23 ELR 10720 | Environmental Law Reporter | copyright © 1993 | All rights reserved

The Environmental Side Agreement to the North American Free Trade Agreement: Background and Analysis

Editors' Summary: NAFTA is one of the most comprehensive free trade agreements in history. Its negotiation coincided with a growing controversy about the relationship between trade and environmental policies. As a result, NAFTA contains unprecedented provisions to maintain and enhance health, safety, and environmental protection in nations that are party to the pact. In response to pressure for enhanced environmental protections, the United States, Mexico, and Canada (the Parties) negotiated the North American Agreement on Environmental Cooperation (the Environmental Side Agreement), which strikes a balance between the need to respect the rights of governments to exercise discretion in enforcing their laws and to provide a mechanism for addressing a Party's persistent pattern of failure to enforce its environmental laws.

In this Article, the authors identify the major issues that animate the debate about trade and the environment. The authors put NAFTA in context by describing the background of negotiations and the "fast track" statutory authority that governs the negotiation and approval process. Next, they summarize NAFTA's environmentally related provisions, including those governing technical standards, sanitary and phytosanitary measures, and dispute resolution procedures. The authors then examine the development of the Environmental Side Agreement, which includes provisions to enable Parties to challenge failures of other Parties to enforce environmental laws effectively. The authors review the Environmental Side Agreement's terms, including the commitments and obligations of the Parties, and provisions for the creation of new institutions to harmonize the Parties' environmental laws, foster environmental cooperation, document facts behind complaints of lax environmental enforcement, resolve disputes, and sanction noncompliance. The authors conclude that NAFTA and the Environmental Side Agreement demonstrate that trade and environmental concerns can be integrated in a mutually complementary manner.

[23 ELR 10720]

On August 13, 1993, U.S. Trade Representative Mickey Kantor announced that the United States, Mexico, and Canada (the Parties) had reached agreement on the North American Agreement on Environmental Cooperation (Environmental Side Agreement or Side Agreement). The Side Agreement, negotiated at the behest of the United States, supplements the North American Free Trade Agreement (NAFTA) by addressing environmental issues, particularly those concerning enforcement of environmental laws by the Parties. This Article describes key events and developments that led to Ambassador Kantor's announcement, and includes a brief review of NAFTA provisions that relate to environmental issues. It then discusses various sections of the Side Agreement, focusing on the more important provisions. The Article concludes that NAFTA and the Side Agreement may serve as an example for future efforts to integrate trade and environmental concerns.

Background

NAFTA constitutes one of the most comprehensive free trade agreements, short of a common market, ever negotiated. It provides for the phased elimination of all tariff and most nontariff barriers to regional trade, and also sets forth rules on topics such as protection of intellectual property, investment, standards, and services. If passed, NAFTA would create the single largest free trade zone in the world, including 370 million people and an annual market worth $ 6.7 trillion.¹ Among the most remarkable features of NAFTA and related negotiations has been the tremendous attention directed to environmental implications of the trade pact. Due in large part to demands by environmental interest groups and their congressional supporters, the trade agreement addresses an unprecedented number of environmental, health, and safety concerns. The result, as former U.S. Environmental Protection Agency (EPA) Administrator William K. Reilly observed, is "the most environmentally sensitive … free trade agreement ever negotiated anywhere."² Even so, it became clear that NAFTA did not go far enough to meet the concerns of environmental interest groups and that a supplemental agreement on the environment would be necessary to help gain passage of NAFTA by Congress.

[23 ELR 10721]

To understand how the successful conclusion of a trade agreement could come to depend so much on environmental issues, one must consider the broader political context of the negotiations. National environmental laws and international environmental agreements have proliferated in the last 20 years, reflecting a growing concern for environmental issues. This trend has coincided with closer integration of the world economy and a rapid expansion in international trade and investment flows. The potential for conflict between these two movements was not fully appreciated until recent years, when the impact of trade policies on the environment — and environmental policies on trade — became the subject of growing controversy.

The debate over the relationship between trade and environmental policy is likely to retain a high profile both domestically and internationally in the years ahead. The questions at the core of the debate include:

* Under what circumstances should a country use trade measures to accomplish environmental objectives either domestically or outside its territorial jurisdiction?

* To what extent and how should international trade agreements acknowledge and address environmental, health, and safety concerns?

* Under what circumstances should trade measures be used to give effect to or enforce international environmental or conservation agreements?

* When, if ever, is it appropriate for a country to use trade measures to redress competitive effects, if any, of inter-country differences in pollution abatement or control costs?

NAFTA and the Environmental Side Agreement are a product of this larger debate and demonstrate that the trade-environment interface can be addressed in a manner that advances both trade and environmental policy objectives.

Negotiation of NAFTA

On June 10, 1990, U.S. President George Bush and Mexican President Carlos Salinas de Gortari agreed to reduce tariff and nontariff trade barriers between their two countries by negotiating a free trade agreement. By February 1991, with the addition of Canada, the preliminary negotiations included both the United States' number one and number three trading partners. In June 1991, President Bush authorized the Office of the U.S. Trade Representative (OTR) to begin trade negotiations with Mexico and Canada pursuant to his constitutional authority for foreign affairs and the authority assigned to him under the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988.³ Formal negotiations began on June 12, 1991.

Fast Track Authority

Congress gives "fast track" consideration to trade agreements and implementing legislation submitted by the President, provided that the President adheres to specific timing, notice, and consultation requirements.⁴ Under fast trackprovisions, Congress may consider only the agreement and implementing legislation as submitted, and may not amend it or delay its vote. These provisions strengthen presidential treaty negotiating power by allowing the President to assure foreign counterparts that the agreement reached is the same agreement that will be voted on by Congress.⁵ Fast track provisions also create political pressure on the President to negotiate an agreement that is acceptable to Congress and can pass on the first, and only, vote.

In accordance with fast track procedure, President Salinas formally wrote President Bush on August 21, 1990, proposing the negotiation of a free trade agreement. President Bush, in turn, notified Congress on September 25, 1990.⁶ Fast track procedures gave the President until June 1, 1991 to sign NAFTA and submit implementing legislation to Congress.⁷ Thus, even before formal negotiations began, President Bush was required to seek an extension of fast track authority from Congress.

During this process, congressional concern for the potential environmental impact of NAFTA became an important issue. Opponents warned that a free trade agreement would exacerbate existing pollution and hazardous waste problems along the Mexican border, and would result in unemployment in the United States as American companies rushed into Mexico to take advantage of lax environmental requirements.

To address these concerns, President Bush submitted a "Response of the Administration to Issues Raised in Connection with the Negotiation of a North American Free Trade Agreement" on May 1, 1991 (May Action Plan). The May Action Plan stated that the following issues would be addressed in any free trade agreement: (1) the right to exclude products that do not meet U.S. health, safety, pesticide, food and drug, and environmental standards "so long as such regulations are based on sound science, do not arbitrarily discriminate against imports or constitute a disguised trade barrier"; (2) the right to impose stringent standards in these areas; and (3) the right to limit trade according to international environmental treaty obligations.⁸ The President also pledged to undertake a timely "study of United States-Mexico environmental issues with particular emphasis on the possible environmental effects of the NAFTA."⁹ Congress extended the deadline for NAFTA's completion in accordance with 19 U.S.C. § 2903(b).¹⁰

Environmental Concerns Move to the Forefront

Environmental concerns about trade issues were heightened [23 ELR 10722] in September 1991, when a dispute resolution panel, established under the General Agreement on Tariffs and Trade (GATT),¹¹ issued a decision in the "Tuna/Dolphin" case.¹² Mexico had initiated dispute settlement proceedings in January 1991, challenging a U.S. ban on importation of yellow-fin tuna and tuna products harvested using purse seine nets. Use of purse seine nets results in dolphin kills deemed excessive under U.S. law. The import prohibition was imposed under the U.S. Marine Mammal Protection Act (MMPA)¹³ pursuant to a court order.¹⁴

The dispute panel found that the United States' primary embargo on Mexican tuna, as well as a secondary embargo on tuna from intermediary nations — both imposed under the MMPA — are impermissible restrictions on free trade. The panel held that parties to GATT may apply their domestic environmental restrictions to products that cross their borders only when those restrictions address the products as such and not when they address the process involved in the products' manufacture or harvesting. Otherwise, the panel stated, each country would be free to determine — unilaterally, and as a condition of trade — the environmental, health, and safety measures that other countries would have to adopt. The panel ruled that GATT prohibits such an extraterritorial reach by its parties. The panel also found that the exceptions necessary to protect animal life, conservation, or health in articles XX(b) and (g) of GATT are not available to protect resources outside the jurisdiction of the country imposing the trade restriction.

The GATT Council never formally adopted the Tuna/Dolphin decision because the United States and Mexico agreed to try to resolve their differences through separate negotiations.¹⁵ Nevertheless, the GATT panel's decision catalyzed the trade-environment debate, and awakened fears of environmentalists that trade provisions might take precedence over hard fought environmental protection measures. Environmental groups demanded that environmental protection measures be included inthe final NAFTA text, rather than as items in a separate agreement, to prevent another ruling like Tuna/Dolphin. Critics also feared that separate agreements would be subject to the political whims of present and future administrations because separate environmental provisions could be rescinded without rescinding the entire trade pact.

