treaty that does not pit economic growth against environmental 
protection. 
	
 




----------------------------------------------------------------------
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1RBuilding Blocks or Stumbling Blocks,S The Economist, Oct. 31, 1992. p. 69, as retrieved electronically via the NEXIS information system.

2 Don Rittner, Ecolinking (Berkley: Peachpit Press, 1992), p. viii.

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14 IATP, IBASE, et al., RAlternative Treat on Trade and Sustainable Development,S June 9, 1992, as retrieved 
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15 IATP, IBASE, et al., RAlternative Treat on Trade and Sustainable Development,S June 9, 1992, as retrieved 
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16  George Bush. RThe Benefits of Free Trade in North America.S  April 17, 1992,  as retrieved electronically via the 
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18 US, Federal News Service, (Washington, DC: August 12, 1992),  as retrieved electronically via the NEXIS 
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42 Public Citizen, RWhy Public Citizen Cannot Support This NAFTA Text,S Oct. 26, 1992, as retrieved 
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