FTAs—which phase out barriers to trade in goods with particular countries or groups of countries and contain rules designed to improve access to foreign markets for U.S. goods, services, and investment— remain a major component of U.S. trade policy. Collectively, according to USTR, FTAs with 20 countries accounted for about 40 percent of U.S. trade in goods in 2013. Eleven of these 20 FTAs were negotiated under trade promotion authority in the Trade Act of 2002, went into effect from 2003 through 2013, and involved 16 partner countries. The 20 FTAs involve partners ranging from high income countries such as Australia, Bahrain, Singapore, Chile, Korea, Oman, and Canada to lower middle income countries such as Morocco, El Salvador, Guatemala, Honduras, and Nicaragua. Colombia, Costa Rica, the Dominican Republic, Jordan, Mexico, Panama, and Peru are upper middle income countries. The two CAFTA-DR countries (El Salvador and Guatemala) and the two countries with bilateral FTAs (Peru and Chile) that we visited reflect a range of national per capita incomes. See fig.1. Chile, El Salvador, Guatemala, and Peru also face a range of environmental challenges. Chile—According to Chilean officials, the country’s environmental challenges (described later in this report) relate to natural resource and extractive industries, including mining, fishing, forestry, and agriculture. For example, Chile’s agriculture and mining sectors are water-intensive, placing strains on its water supply. Chile is a top producer and exporter of fish, and mitigating the fishing sector’s water pollution and impact on ecosystems is a challenge.States and Chile have been working together under the framework of the FTA as well as a June 2003 environmental cooperation agreement and related work program to assist Chile in addressing its environmental challenges and FTA commitments. El Salvador and Guatemala—countries under CAFTA-DR. According to Salvadoran and Guatemalan officials, environmental challenges facing one or both of these countries include preservation of biodiversity and threats to endangered species, water and air pollution, deforestation, and degradation of marine resources. To assist these countries in addressing their environmental challenges and FTA commitments, the United States and these countries have been working together under the framework of the FTA as well as a February 2005 environmental cooperation agreement and related work programs. Peru—Peru has about 13 percent of the world’s tropical forests. These forestry resources include forestry concessions used for logging, natural protected areas, and reservations for indigenous communities. Peru’s myriad environmental challenges include deforestation and water contamination from small mining operations. Because of concerns related to illegal logging, the FTA included an annex on forest sector governance. To address Peru’s environmental challenges and FTA commitments, the United States and Peru have been working together under the framework of the FTA as well as a July 2006 environmental cooperation agreement and related program. The 11 agreements negotiated under trade promotion authority include environmental chapters as part of the agreements. The environmental chapters contain several provisions that call for strengthened environmental protection and allow for increased public participation in the implementation of environmental provisions. For example, the 11 FTAs include provisions for formal opportunities and mechanisms for public participation in government environmental decision making. Four of the 11 FTAs additionally provide for submissions to a secretariat by persons or organizations of an FTA partner country asserting that the FTA partner country is failing to effectively enforce its environmental laws; the secretariat is to consider these claims and may develop a report, known as a “factual record,” about them. CAFTA-DR, which entered into force in 2006, was the first to include such a mechanism, and the Peru FTA also includes one. The three FTAs that were the focus of our review (Chile FTA, CAFTA-DR, and Peru FTA) contain provisions regarding partner countries’ levels of protection and strengthening of their environmental laws. For example, these three FTAs commit each partner country to ensure that its laws provide for high levels of environmental protection and to strive to continue to improve those laws or levels of protection; to strive to ensure that it does not waive or otherwise derogate from such laws in a manner that weakens or reduces the protections afforded in those laws as an encouragement for trade with another party; and to ensure that judicial, quasi-judicial, or administrative proceedings are available under its laws to sanction or remedy violations of its environmental laws. Finally, each of the three FTAs commits the parties “to not fail to effectively enforce its own environmental laws, through a sustained or recurring course of action, in a manner affecting trade between the parties.” This provision is enforceable, meaning a party that fails to comply is subject to dispute settlement, under the respective FTA. The Peru FTA, which entered into force following the May 10, 2007 Bipartisan Agreement, also includes commitments that each party shall adopt, maintain, and implement laws, regulations, and other measures to fulfill certain obligations under seven listed multilateral environmental agreements, and that the parties will not fail to enforce their laws, regulations, and other measures to fulfill those multilateral environmental agreement obligations. Unique among FTAs, it