Beyond these concerns, a number of environmental groups wanted five basic demands to be met by NAFTA negotiators.¹⁶ These were: (1) increased public participation, access to information, and oversight in dispute resolution and monitoring processes, i.e., "transparency"; (2) improved enforcement and monitoring of environmental laws already in existence and the threat of trade sanctions for nonenforcement; (3) secure and adequate sources of funding for environmental infrastructure, environmental enforcement, and cleanup efforts; (4) protection of national, provincial, state, and local environmental and health standards from challenge under NAFTA; and (5) the establishment and protection of process standards or production process methods.¹⁷

The Bush Administration's Efforts Parallel to NAFTA

The Bush Administration pursued several mechanisms for environmental protection with Mexico outside its negotiations on NAFTA. The Integrated United States-Mexico Border Environment Plan (Border Plan) was developed in response to the May Action Plan. It expanded on the Treaty on Cooperation for the Protection of the Environment in the Border Area signed in La Paz, Mexico in 1983.¹⁸ After many public hearings on both sides of the border,¹⁹ the Border Plan was finalized at a signing ceremony by Presidents Bush and Salinas in March 1992.²⁰

[23 ELR 10723]

The Border Plan recognized that, with or without NAFTA, growth and industrialization in the border area would proceed apace and place new burdens on the environment.²¹ Accordingly, it affirmed the commitment of the United States and Mexico to proceed on two separate tracks to reduce or avoid potential adverse environmental impacts from NAFTA.²² First, the United States and Mexico committed to negotiating provisions in NAFTA to limit or avoid potential adverse environmental impacts.²³ Second, they committed to "cooperative arrangements and agreements between SEDUE²⁴ and EPA to deal with other environmental issues."²⁵ Under the Border Plan, the United States and Mexico jointly pledged $ 845 million over three years toward improvement of the environmental infrastructure in the border area.²⁶

Many environmental groups criticized the Border Plan, asserting that it was too vague and relied on voluntary implementation in its pollution prevention and technology transfer provisions.²⁷ In addition, they argued that private firms should pay for the costs of environmental compliance in accordance with the polluter pays principle.²⁸ The Border Plan's provisions for harmonization of environmental standards were criticized as likely to lead to the lowering of U.S. standards instead of raising Mexican standards. Sierra Club Chairman Michael McCloskey, in criticizing the plan, characterized it as a "plan to do a plan" and largely symbolic in nature.²⁹

Meanwhile, the OTR prepared a Review of U.S.-Mexican Environmental Issues (Review), as promised by President Bush in his May Action Plan.³⁰ It reviewed a variety of U.S.-Mexican environmental concerns, particularly at the border, and included an analysis of the possible environmental effects of NAFTA. Although not a formal environmental impact statement (EIS),³¹ it was open to public comment and was designed to ensure that environmental matters would receive consideration by NAFTA negotiators.³²

Completion of NAFTA Negotiations

On August 12, 1992, with the presidential election only two months away, President Bush announced the completion of NAFTA negotiations. On September 18, 1992, he notified Congress of his intent to sign,³³ and on December 17, 1992, he signed NAFTA at a ceremony in Washington, D.C.³⁴

NAFTA's Environmental Provisions

NAFTA contains several unprecedented³⁵ provisions designed to maintain and enhance health, safety, and environmental [23 ELR 10724] protection in NAFTA countries.³⁶ Most notably, two chapters of NAFTA text explicitly preserve the right of the Parties to set and maintain their own domestic environmental, health, and safety standards, and encourage harmonization of these standards among the Parties without weakening the level of protection. An issue that was not addressed specifically in NAFTA (nor later in the Environmental Side Agreement), to the disappointment of many environmental groups, was the treatment of national laws governing the processes by which products are manufactured or harvested.³⁷

At the outset, NAFTA's preamble expresses the resolve of the Parties to "undertake [trade and investment] in a manner consistent with environmental protection and conservation"; "promote sustainable development"; and "strengthen the development and enforcement of environmental laws and regulations."³⁸ Also, the Parties agree to give precedence to trade-related obligations, to the extent that they are inconsistent with NAFTA obligations, that they have assumed under certain international environmental and conservation agreements³⁹ — the Convention on International Trade in Endangered Species of Wild Fauna and Flora,⁴⁰ the Montreal Protocol,⁴¹ and the Basel Convention.⁴²

Chapter 9 of NAFTA governs "Technical Standards" and applies to all environmental, health, or safety standards (other than sanitary and phytosanitary standards), technical regulations, and conformity assessment procedures. The Parties retain broad discretion to "adopt, maintain, or apply any standards-related measure relating to safety, the protection of human, animal, or plant life or health, the environment or consumers, and any measure to ensure its enforcement or implementation."⁴³ The Parties are committed to "us[ing] … relevant international standards or international standards whose completion is imminent, except where such standards would be an ineffective or inappropriate means to fulfill its legitimate objectives."⁴⁴ International standards are presumed to be consistent with NAFTA.⁴⁵ Moreover, NAFTA encourages harmonization of domestic and international standards, but directs the Parties to accomplish this "[w]ithout reducing the level of protection" currently provided by domestic laws.⁴⁶

NAFTA also contains special provisions to support environmentally sensitive investment. For example, in article 1114(1), the Parties specifically "recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures." Thus, while NAFTA does not mandate that Parties increase the stringency of their environmental protection standards, it effectively prohibits Parties from lowering standards to attract investment.

As with the technical standards chapter, NAFTA's chapter on sanitary and phytosanitary (S&P) measures promises that each "Party may … adopt, maintain, or apply any sanitary or phytosanitary measure necessary for the protection of human, animal or plant life or health in its territory, including a measure more stringent than an international standard, guideline or recommendation."⁴⁷ However, Parties are encouraged to use international standards (again, presumed to be consistent with NAFTA)⁴⁸ as a "basis" for their respective S&P measures, with the objective in part of achieving harmonization of S&P measures. In order to help ensure that a Party's S&P measures do not operate as an improper trade barrier, such measures (1) are to "be based on scientific principles"; (2) are not to be "maintained where there is no longer a scientific basis for [them]"; (3) are to be based on "risk assessment" as appropriate; (4) must not be discriminatory or a disguised restriction on trade; and (5) should be "applied only to the extent necessary to achieve [their] appropriate level of protection."⁴⁹

These qualifications have raised concerns in some quarters that U.S. federal, state, and local health and safety laws could be challenged successfully under NAFTA.⁵⁰ However, the qualifications require only that the laws be applied [23 ELR 10725] fairly and have some scientific basis, hardly unreasonable requirements; they do not threaten social policy decisions as to what level of risk is appropriate.⁵¹

NAFTA's dispute resolution procedures also reflect sensitivity to environmental concerns. A challenge to a Party's laws under NAFTA can be initiated only by a Party, as opposed to a private industry group. If consultation fails to resolve a dispute, then the complaining Party must seek the mediation of the NAFTA Free Trade Commission.⁵² The Party challenging another Party's law always has the burden of proving that the challenged measure is inconsistent with NAFTA.⁵³

When a Party challenges an environmental, health, or safety measure, an additional safeguard applies.⁵⁴ Although disputes arising under both NAFTA and GATT can be resolved in either forum, article 2005 permits the responding Party, i.e., the Party whose law is being challenged, to insist on the use of NAFTA's more explicitly environmentally sensitive dispute resolution procedures.⁵⁵

Moreover, under NAFTA, an adverse report by an arbitral panel does not and cannot result in an automatic, actual change in that law. Rather, the responding Party may choose to implement the panel's decision either by changing its law or compensating the complaining Party.⁵⁶ If the responding Party does not implement an adverse panel report, then the only remedy for the complaining Party is to suspend NAFTA "benefits of equivalent effect" until the dispute is resolved.⁵⁷ Any Party may withdraw from NAFTA after providing six months' written notice to the other Parties.⁵⁸

Side Agreements: From Campaign Promise to Reality

Environmental groups felt that NAFTA, as negotiated by President Bush's Administration, did not go far enough to protect the environment, particularly in the U.S.-Mexican border area. They and congressional supporters pressed then Presidential Candidate Bill Clinton to "strengthen" the environmental aspects of the trade pact, either by reopening the text of NAFTA or through a strong supplemental environmental agreement with "real teeth."⁵⁹ In a speech in Raleigh, North Carolina, on October 4, 1992, Clinton endorsed NAFTA with several qualifications and promised not to reopen negotiations on the text of the agreement if elected President.⁶⁰

In his speech, Clinton proposed two elements to supplement the environmental provisions of NAFTA. First, he recommended various steps to be taken unilaterally by the United States, including increased environmental cleanup and infrastructure investments, and mechanisms for greater public participation in challenges brought against U.S. environmental laws under trade agreements. Second, Clinton called for the creation of a supplemental agreement to NAFTA on the environment (as well as other agreements on labor and import surges). With regard to an environmental side agreement, Clinton advocated the creation of a strong "environmental protection commission" with "the power to provide remedies, including money damages and the legal power to stop pollution."⁶¹ Clinton acknowledged that the issue was not the need for Mexico to strengthen its environmental standards, but rather Mexico's inconsistent and lax enforcement of existing standards.⁶²

Environmental interest groups initially were not enthusiastic about Clinton's proposal. Although it addressed their demands for stronger environmental protections, the provisions would not be included in NAFTA but in a supplemental agreement. They were concerned that anything not explicitly included in the actual text would be secondary to NAFTA's provisions.

Most U.S. business groups favoring NAFTA supported the creation of a regional commission on the environment that would serve as a forum for consultations and cooperation among NAFTA signatories on environmental issues, but objected to earlier U.S. negotiating draft texts of the side agreement that vested such a commission with investigatory discretion and enforcement authority.⁶³ Among other things, these groups felt that empowering a supranational entity to investigate complaints against industries or to authorize trade sanctions for inadequate environmental enforcement (1) would impinge on matters traditionally and uniquely within the powers of a sovereign government — namely, the exercise of law enforcement discretion within national borders; and (2) vest power in an institution that was not sufficiently accountable to democratic institutions.

The Bush Administration made the first effort to negotiate an environmental side agreement in Mexico City on December 15, 1992. Canadian and Mexican negotiators, however, were indisposed to make any deals with an outgoing administration. The Clinton Administration began side agreement negotiations on February 16, 1993, in Mexico City with Ambassador Mickey Kantor as the new U.S. Trade Representative. At their March 17 and 18, 1993, meeting in Washington, D.C., the ministers agreed to several general principles: that the side agreement should respect each nation's [23 ELR 10726] sovereignty, that NAFTA would not be reopened, and that the side agreement should not open the door for disguised protectionism.⁶⁴

Several issues dominated the negotiations. First, the issue of enforcing the side agreement through the use of trade sanctions pitted the United States and Mexico, which were willing to allow the use of trade sanctions, against Canada, which was not. Second, the issue of finding a guaranteed source of funding for a proposed tri-national commission on the environment and the necessary environmental infrastructure improvements needed along the U.S.-Mexican border created difficulties for both the United States, which was struggling to get out of a recession, and Mexico which still had a developing economy.

At a meeting of the trade ministers in Cocoyoc, Mexico, on July 10 and 11, 1993, the three Parties agreed to each contribute $ 100 million to a North American Environmental Fund. Thereafter, the pace of negotiations began to pick up as the ministers met again for four days on July 19, 1993, in Ottawa, Canada; two days on July 29, 1993, in Washington, D.C.; and six days on August 4, 1993, in Washington, D.C. Several ancillary and minor issues were resolved during these meetings, but the issue of trade sanctions remained an obstacle. Negotiations continued via telephone.

Finally, on August 13, 1993, Ambassador Kantor announced that consensus had been reached on all of the proposed side agreements — labor, environment, and import surges. They were signed by President Clinton on September 14, 1993. The agreements, which have been described as international executive agreements, will be submitted to Congress as part of the "NAFTA Package" along with NAFTA itself and the implementing legislation.⁶⁵ The Administration has indicated that because it is not proposing any specific changes to U.S. laws to implement the side agreements, they do not need to be considered as part of the NAFTA fast track implementing bill.⁶⁶ Congress may address any statutory changes it feels are necessary, however, such as appropriations provisions, as part of the fast track package.

In view of the political attention that it received, it is not surprising that the Environmental Side Agreement reflects a compromise among competing interests. With the release of the completed Side Agreement, however, most major environmental groups endorsed NAFTA and the Side Agreement.⁶⁷ Similarly, the Side Agreement alleviated many of the concerns of pro-NAFTA business groups, although trade sanctions are still available at the end of the dispute resolution process.

Analysis of the Environmental Side Agreement

The North American Agreement on Environmental Cooperation⁶⁸ spans some 42 pages, including its five annexes, and can be roughly divided as follows:

* The Side Agreement leads with a statement of general principles. Part one of the Side Agreement lists the overall objectives. Part two sets forth general commitments of the Parties to establish laws and procedures providing for high levels of environmental protection and enforcement.

* Part three of the Side Agreement sets forth the general structure of the new Commission for Environmental Cooperation (Commission). It is to be comprised of a Council, a Secretariat, and a Joint Public Advisory Committee.

* Part four of the Side Agreement contains provisions relating to cooperation and provision of information among the Parties.

* Part five of the Side Agreement contains the general procedures for consultation and resolution of disputes among the signatory nations or Parties. The dispute resolution procedures are available only when a Party complains that another Party has engaged in a "persistent pattern of failure … to effectively enforce its environmental law."

* Finally, parts six and seven of the Side Agreement contain miscellaneous general provisions, including the definitional article.

Preamble, Objectives, and Obligations

[] Preamble. The Side Agreement's preamble reaffirms the commitment of the signatory nations to both the Stockholm Declaration on Environment and Development⁶⁹ and the Rio Declaration on Environment and Development.⁷⁰ It also reaffirms their commitment to the environmental goals of NAFTA including the upward harmonization of environmental standards.⁷¹ The preamble points to the "growing economic and social links" between the Parties, and advocates principles such as transparency, international cooperation, and the right of states to be free from environmental injury from their neighbors. It also commits the Parties to the goal of "achieving sustainable development for the well-being of present and future generations," a point that is echoed in article 1 which identifies sustainable development as one of the objectives of the Side Agreement.

[23 ELR 10727]

[] Objectives. Article 1 enumerates the objectives of the Side Agreement. It repeats the preamble's declaration of support for the environmental goals and objectives of NAFTA. The primary objectives are: cooperation for the protection of human populations, the environment, and flora and fauna; avoiding creation of trade distortions or new trade barriers; enhancing compliance and enforcement of environmental laws; and promoting transparency and public participation.

[] General Obligations and Commitments of Parties. The Side Agreement sets out a number of largely hortatory obligations and commitments of the Parties to maintain and enhance environmental protection and enforcement within their territories. Most of these obligations are not enforceable. The failure of a Party to enforce its environmental laws, however, leaves it open for challenge under the Side Agreement's dispute resolution procedures. This provision responds to a major concern expressed by NAFTA critics — the lack of environmental enforcement in Mexico.

The Side Agreement respects each Party's right to establish its own level of domestic environmental protection.⁷² However, article 3 provides that "each Party shall ensure that its laws and regulations provide for high levels of environmental protection and shall strive to continue to improve those laws and regulations."⁷³ At the same time, the Side Agreement requires each Party to effectively enforce certain of its "environmental laws,"⁷⁴ report on the state of its environment, develop environmental emergency contingency plans, promote environmental education and research, and conduct environmental impact studies where appropriate.⁷⁵

Each Party commits to "consider prohibiting the export to the territories of the other Parties of a pesticide or toxic substance whose use is prohibited within the Party's territory."⁷⁶ This provision is designed to dissuade Parties from exporting poisonous or dangerous substances that they would not allow to be marketed domestically, a practice that has been the subject of ongoing deliberations by a GATT working group.⁷⁷ At the very least, each Party must notify the others of a decision to ban or severely restrict a pesticide or chemical domestically.⁷⁸

The Parties also assume obligations that relate to the transparency goals of the Side Agreement. For example, Parties are committed to publishing existing and proposed laws, regulations, and procedures, as well as administrative rulings respecting any matter covered by the Side Agreement.⁷⁹ This includes offering any persons or Party an opportunity to comment on proposals.⁸⁰ If a proposal or actual environmental matter potentially affects the operation of the Side Agreement or otherwise substantially affects another Party's interests under the Side Agreement, the Party proposing the action has an obligation to notify the other Parties.⁸¹ The Side Agreement also states that the public release of noncompliance information and the issuance of periodic statements of enforcement procedures are criteria for the effective enforcement of environmental laws.⁸²

Significantly, the Parties have committed themselves to ensuring that domestic enforcement proceedings are available to sanction or remedy violations of environmental laws and regulations.⁸³ This includes granting rights to interested persons to seek redress,⁸⁴ and providing procedural guarantees for persons to present their views in proceedings.⁸⁵ A Party must also include in its domestic laws provisions for "monitoring compliance and investigating suspected violations, including through on-site inspections."⁸⁶ However, one Party's authorities are not empowered to undertake environmental law enforcement actions within the territory of another Party.⁸⁷

Further, each Party must ensure that its environmental enforcement procedures are fair, open, and equitable.⁸⁸ These procedures must include procedures for private persons to request investigations and have access to proceedings for enforcement of laws.⁸⁹ These provisions should not require expansion of current U.S. laws concerning, for example, citizen suits or private rights of action for monetary damages. Citizen suits may not, however, be brought to enforce obligations or provisions of the Side Agreement against another Party.⁹⁰

Finally, at the request of the Council or Secretariat (described below), a Party must provide information and respond to inquiries.⁹¹ A Party may refuse, however, to provide such information when the Party deems that to do so would be excessive or otherwise unduly burdensome;⁹² impede domestic environmental law enforcement; be contrary to domestic laws of trade secrecy, privacy or confidentiality;⁹³ or be contrary to essential national security interests.⁹⁴ The Side Agreement does not provide for any recourse against a Party who refuses to release information that it deems inappropriate; the Party only has to reveal its reasons.⁹⁵ The Secretariat has an obligation to protect the identity of sources of information if it would be appropriate under the circumstances.⁹⁶

[23 ELR 10728]

Commission for Environmental Cooperation

As stated earlier, the Side Agreement creates a Commission,⁹⁷ which is made up of three permanent institutions: the Council, a Secretariat, and a Joint Public Advisory Committee.⁹⁸ Such institutions are not new to NAFTA's signatories; the United States and Canada and the United States and Mexico have created many border commissions or institutions with environmental responsibilities in the past.⁹⁹ The proposed Commission, however, would be a regional institution with functions and responsibilities far more comprehensive and ambitious than any created before, and it is the first to be proposed in connection with a trade agreement. It may well serve as a model for future regional structures to address common environmental concerns.