also contains an annex on forest sector governance with detailed requirements pertaining to improved forest management and protection of CITES-listed endangered species, including big-leaf mahogany and Spanish cedar. According to USTR officials, an Environmental Affairs Council, involving both trade and international environment ministries of the FTA parties (State and USTR in the United States), is charged with overseeing the FTA environmental chapter. Each of the 11 FTAs includes an article on environmental cooperation that provides for, among other things, negotiation of a separate agreement on environmental cooperation among the parties to the FTA. State has the lead in negotiating and administering these agreements, which have typically been concluded about a year after the FTAs enter into effect; implementation is overseen by an Environmental Cooperation Commission. Environmental cooperation is programmed through agreed-upon work plans covering specified periods, and involves such activities as professional exchanges, workshops, and in-country projects aimed at improving laws, institutions, and practices that may involve U.S. funding. State is primarily responsible for overseeing implementation of environmental cooperation activities, while USTR is responsible for the negotiation and administration of trade agreements and has lead responsibility for monitoring and enforcing compliance with FTA commitments. State supports cooperation activities that enable FTA countries to develop capacity to meet their FTA environmental commitments.areas carry out cooperation activities. According to USTR officials, they rely on a network of other agencies to support their monitoring and enforcement functions. Accurate monitoring is necessary to track the extent to which partners are complying with FTA commitments and ensure that resources are targeted to areas where they can be most effective, according to U.S. officials. According to officials in Chile, Peru, El Salvador, and Guatemala, their countries passed or made changes to their environmental laws and established or strengthened environmental institutions since signing their respective FTAs. U.S. agencies worked with these partners under environmental cooperation agreements to help them build capacity to meet FTA environmental commitments. However, these countries continue to face challenges, including limited technical capacity and inadequate resources for enforcing environmental protection. According to State, Chile has taken steps to strengthen environmental standards since signing the FTA and improved enforcement of its environmental laws. In addition, according to Chilean officials, the country continues to take steps to increase transparency of government information on the environment and has made progress in increasing public participation in government environmental decision making. According to U.S. and Chilean officials, much of the progress was the result of a new environmental law, approved in 2010 that they said reformed the country’s environmental framework by establishing new agencies. For example: Environment Ministry—along with the president, is responsible for designing and implementing environmental policies, plans, and programs. Environmental Superintendency—responsible for enforcing environmental laws and regulations, including assessing fines and sanctions for violations. Environmental Evaluation Service—responsible for managing and modernizing Chile’s environmental impact assessments for both public and private sector projects to ensure compliance with applicable environmental standards. Environmental tribunals—responsible for judicial review of Environmental Superintendency decisions and settling environmental challenges or resolution of environmental damage claims, and hearing other environmental cases. According to Salvadoran officials, a key step in El Salvador’s meeting its CAFTA-DR environmental commitments was the 2012 reform of its 1998 Environmental Law. The law established the Ministry of Environment and Natural Resources, with the authority to protect the environment and conserve, restore, and promote the use of natural resources. The ministry is responsible for implementing the environmental law as well as the Natural Protected Areas and Wildlife Conservation laws. According to Salvadoran officials, the 2012 reform allowed for the creation of environmental tribunals and establishment of the tribunals as legal authorities responsible for determining the civil liability for acts against the environment. According to State officials, another important step was taken in 2013, when the ministry launched its National Environment Policy and Strategy to address sanitation, biodiversity, climate change, and water resources. In addition, according to a Salvadoran official, the establishment of an environmental “hotline” in 2011 increased the opportunity for public participation in oversight. According to a Guatemalan official, Guatemala’s legal reforms established a Ministry of Environment and Natural Resources in 2000. The ministry is responsible for formulating and implementing environmental policies and approves and oversees compliance with environmental impact assessments. Guatemala joined the CITES convention in 1980. According to a Guatemalan Environment Ministry official, its 2013 climate change legislation was another important step in meeting the CAFTA-DR environmental commitments.regulations are included in other sector-specific laws and regulations, including the Forest, Hydrocarbons, and General Fishing and Aquaculture laws, according to a ministry official.