[] The Council. The Council is the governing institution of the Commission, and consists of three cabinet-level representatives, one from each Party.¹⁰⁰ It meets at least once a year in regular session, and may meet in a special session whenever a Party requests.¹⁰¹ The Council must hold public meetings in the course of regular sessions, but it has the discretion to close special session meetings.¹⁰² All decisions of the Council are by consensus unless provided otherwise.¹⁰³

The Council oversees the implementation of the Side Agreement, serves as a forum for discussion of environmental matters, promotes and facilitates cooperation, oversees the Secretariat, and encourages effective enforcement of and compliance with each Party's environmental laws.¹⁰⁴ The Council also has an important role in dispute resolution procedures under the Side Agreement; it must grant two-thirds approval for the Secretariat to prepare a factual record and for a dispute to go to an arbitral panel, and it will adopt Model Rules of Procedure for dispute resolution proceedings subject to certain minimum standards.¹⁰⁵ Also, working with the Free Trade Commission created under NAFTA, the Council contributes to the prevention or resolution of environment-related trade disputes, assists in consultations pursuant to article 1114 of NAFTA, and maintains a list of experts available to advise NAFTA institutions.¹⁰⁶ It is also charged with maintaining an ongoing consideration of the environmental effects of NAFTA.¹⁰⁷

The Council is required to take certain actions. It must consider and develop recommendations on: the environmental impact of proposed projects likely to cause significant adverse transboundary effects; public access to information held by public authorities of each Party including information regarding hazardous materials; limits on specific pollutants; and reciprocal access to rights and remedies for damage or injury resulting from transboundary pollution.¹⁰⁸ It will be responsible for establishing a process for the upward harmonization of "environmental technical regulations, standards, and conformity assessment procedures" consistent with NAFTA.¹⁰⁹

With respect to other areas, the Council has the discretion to develop further recommendations as defined by the Side Agreement. These areas include techniques for pollution prevention; data gathering, analysis, and management; public awareness; conservation and protection of wild flora and fauna; environmental emergency preparedness; life cycle analysis of goods; eco-labelling; compliance with and enforcement of domestic environmental laws; and other matters as the Council may decide.¹¹⁰

[] The Secretariat. The Secretariat of the Commission is headed by an Executive Director, to be chosen by the Council to serve no more than two three-year terms.¹¹¹ The Executive Director is authorized to appoint and supervise a staff selected from lists prepared by the Parties and the Joint Public Advisory Committee.¹¹² The Secretariat serves the Council in the performance of several key functions.

The Secretariat has three major reporting functions: (1) to prepare an annual report; (2) to prepare reports when requested by the Council on any matter within the scope of the annual program; and (3) after notification to the Council, to prepare a report on any other environmental matter related to the cooperative functions of the Side Agreement, unless the Council objects by two-thirds vote to its preparation.¹¹³ The latter two reports are to be based on any relevant technical or scientific information, including that which is publicly available, submitted by interested non-governmental organizations (NGOs) or other persons, or furnished by a Party. But the Secretariat has no authority to issue compulsory process to obtain information. Reports of the Secretariat are submitted to the Council, which will normally make the report public within 60 days unless it decides otherwise.

The Secretariat also has a role to play, albeit more limited, in the environmental enforcement arena. The Secretariat is empowered to receive submissions from any person, legal or natural, alleging that a Party has failed to effectively enforce its environmental laws.¹¹⁴ The submission will be considered only if it satisfies certain enumerated criteria; [23 ELR 10729] in particular, the submission must provide sufficient information to allow the Secretariat to review the submission, indicate that the matter has been communicated in writing to the Party, and should "be aimed at promoting enforcement rather than at harassing industry."¹¹⁵ These provisions offer guidance to the Secretariat in processing and filtering out less meritorious submissions.

If the submission meets these criteria, then the Secretariat must determine whether it merits requesting a response from the accused Party.¹¹⁶ Some of the guidelines for the Secretariat's determination include whether "private remedies available under the Party's law have been pursued" or "the submission is drawn exclusively from mass media reports."¹¹⁷ If application of these guidelines militate in favor of notifying the complained against Party, the Secretariat can forward a copy of the submission to that Party and request a response.¹¹⁸ The Party then must timely advise the Secretariat of any information it deems responsive, including whether the matter is "the subject of [a] pending judicial or administrative proceeding, in which case the Secretariat shall proceed no further" or whether "private remedies in connection with the matter are available."¹¹⁹

Once the Secretariat determines that the submission and any response offered by the Party warrant the development of a "factual record," the Secretariat must inform the Council and provide its reasons.¹²⁰ The Secretariat can proceed to develop a factual record only if two-thirds of the Council concurs. Once the Council grants approval, the Secretariat may seek information from a variety of sources.¹²¹ These sources include information that is publicly available, furnished by a Party, submitted by interested NGOs, submitted by the Joint Public Advisory Committee, or developed by the Secretariat or by independent experts.

When completed, a draft factual record is submitted to the Council, and any Party may provide comments on the accuracy of the draft factual record.¹²² The Secretariat "shall incorporate, as appropriate" such comments into the final record.¹²³ The final factual record may be made public if two-thirds of the Council agrees.¹²⁴

Thus, the Side Agreement imposes two significant limits on the scope of the Secretariat's investigatory powers. First, the Secretariat can proceed on qualified submissions only on two-thirds approval from the Council. Second, the Secretariat does not recommend to the Council that one of its investigations be pursued further by a dispute settlement panel.¹²⁵ Rather, the Secretariat simply prepares a "factual record."

Article 21 of the Side Agreement states that on request of the Secretariat, a Party shall provide any available information required for preparation of a report or factual record, including compliance and enforcement data, and shall take "all reasonable steps to make available any other information requested." If a Party considers the information request to be too burdensome, it may notify the Council and the Secretariat must revise the scope of its request.¹²⁶ It is notable that the Secretariat (1) does not have the power of compulsory process to have access to "facilities or data,"¹²⁷ and (2) cannot compel a Party to use compulsory process to gather information.

Certain types of information are protected from disclosure by a Party. A Party is not required to make available or allow access to information, "the disclosure of which would impede its environmental law enforcement" or "that is protected from disclosure by its law governing business or proprietary information, personal privacy or the confidentiality of governmental decision making [sic]."¹²⁸ Also, picking up a provision that was in a draft Mexican negotiating text, the Side Agreement states that a Party is not required to disclose information "which it determines to be contrary to its essential security interests."¹²⁹

Finally, the Executive Director and staff are granted "such privileges and immunities as are necessary" by article 44. Business groups had urged that Commission staff should be liable for disclosure of confidential business or proprietary information, trespass, or other unlawful behavior under a Party's domestic law. Whether the "privileges and immunities" clause protects the Secretariat staff from liability in such circumstances is unclear.¹³⁰ However, given the relatively limited scope of the Secretariat's authority, the issue is unlikely to arise.

[] Joint Public Advisory Committee. Article 16 creates a Joint Public Advisory Committee (JPAC) comprised of five persons nominated by each Party or its National Advisory Committee. It will meet at least once a year during the regular sessions of the Council and at such other times as the Council or a majority of the JPAC agree. The JPAC will advise the Council and provide technical, scientific, or other information [23 ELR 10730] to the Secretariat.¹³¹ Although a prior U.S. draft text authorized the JPAC to make comments on drafts of the annual program and budget simultaneously with the Council,¹³² the final Side Agreement contemplates no such input.¹³³

Article 17 allows Parties to create an optional National Advisory Committee comprised of members of the public including representatives of the NGOs. Similarly, article 18 allows Parties to create an optional Governmental Advisory Committee comprised of representatives of federal and state or provincial governments. The role of both Committees would be to advise the Party on implementation and interpretation of the Side Agreement.¹³⁴

Resolution of Disputes

The provisions governing the resolution of disputes are among the most creative and controversial elements of the Side Agreement. The Side Agreement provides for consultation and resolution of disputes among the Parties with respect to lax environmental enforcement by a Party, an issue that was the subject of much attention during NAFTA debate. Many commented that Mexico, in particular, had environmental laws on the books that were similar to, and in some cases more stringent than, U.S. environmental laws, but that Mexico simply failed to enforce them.¹³⁵ This lack of enforcement, some argued, would drive "pollution haven" investment to Mexico and offer industries in Mexico a competitive advantage over their U.S. (and Canadian) competitors. In response to these political pressures, a dispute resolution process was created for alleged instances where a Party engaged in a "persistent pattern of failure to effectively enforce its environmental law."¹³⁶

[] Persistent Pattern of Failure to Effectively Enforce Its Environmental Law. This language is specifically defined in the Side Agreement. "Persistent pattern" "means a sustained or recurring course of action or inaction beginning after the date of entry into force of th[e] Agreement."¹³⁷ One question that comes to mind is whether a consistent lack of enforcement at a single facility may be covered by this definition.

Further, the Side Agreement makes clear that a Party has not "failed to 'effectively enforce its environmental law'" in those cases where agency action or inaction either (1) "reflects a reasonable exercise of their discretion in respect of investigatory, prosecutorial, regulatory or compliance matters" or (2) "results from bona fide decisions to allocate resources to enforcement in respect of other environmental matters determined to have higher priorities."¹³⁸ This provision is responsive to concerns that a supranational bureaucracy should not be able to intrude on the decisions of national and subnational authorities to allocate prosecutorial resources and set enforcement priorities.

[] Scope of Environmental Laws Subject to Dispute Resolution. For purposes of the submission of matters relating to enforcement to the Secretariat and for purposes of the Side Agreement's dispute resolution provisions, "environmental law" is broadly defined to mean "any statute or regulation of a Party, … the primary purpose of which is the protection of the environment, or the prevention of danger to human life or health."¹³⁹ However, the term specifically is defined "not [to] include any statute or regulation, or provision thereof, the primary purpose of which is managing the commercial harvest or exploitation, or subsistence or aboriginal harvesting, of natural resources."¹⁴⁰ This exclusion was insisted upon by Canadian negotiators out of a concern that challenges might otherwise be brought with respect to timber or fishery management programs. Earlier in the negotiations, Canada had sought to limit the scope and coverage of the Side Agreement by requiring that all laws covered by the Side Agreement be listed in an Annex.

[] Consultations and Initiation of Procedures. If a Party feels that another Party's actions constitute a "persistent pattern of failure to effectively enforce its environmental law," it must first request consultations.¹⁴¹ A third party may participate in the consultation if it considers it has a substantial interest in the dispute.¹⁴² The Parties have 60 days to reach a mutually satisfactory resolution of the matter.¹⁴³

If the consulting Parties fail to resolve the matter within 60 days, then any Party may request a special session of the Council.¹⁴⁴ The Council must then convene within 20 days of delivery of the request and try to help the Parties reach a mutually satisfactory resolution.¹⁴⁵ The Council also may make recommendations that it, by two-thirds vote, can release to the public.¹⁴⁶ Alternatively, the Council may refer the dispute to another agreement or arrangement to which the disputing Parties are party, i.e., GATT or the NAFTA Free Trade Commission, if it would be more properly addressed by that forum.¹⁴⁷

[] Arbitral Panels. If agreement cannot be reached within 60 days after the Council has been convened in special session, the complaining Party may request that the Council convene [23 ELR 10731] an arbitral panel to resolve the dispute.¹⁴⁸ Significantly, an arbitral panel can be convened only "to consider the matter where the alleged persistent pattern of failure by the Party complained against to effectively enforce its environmental law relates to a situation involving workplaces, firms, companies or sectors that produce goods or provide services: (a) traded between the territories of the Parties; or (b) that compete, in the territory of the Party complained against, with goods or services produced or provided by persons of another Party."¹⁴⁹

This language was added in an apparent effort to tie an arbitral panel's review of environmental nonenforcement to instances of trade impact, as well as to limit the range of matters that would come to dispute resolution. It is unclear what the practical effect of this provision will be, especially since nonenforcement of practically any environmental law arguably could be said to have some trade impact. The only exceptions may relate to lack of enforcement of laws such as wildlife protection statutes.

The Council forms a five-member arbitral panel by selecting a chair and panelists from a roster of potential panelists that includes environmental experts.¹⁵⁰ In addition to including environmental experts among its members, the Panel may request information or technical advice from the disputing Parties, or from any other person with the consent of the Parties.¹⁵¹ These provisions address one of the major criticisms of GATT's Tuna/Dolphin Decision and GATT's dispute resolution mechanism generally — the failure of dispute panels to have access to environmental expertise.¹⁵²

Once constituted, the panel is charged with determining whether there has been a persistent pattern of failure by the Party complained against to effectively enforce its environmental law.¹⁵³ It must follow model rules of procedure established by the Council.¹⁵⁴ At a minimum, these rules of procedure must provide for at least one hearing before the panel, and the opportunity of Parties to make initial and rebuttal written submissions.¹⁵⁵ Nonparties, i.e., the NGOs, have no right to participate orally or in writing in a panel proceeding.

After 180 days, the panel must submit an initial report containing its findings of fact, its determinations of whether a Party has demonstrated a persistent pattern of failure to enforce its environmental law or other determination requested, and its recommendations for resolution when the complaint is determined to be well-founded.¹⁵⁶ The recommendation for resolution "normally shall be that the Party complained against adopt and implement an action plan sufficient to remedy the pattern of non-enforcement."¹⁵⁷ Sixty days after the Parties have had an opportunity to respond, the panel will issue its final report.¹⁵⁸ The report will be released publicly five days after it is transmitted to the Council.¹⁵⁹

[] Implementation and Review of Final Report. If the arbitral panel determines that there has been a persistent pattern of failure by a Party to effectively enforce its environmental law, then the typical implementation contemplated is that within 60 days, the disputing Parties will agree to a mutually satisfactory action plan that should conform with the arbitral panel's determinations and recommendations.¹⁶⁰ "The disputing Parties shall promptly notify the Secretariat and the Council of any agreed resolution of the dispute."¹⁶¹

If the Parties fail to mutually resolve the dispute within 60 days, the panel may be reconvened by any disputing Party.¹⁶² This option is closed after 120 days pass from the date of the final report.¹⁶³ A reconvened panel can evaluate the sufficiency of any action plan proposed by the Party complained against, or establish an action plan of its own, and if warranted, impose a monetary enforcement assessment or fine against the offending Party.¹⁶⁴

The Parties also may reconvene the panel if they cannot agree on whether the Party complained against is fully implementing an action plan.¹⁶⁵ The complained against Party has a grace period of 180 days after the finalization of the action plan before this provision may be invoked.¹⁶⁶ A reconvened panel may impose a monetary enforcement assessment unless it finds that the complained against Party is fully implementing the action plan.¹⁶⁷ Although such an assessment is deemed final,¹⁶⁸ the complained against Party may reconvene the panel a second time, within 180 days of its decision to issue the assessment to reconsider its decision.¹⁶⁹

[] Monetary Enforcement Assessment. When a panel decides that a monetary enforcement assessment should be made, it determines the amount of the assessment after taking into account various factors, including "the pervasiveness and duration of the Party's persistent pattern of failure to effectively enforce its environmental law," and "the level of enforcement that could reasonably be expected of a Party given its resource constraints."¹⁷⁰ The maximum level of assessment is $ 20 million (US) during the first year of NAFTA, and .007 percent [23 ELR 10732] of total trade in goods between the Parties during the most recent year thereafter.¹⁷¹ Any amounts collected through this mechanism are to be deposited into a Commission account and used by the Council "to improve or enhance the environment or environmental law enforcement" within the territory of the Party paying the assessment.¹⁷² Although this permits the Council to have an impact on remedying the problem giving rise to the dispute, the complained against Party may be able to block a remedial project of which it disapproves since the Council requires a consensus vote before it takes any action, including the spending of the monetary assessment.¹⁷³

In the event that the United States or Mexico fails to pay an assessment after 180 days, the Side Agreement allows the complaining Party or Parties to suspend "tariff or other benefits" under NAFTA in order to collect that assessment.¹⁷⁴ The complaining Party may impose a duty on top of NAFTA's tariff up to the point at which the "penalty tariff" equals either (1) the pre-NAFTA tariff (also called "snap back") or (2) the prevailing Most Favored Nation rate (at the time of imposition of the penalty tariff) for the affected good, whichever is lower.¹⁷⁵ The complaining Party must "first seek to suspend benefits in the same sector or sectors as that in respect of which there has been a persistent pattern of failure" and only if the Party "considers it is not practicable or effective" to do so, then it may suspend in other sectors.¹⁷⁶

Interestingly, in the event that, for example, the United States reimposes higher tariffs against Mexico, the result will be that the costs of goods and services crossing the border into the United States will be greater. That increase in cost may well be passed onto U.S. consumers — who ultimately will be paying for enhanced environmental enforcement or protection in Mexico. Of course, the argument can be made that U.S. consumers should be paying this enhanced price, because that price reflects the true cost of environmental compliance in Mexico.

The increased duties may be applied until the Commission has collected the assessment.¹⁷⁷ If more than one Party suspends benefits, the combined amounts collected may not exceed the amount assessed.¹⁷⁸ The complained against Party may request that the panel be reconvened to determine if the assessment has been paid or collected, if it has fully implemented the action plan, or if the suspension of benefits is "manifestly excessive."¹⁷⁹ Presumably, this last phrase means that snap back tariffs have been imposed in excess of the amount of the assessment.

Special Considerations for Canada. An assessment against Canada results in a monetary fine enforceable through the Canadian judicial system in accordance with Annex 36A. When filed by the Commission in a Canadian court, the panel determination becomes an order of the court and enforceable as such.¹⁸⁰ Any questions of fact or of interpretation of the panel determination will be referred to the same panel.¹⁸¹ The decisions of the panel are binding upon the court and not subject to domestic review or appeal.¹⁸² Likewise, any order entered by the court to enforce the assessment is not subject to review or appeal.¹⁸³

Another special consideration with respect to Canada involves application of the Side Agreement. All matters within Canadian federal jurisdiction are automatically subject to the obligations and benefits of the Side Agreement, but this is not true of matters subject to the jurisdiction of Canadian provinces. Article 41 and Annex 41 require Canada to declare which, if any, provinces will be bound by the Side Agreement. However, Canada may not request consultations, a Council meeting, or an arbitral panel that would primarily benefit a nonparticipating province. Nor may Canada initiate a complaint unless the "matter would fall under federal jurisdiction if it were to arise within the territory of Canada," or include provinces comprising at least 55 percent of Canada's Gross Domestic Product, or a specific industry sector with at least 55 percent of production coming from participating provinces. Similarly, matters under the jurisdiction of nonparticipating provinces may not be the subject of a complaint brought by the other Parties. This provision has the potential to frustrate environmental objectives of the Side Agreement since most environmental regulation and enforcement happens at the provincial level in Canada.¹⁸⁴

Funding

The source of funding for the Commission is left up to the individual Parties. The Side Agreement simply provides that each will contribute an equal share of the annual budget of the Commission and not be obligated to pay more.¹⁸⁵ This is unlike the United Nation's method of assessment, which is based on a member nation's ability to pay as determined by their gross national income.¹⁸⁶

Accession

Article 49 provides that "[a]ny country or group of countries" may join the Side Agreement following ratification by domestic legislatures. Although NAFTA and the Side Agreement have been championed as models for an even larger Western hemisphere trading pact, the negotiators left [23 ELR 10733] open the possibility of subsequent parties negotiating individual terms with the Council. It should also be noted that accession to the Side Agreement is not linked to becoming a member of NAFTA.¹⁸⁷

Conclusion

Together with NAFTA, the Environmental Side Agreement represents a bold step toward the integration of trade and environmental objectives in a mutually complementary manner. NAFTA was crafted with care to allow Parties to maintain and even upgrade domestic environmental, health, and safety protection measures but, at the same time, to ensure that these measures have a legitimate basis and are not used as a means to unfairly restrict trade from other countries. Also, NAFTA specifically encourages the upward harmonization of standards among signatories; this will help reduce the likelihood of trade or investment distortion as a result of differing environmental, health, or safety standards.

The Side Agreement reflects a balancing of diverse interests. For example, it provides a mechanism to address a government's persistent pattern of failure to enforce environmental laws, but respects the rights of governments to exercise discretion in enforcing their laws and to have opportunities to respond to, and ultimately act on, complaints of nonenforcement. Also, the Side Agreement supports greater public participation in the resolution of transboundary environmental issues, but recognizes that delicate matters such as consultations and dispute resolution over nonenforcement should take place at the government-to-government level. Instead of authorizing trade sanctions at the end of the dispute resolution process, a concept contrary to the trade liberalizing objectives of NAFTA, the Side Agreement essentially uses the specter of trade sanctions as a collection mechanism for nonpayment of any monetary assessment resulting from the process (at least in the case of the United States and Mexico).

The proposed Commission on Environmental Cooperation stakes out new ground as a source for providing environmental expertise and advice to trade bodies or arbitral panels. Also, the Commission likely will serve as a model for the creation of future international institutions to address transboundary environmental issues.

Many expect provisions of NAFTA and the Side Agreement to serve as an example for future trade negotiations. Experience will show how successfully trade and environmental objectives were integrated. Any future rounds of GATT negotiations are likely to include environmental considerations. In any event, while some may disagree with certain provisions of NAFTA and the Environmental Side Agreement, these landmark agreements have irreversibly changed the nature of the trade-environment debate.

John J. Kim is an associate at Wilmer, Cutler & Pickering who works in the international environmental area, focusing on trade and environmental matters. James P. Cargas is an attorney working in Washington, D.C., on international environmental issues before Congress and in conjunction with NAFTA.

1. Mickey Kantor, At Long Last, A Trade Pact To Be Proud Of, WALL ST. J., Aug. 17, 1993, at A14.

2. News Conference with William Reilly, EPA Administrator, North American Free Trade Agreement, Federal News Service, Aug. 13, 1992, at 1, available in LEXIS, Fedcom Library, Fed-new File, at 2.

3. 19 U.S.C. §§ 2101-2191, 2901-2909 (1988).

4. 19 U.S.C. §§ 2902-2903.

5. See Remarks of President George Bush at a White House Briefing on Fast Track Authority Extension, 1 PUB. PAPERS 456-59 (May 1, 1991).

6. The President's consultations with Congress are chronicled at 138 CONG. REC. H7701-03 (daily ed. Aug. 6, 1992).

7. 19 U.S.C. § 2903(b) (1988).

8. RESPONSE OF THE ADMINISTRATION TO ISSUES RAISED IN CONNECTION WITH THE NEGOTIATION OF A NORTH AMERICAN FREE TRADE AGREEMENT (1991). The Action Plan itself was attached to the May 1 Action Plan as Tab 4 and labeled "Free Trade Negotiations with Mexico, Environmental Matters."

9. Id. at 12.

10. Notice of North American Free Trade Agreement Negotiations, of Goods and Services That Might Be Affected by Such Negotiations, and of Public Hearings Relating to Such Negotiations, 56 Fed. Reg. 32454 (1991); see 137 CONG. REC. H3588-89 (daily ed. May 23, 1991); 137 CONG. REC. S6828-29 (daily ed. May 24, 1991) (extending fast track authorization).

11. General Agreement on Tariffs and Trade, opened for signature Oct. 30, 1947, art. XXIII(2), 61 Stat. A3, 55 U.N.T.S. 187. GATT is the principal international organization and system of rules governing most of the world's international trade in products. See generally JOHN JACKSON, THE WORLD TRADING SYSTEM: LAW AND POLICY OF INTERNATIONAL ECONOMIC RELATIONS (1989). The first agreement was negotiated in the 1940s; since then, there have been seven "rounds" of negotiations to amend the GATT, including the yet to be completed Uruguay Round (which was initiated in 1986 in Uruguay).

12. GATT Dispute Settlement Panel Report on United States Restrictions on Imports of Tuna, Panel Report No. DS211R, reprinted in 30 I.L.M. 1594; see Robert F. Housman & Durwood J. Zaelke, The Collision of the Environment and Trade: The GATT Tuna/Dolphin Decision, 22 ELR 10268 (Apr. 1992).

13. 16 U.S.C. §§ 1371-1421h (1988), ELR STAT. MMPA 002-028.

14. Earth Island Inst. v. Mosbacher, 746 F. Supp. 964, 21 ELR 20259 (N.D. Cal. 1990), aff'd, 929 F.2d 1449, 21 ELR 20843 (9th Cir. 1991).

15. See Robert F. Housman & Durwood J. Zaelke, The Collision of the Environment and Trade: The GATT Tuna/Dolphin Decision, 22 ELR 10268, 10275 (Apr. 1992).

16. See, e.g., Defenders of Wildlife Say Environment Side Deal Could Bring Support for NAFTA, INSIDE U.S. TRADE, Dec. 18, 1992, at 10; Environmental Groups Criticize Negotiations on North American Commission, INSIDE U.S. TRADE, Nov. 20, 1992, at 17 (discussing letter from 23 environmental groups); Environmentalists' Letter on NAFTA, INSIDE U.S. TRADE, July 24, 1992, at 16 (reprinting letter from 50 American, Mexican, and Canadian environmental groups); Green Groups Press Kantor for Powerful NAFTA Environmental Commission, INSIDE U.S. TRADE, Mar. 5, 1993, at 8 (discussing letter from eight environmental groups); Environmental Groups Offer to Support NAFTA If Demands Are Met, INSIDE U.S. TRADE, May 7, 1993, at S-1 (discussing letter from seven groups); Environmental Groups Propose Green Language for Inclusion in NAFTA, 15 Int'l Envtl. Rep. (BNA) 361 (June 3, 1992) (proposed "Green Language" of National Wildlife Federation and the Canadian Pollution Probe).

17. Process standards refer to the method by which products are produced, harvested, or captured. Examples would include governmental requirements that tuna be captured in a dolphin-safe method, that computer chips be manufactured without the use of chlorofluorocarbons (CFCs), or that fur-bearing animals be captured by a method other than a leg-hold trap.

18. Agreement Between the United States of America and the United Mexican States on Cooperationfor the Protection of the Environment in the Border Area, Mar. 14, 1983, T.I.A.S. No. 10827; Annex I, July 18, 1985, 26 I.L.M. 18; Annex II, Nov. 29, 1985, 26 I.L.M. 19; Annex III, Nov. 12, 1986, 26 I.L.M. 25; Annex IV, Jan. 29, 1987, 26 I.L.M. 33; Annex V, Oct. 3, 1989, 29 I.L.M. 29; see Notice of Public Hearings Relating to the Integrated Environmental Plan for the Mexico-U.S. Border Area, 56 Fed. Reg. 40324, 40325 (1991) (stating that the Border Plan should be based on the La Paz Agreement).

19. Seventeen public hearings were held. See Notice of Public Hearings Relating to the Integrated Environmental Plan for the Mexico-U.S. Border Area, 56 Fed. Reg. 40324, amended 56 Fed. Reg. 42614, amended 56 Fed. Reg. 46179 (1991).

20. EPA and SEDUE, INTEGRATED ENVIRONMENTAL PLAN FOR THE MEXICAN-U.S. BORDER AREA (FIRST STAGE, 1992-1994) AT ANNEXES C & D (Mar. 25, 1992) [hereinafter BORDER PLAN]. The final plan was released jointly by the EPA and the Mexican Secretariat for Urban Development and Ecology (SEDUE) on February 25, 1992. Notice of Availability of the Integrated Environmental Plan for the Mexican-U.S. Border Area (First Stage, 1992-1994), 57 Fed. Reg. 8453 (1992). Under its own provisions, it will be reviewed and renewed in 1994.

21. BORDER PLAN, supra note 20, at I-6.

22. Id. at I-5. See generally Malissa McKeith, Analysis and Perspective: Environmental Provisions Affecting Businesses on the U.S./Mexico Border, 15 Int'l Envtl. Rep. (BNA) 245 (Apr. 22, 1992). The BORDER PLAN also creates a Public Advisory Committee. Notice of Establishment of the EPA Border Environmental Plan Public Advisory Committee and Request for Nominations to the Advisory Committee, 57 Fed. Reg. 8452 (1992). The Committee has since had two public meetings. See Open Meeting of the EPA Border Environmental Plan Public Advisory Committee, 58 Fed. Reg. 29578 (1993); EPA Border Environmental Plan Public Advisory Committee, Open Meeting, 57 Fed. Reg. 24494 (1992).

23. BORDER PLAN, supra note 20, at I-5.

24. On May 26, 1992, the former SEDUE was transformed into the new Secretariat for Social Development (SEDSOL). SEDUE, and now SEDSOL, enjoy much of the same authority and responsibilities for environmental protection as the EPA.

25. BORDER PLAN, supra note 20, at I-5.

26. Environmental Community Cites Flaws in Border Plan, Environmental Review, 15 Int'l Envtl. Rep. (BNA) 136 (Mar. 11, 1992). Subsequently, in October 1993, the World Bank and Mexico announced a series of loan commitments totalling $ 1.8 billion (US) over three years for Mexican environmental protection; one of the first loans will be used to address the most serious pollution problems along the U.S.-Mexican border. World Bank, Mexico Sign Accord for Program; Border Loan Planned, 16 Int'l Envtl. Rep. (BNA) 716-17 (Oct. 6, 1993).

27. See Environmental Community Cites Flaws in Border Plan, Environmental Review, supra note 26; Bush to Announce Expanded Plan to Control Pollution on Border, 15 Int'l Envtl. Rep. (BNA) 97 (Feb. 26, 1992).

28. Polluter Pays Principle (PPP) is a concept that was originally endorsed by the Organization for Economic Cooperation and Development (OECD) and as part of its 1972 "Guiding Principles Concerning International Economic Aspects of Environmental Policies." As first articulated by the OECD, the PPP contemplated only that the entity producing a product should bear fully or "internalize" the costs incurred in complying with whatever pollution prevention and control measures are imposed by governmental authorities. Governments were encouraged not to provide "subsidies" to offset such environmental compliance costs, and thereby risk distortion of international trade and investment patterns.

More recently, the PPP has been interpreted to require not only that the producer of a product bear the costs of complying with governmental measures imposed by the host country, but also that the producer fully internalize all the environmental costs associated with production. Such costs would include those measured in terms of (1) the value of the natural resources utilized in producing the product; and (2) the environmental degradation — for example, deterioration of air or water quality or contamination of the land — caused by the production process.

29. Environmental Enforcement Provisions Must Be Set Out in Trade Accord, 14 Int'l Envtl. Rep. (BNA) 538 (Oct. 9, 1991).

30. The OTR released a draft on October 17, 1991, and the final review on February 25, 1992. U.S. Trade Negotiator's Review Says NAFTA Could Ease Environmental Stress, 39 DAILY REP. EXECUTIVES (BNA), Feb. 27, 1992, at A-9.

31. The National Environmental Policy Act (NEPA), 42 U.S.C. § 4321-70a (1988), ELR STAT. NEPA 003-014, requires "all agencies of the Federal Government" to prepare an "environmental impact statement" for "major Federal actions significantly affecting the quality of the human environment." Id. § 4332(2)(C), ELR STAT. NEPA 003. As set forth in the statute (as well as in attendant regulations), an environmental impact statement generally should include a detailed evaluation of "the environmental impact of the proposed action, any adverse environmental effects which cannot be avoided should the proposal be implemented, [and] alternatives to the proposed action, …." Id. § 4332(2)(C), ELR STAT. NEPA 003.

32. The failure of the OTR to prepare a formal EIS prompted a highly publicized lawsuit by Public Citizen and two environmental groups against the OTR, demanding that it prepare an EIS for NAFTA in accordance with NEPA. They successfully persuaded a federal trial court that NAFTA and implementing legislation constituted a legislative proposal of a federal agency, the OTR, and therefore had to be accompanied by an EIS. On appeal by the government, however, the U.S. Court of Appeals for the District of Columbia Circuit reversed. Public Citizen v. U.S. Trade Representative, No. 93-5212, slip op., 23 ELR 21471 (D.C. Cir. Sept. 24, 1993). See Joseph Mendelson III & Andrew Kimbrell, The Legislative Environmental Impact Statement: An Analysis of Public Citizen v. Office of the U.S. Trade Representative, 23 ELR 10653 (Nov. 1993).

33. Intention to Enter Into a North American Free Trade Agreement, 57 Fed. Reg. 43603 (1992). Ambassador Carla Hills and the Canadian and Mexican trade ministers initialed NAFTA text during a ceremony in San Antonio, Texas, on October 9, 1992.

34. Under NAFTA's fast track provisions, President Bush had 90 days from his notification of Congress in which to actually sign. 19 U.S.C. § 2903(a)(1) (1988). This was the last day on which President Bush could sign NAFTA and still have it get fast track treatment.

35. Kantor, supra note 1, at A14; Carla A. Hills, The Trade Pact Is Our Best Deal, N.Y. TIMES, Aug. 17, 1993, at A17; Editorial: Stop Nibbling at NAFTA, N.Y. TIMES, Aug. 17, 1993, at A16.

36. Steve Charnovitz, NAFTA: An Analysis of Its Environmental Provisions, 23 ELR 10067 (Feb. 1993).

37. Although neither NAFTA nor the Environmental Side Agreement address the issue, NAFTA does incorporate by reference the GATT Agreement on Technical Barriers to Trade, art. 903, as well as the GATT article XX exceptions (for measures necessary to protect human, animal, and plant life or health and those relating to conservation of resources), art. 2101(1). Pointing to this language, some environmental interest groups have expressed concerns that U.S. conservation statutes that control methods of process and production — including the Marine Mammal Protection Act, the Wild Bird Conservation Act, and the High Seas Driftnet Enforcement Act — will be rescinded after challenge under NAFTA, or the United States will pay penalties equivalent to the loss of trade benefits by Mexico or Canada. Environmentalists Say Conservation Laws in U.S. Appear to Violate NAFTA, Side Deal, 10 Int'l Trade Rep. (BNA) 1459 (Sept. 1, 1993).

38. North American Free Trade Agreement Between the Government of the United States of America, the Government of Canada, and the Government of the United Mexican States, signed Dec. 17, 1992 [hereinafter NAFTA].

39. Id. art. 104(1). For criticism of this language, see Charnovitz, supra note 36, at 10070.

40. Convention on International Trade in Endangered Species of Wild Fauna and Flora, opened for signature Mar. 3, 1973, 27 U.S.T. 1087, 993 U.N.T.S. 243.

41. Montreal Protocol on Substances That Deplete the Ozone Layer, opened for signature Sept. 16, 1987, 26 I.L.M. 1550, amended June 27, 1990, 30 I.L.M. 537.

42. Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, opened for signature Mar. 22, 1989, 28 I.L.M. 657.

43. NAFTA, supra note 38, at art. 904(1).

44. Id. art. 905(1).

45. Id. art. 906(2).

46. Id. art. 906(2); see also id. arts. 713 & 714 (sanitary and phytosanitary measures).

47. Id. art. 712. Sanitary and phytosanitary measures are those measures undertaken to protect human, animal, or plant life or health from risks arising from (1) "the introduction, establishment or spread of a pest or disease"; (2) "the presence of an additive, contaminant, toxin or disease-causing organism in a food, beverage or feedstuff"; (3) "a disease-causing organism or pest carried by an animal or plant, or product thereof"; or (4) "the introduction, establishment or spread of a pest." Id. art. 724.

48. Id. art. 713(2).

49. Id. art. 712.

50. See, e.g., USTR Letter on NAFTA Environmental Standards, INSIDE U.S. TRADE, Sept. 17, 1993, at S-3; USTR Letter to NRDC on S&P Standards, INSIDE U.S. TRADE, Sept. 17, 1993, at S-5. For example, concern has been expressed for the future of the Delaney Clause of the Federal Food, Drug & Cosmetic Act, 21 U.S.C. §§ 348(c)(3)(A), 376(b)(5)(B), 512(d)(1)(H) (1988), which ban food and color additives if they induce cancer in humans or animals.

51. See USTR Letter on NAFTA Environmental Standards, INSIDE U.S. TRADE, Sept. 17, 1993, at S-3; USTR Letter to NRDC on S&P Standards, INSIDE U.S. TRADE, Sept. 17. 1993, at S-5. Moreover, the S&P chapter specifically places the burden of proof on the Party challenging another Party's S&P measure. NAFTA, supra note 38, art. 723(6).

52. NAFTA, supra note 38, arts. 2006 & 2007.

53. Id. arts. 723(6) & 914(4).

54. Id. art. 2015. For example, a Party may request a scientific panel report on any factual issue concerning environmental standards, sanitary, or phytosanitary measures.

55. This is only where the dispute arises under certain environmental treaties, enumerated in article 104, or domestic environmental laws, as defined by chapters 7B or 9. Id. arts. 2005(3) & 2005(4).

56. Id. art. 2018.

57. Id. art. 2019. Since these benefits are created by NAFTA, a Party will never be in a worse position than it was before NAFTA.

58. Id. art. 2205.

59. Trade-Pact Opposition Eases a Bit, N.Y. TIMES, May 11, 1993, at D-1 (quoting Rep. Richard Gephardt (D-MO)).

60. Excerpts From Clinton's Speech on NAFTA, INSIDE U.S. TRADE, Oct. 9, 1992 (Clinton's October 4, 1992, speech at North Carolina State University).

61. Id. at S-3.

62. Id. He said, "Perhaps the toughest issue of all is how to obtain better enforcement of laws already on the books …" Id.

63. See, e.g., Major Business Groups Signal Opposition to U.S. Drafts on NAFTA Side Pacts, INSIDE U.S. TRADE, June 4, 1993, at 1; Environmental Aspects of the North American Free Trade Agreement: Hearings Before the Senate Comm. on Environment and Public Works, 103d Cong., 1st Sess. 53-54, 114-17 (1993) (statement of Calman J. Cohen, Vice President, Emergency Committee for American Trade, for USA-NAFTA, Inc.).

64. Canada Opposes Trade Sanctions to Enforce Supplemental Agreements, DAILY ENV'T REP. (BNA), Mar. 22, 1993, at A-1.

65. Senators Press Administration Officials About the Status of NAFTA Supplements, DAILY ENV'T REP. (BNA), Oct. 15, 1993, at A-11 (statement by Rufus Yerxa, Deputy U.S. Trade Representative).

66. Id.

67. See, e.g., Six Environmental Organizations Back NAFTA, Denounce Opponents, INSIDE U.S. TRADE, Sept. 17, 1993, at S-1.

68. North American Agreement on Environmental Cooperation, Sept. 13, 1993 [hereinafter Environmental Side Agreement].

69. Report of the United Nations Conference on the Human Environment, June 16, 1972, 11 I.L.M. 1416. The Stockholm Declaration on Environment and Development is a set of principles that was released in 1972 as a result of the Stockholm Conference on the Human Environment (the precursor to the 1992 Earth Summit). The Declaration recognized a fundamental right of present and future generations to an adequate environment and the obligation of the state to protect that environment.

70. Rio Declaration on Environment and Development, June 14, 1992, 31 I.L.M. 874. The Rio Declaration on Environment and Development is a statement of 27 similar principles for the conduct of nations and people with respect to the environment and development. It came out of the United Nations Conference on Environment and Development (or "Earth Summit"), which took place in Rio de Janeiro from June 3-14, 1992. The Rio Declaration was signed by almost 180 countries, including the United States, Mexico, and Canada.

71. See NAFTA, supra note 38, arts. 906(2), 713, 714.

72. Environmental Side Agreement, supra note 68, art. 3.

73. Cf., NAFTA, supra note 38, arts. 713, 714, 906(2).

74. Environmental Side Agreement, supra note 68, art. 5(1); see id. art. 45 (defining "environmental laws" to include essentially all anti-pollution laws, but not natural resource preservation statutes).

75. Id. art. 2(1).

76. Id. art. 2(3).

77. GATT Trade and Environment Group to Narrow Discussion, Accelerate Work, INSIDE U.S. TRADE, Feb. 12, 1993, at 20.

78. Environmental Side Agreement, supra note 68, art. 2(3).

79. Id. arts. 4(1) & 4(2)(a).

80. Id. art. 4(2)(b).

81. Id. art. 20.

82. Id. arts. 5(1)(a) & 5(1)(e).

83. Id. art. 5(2).

84. Id. art. 6.

85. Id. art. 7.

86. Id. arts. 5(1)(b) & 5(1)(j). Any judicial or administrative enforcement action taken by a Party must also meet general guidelines on sanctions and remedies provided in article 5(3).

87. Id. art. 37.

88. Id. art. 7.

89. Id. art. 6.

90. Id. art. 38.

91. Id. arts. 21(1) & 20(3) (providing that the information must be provided "promptly").

92. Id. art. 21(2).

93. Id. art. 39(1); see also id. art. 11(8)(b) (requiring the Secretariat to protect confidential or proprietary information from disclosure).

94. Id. art. 42.

95. Id. art. 21(3).

96. Id. art. 11(8)(a).

97. Id. art. 8. Previous drafts and proposals referred to the Commission as the North American Commission on the Environment, or NACE.

98. Id.

99. See, e.g., United States-Mexico Water Treaty, Feb. 3, 1944, T.S. No. 994 (creating the International Boundary and Water Commission); Convention Establishing an International Commission for the Scientific Investigation of Tuna, Jan. 25, 1949, U.S.-Mexico, T.I.A.S. No. 2094; Treaty Between the United States and Great Britain Relating to Boundary Waters Between the United States and Canada, Jan. 11, 1909, 36 Stat. 2448, as amended by Great Lakes Water Quality Agreement, Nov. 22, 1978, U.S.-Canada, T.I.A.S. No. 9257 (creating the International Joint Commission); Treaty Between the United States of America and the Government of Canada Concerning Pacific Salmon, Jan. 28, 1985, T.I.A.S. No. 11091 (creating the Pacific Salmon Commission).

100. Environmental Side Agreement, supra note 68, art. 9(1) (alternatively, representatives of equivalent statute or their designs may be appointed to the Council).

101. Id. art. 9(3).

102. Id. art. 9(4).

103. Id. art. 9(6).

104. Id. arts. 10(1) & 10(4).

105. Id. arts. 15(2), 24(1), 28(1).

106. Id. art. 10(6).

107. Id. art. 10(6)(d).

108. Id. arts. 10(5) & 10(9).

109. Id. art. 10(3)(b).

110. Id. art. 10(2).

111. Id. art. 11(1)(a).

112. Id. arts. 11(1) & 11(2).

113. Id. art. 13(1).

114. Id. art. 14(1). The definition of "environmental laws" includes both statutes and regulations. Id. art. 45(2).

115. Id. arts. 14(1)(c) & 14(1)(d). Various business groups had expressed concern that unless there was some limitation on the submissions to the Secretariat and the authority of the Secretariat to act on those submissions, there was a serious potential that the Secretariat could act irresponsibly or its process could be invoked by competitors or interest groups in a way that would be unfairly detrimental to industry.

116. Id. art. 14(2).

117. Id. arts. 14(2)(C) & 14(2)(d).

118. Id. art. 14(2).

119. Id. art. 14(3)(a). Under international law, an exhaustion of remedies requirement can often be met upon showing that no remedy is available or that it would be futile to pursue available remedies. See generally RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 703 cmt. d (1986) (requiring exhaustion of domestic remedies prior to seeking remedies for violations of human rights obligations). Cf., U.S. Draft Legal Text for NAFTA Environmental Pact, Annex I(3), INSIDE U.S. TRADE, May 21, 1993, at S-14 [hereinafter Draft Legal Text] (providing a futility exception).

120. Environmental Side Agreement, supra note 68, art. 15(1).

121. Id. arts. 15(2) & 15(4).

122. Id. art. 15(5). The members of the Council have 45 days in which to comment on the factual record. These comments must be included in the final factual record. Id. art. 15(6).

123. Id. art. 15(6).

124. Id. art. 15(7).

125. Cf., Draft Legal Text, supra note 119, art. 16(1), at S-13 (authorizing the Secretariat to recommend that Council consider results of investigation).

126. Environmental Side Agreement, supra note 68, art. 21(2).

127. Cf., Draft Legal Text, supra note 119, art. 12(4)(c)(4), at S-12.

128. Environmental Side Agreement, supra note 68, arts. 39(1)(a) & (b).

129. Id. art. 42 (exempting trade in military goods and services, actions taken during military emergencies, and actions taken to further international obligations related to nonproliferation of nuclear weapons or nuclear explosive devices); see Mexican Draft Text for NAFTA Environmental Pact, art. 15(c), INSIDE U.S. TRADE, May 21, 1993, at S-16.

130. Cf., U.S. INFORMATION AGENCY, MANUAL FOR BINATIONAL COMMISSIONS AND FOUNDATIONS § 109.1 (1993) (denying diplomatic privileges and immunities to members of binational Fulbright Commissions).

131. See Environmental Side Agreement, supra note 68, art. 15(4)(c) (the JPAC may assist the Secretariat in developing a factual record); id. art. 11(2)(b) (the JPAC may prepare a list of potential staff members for the Secretariat); id. art. 13(2)(c) (the JPAC may submit information for inclusion in any report of the Secretariat).

132. NAFTA Draft Text on the Environment, art. 7(7); INSIDE U.S. TRADE, Aug. 20, 1993, at S-5.

133. Environmental Side Agreement, supra note 68, art. 16(6) (only entitled to copies of proposed annual program and budget).

134. See id. art. 10(1)(b) (delegating final authority to implement the Environmental Side Agreement to the Council).

135. See, e.g., OFFICE OF GENERAL COUNSEL, U.S. EPA, EVALUATION OF MEXICO'S ENVIRONMENTAL LAWS AND REGULATIONS: INTERIM REPORT OF EPA FINDINGS, ii-iii (1991).

136. Environmental Side Agreement, supra note 68, art. 24(1).

137. Id. art. 45(1).

138. Id. This important language is not defined in the Side Agreement and may well be the focus of initial consultations or decisions.

139. Id. art. 45(2)(a).

140. Id. art. 45(2)(b).

141. Id. art. 22(1); see also id. art. 20(1) (requiring consultations to resolve differences in interpretation and application of the Environmental Side Agreement). The definition of "environmental law" includes both statutes and regulations. Id. art. 45(2).

142. Id. art. 22(3) (the Council may alter this right in promulgating its rules and procedures under article 9(2)).

143. Id. art. 23(1).

144. Id.

145. Id. arts. 23(3) & 23(4).

146. Id. art. 23(4).

147. Id. art. 23(5).

148. Id. art. 24(1).

149. Id.

150. Id. arts. 25, 26, 27 (governing roster of potential panelists, qualification of panelist, and the panel selection process respectively); see also id. art. 23(4)(a) (permitting the Council to seek advice from technical advisers or create working and expert groups "as it deems necessary"); id. art. 9(5)(b) (permitting the Council to seek advice from nongovernmental organizations, persons, and independent experts).

151. Id. art. 30.

152. See Peter L. Lallas, Daniel C. Esty & David J. van Hoogstraten, Environmental Protection and International Trade: Toward Mutually Supportive Rules and Policies, 16 HARV. ENVTL. L. REV. 271, 341-42 (1992); John H. Jackson, World Trade Rules and Environmental Policies: Congruence or Conflict?, 49 WASH. & LEE L. REV. 1227, 1255 (1992).

153. Environmental Side Agreement, supra note 68, art. 28(3).

154. Id. art. 28(1).

155. Id.

156. Id. art. 31(2).

157. Id. art. 31(2)(c).

158. Id. art. 32(1).

159. Id. art. 32(3).

160. See id. arts. 33 & 34(1)(a).

161. Id. art. 33.

162. Id. art. 34(1)(a).

163. Id. art. 34(2).

164. Id. art. 34(4) (the panel has 90 days to reach its determinations).

165. Id. art. 34(1)(b).

166. Id. art. 34(3).

167. Id. art. 34(5)(b).

168. Id. art. 34(6).

169. Id. art. 35 (the panel has 60 days to reconsider its assessment).

170. Id. Annex 34(2) (emphasis added).

171. Id. Annex 34(1).

172. Id. Annex 34(3).

173. See id. art. 9(6) (requiring consensus vote).

174. Id. art. 36(1), Annex 36A(2)(b); see id. art. 35 (time runs from initial panel assessment not a subsequent panel reconsideration). There is no provision to stay the assessment beyond the 180 days even if there are further proceedings. An assessment against Canada is governed by somewhat different procedures set forth in Annex 36A and described in more detail below.

175. Id. Annex 36B(1).

176. Id. Annex 36B(2).

177. Id. arts. 36(1) & 36(2), Annex 36B(1).

178. Id. art. 36(3).

179. Id. arts. 36(4) & 36(5) (the panel has 45 days to make its determinations).

180. Id. Annex 36A(2)(c).

181. Id. Annex 36A(2)(f).

182. Id. Annexes 36A(2)(f) & 36A(2)(g).

183. Id. Annex 36A(2)(h).

184. See U.S. TRADE REPRESENTATIVE'S OFFICE, 1993 NATIONAL TRADE ESTIMATE REPORT ON FOREIGN TRADE BARRIERS, 31 (explaining the current controversy surrounding Ontario's nonrefillable beer can levy).

185. Environmental Side Agreement, supra note 68, art. 43.

186. See generally Nelson, International Law and U.S. Withholding of Payments to International Organizations, 80 AMER. J. INT'L L. 973, 978 (1986).

187. See NAFTA Draft Text on the Environment, supra note 119, art. 39(1B), at S-9 (requiring accession to both).

23 ELR 10720 | Environmental Law Reporter | copyright © 1993 | All rights reserved