Session 11 Environmental Provisions in FTA s Jakarta, Indonesia 5-7 - - PowerPoint PPT Presentation

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Session 11 Environmental Provisions in FTAs

Jakarta, Indonesia 5-7 September 2017 Rita Lindayati Senior Environment Specialist The Conference Board of Canada

Overview

• Background: Pros and Cons of FTA Environmental

Impacts

• Environmental Provisions in Free Trade Agreements:

Historical Trends

• Main Types of Environmental Provisions
• Common Objectives of Environmental Provisions
• Example from Canada
• Concerns of Developing Countries
• Some Considerations for Indonesia in Negotiating FTA

Environmental Provisions

Pros and Cons of FTA Environmental Impacts

Pros:

• More resources for environmental protection as

increased trade boosts economic growth

• Better access to cleaner technology and

environmental goods and services

• Encourage technical innovation and more

efficient allocation of resources

• Improved environmental standards (especially to

meet the requirements from the developed markets) Cons:

• Increased trade could deplete natural resources

and worsen pollution

• Weak environmental standards and law

enforcement in many developing countries would attract polluting industries FTAs are good for the environment! FTAs are bad for the environment!

Source: picture from the internet

Factors Affecting FTA Environmental Impacts

FTAs

Scale Structure Sector/product Environmental policies/ regulations

Environ- mental impacts:

• Land
• Water
• Air
• Flora &

fauna

• Human

health

• Etc.

Technology

FTA Environmental Provisions: Historical Trends

• GATT General Exceptions Articles XX (b) and (g)
• Groups on Environmental Measures and International Trade/ EMIT (dormant)
• Sanitary and Phytosanitary (SPS) Measures
• Technical Barriers on Trade (TBT)
• Subsidies and Countervailing Measures (SCM)
• Trade-Related Aspects of Intellectual Property Rights (TRIPS)
• General Agreement on Trade in Services (GATS)
• Agreement on Agriculture (AoA)

GATT (1947)

• Preamble of Marrakesh Agreement: Sustainable Development Objective
• GATT General Exceptions Articles XX (b) and (g)
• SPS, TBT, SCM, TRIPS, GATS, AoA
• Established the Committee on Trade and Environment (CTE) to advice General Council on Trade-Environment

linkage

• Established Committee on Trade and Environment Special Sessions (CTESS) focusing on trade-environment

negotiations: e.g., link between WTO & Multilateral Environmental Agreements (MEAs), fisheries subsidies, removing trade barriers on environmental goods and services

WTO (1995)

• Preamble
• Environmental provisions in the main text
• Environmental Side Agreement (North American Agreement on Environmental Cooperation/NAAEC)
• Established institution and resources to implement the agreement (Commission on Environmental Cooperation)
• The first most comprehensive FTA environmental provisions

NAFTA (1994)

Global Environmental Events

• 1972 UN Conference on the Human Environment

(Stockholm Conference)

• 1987 Brundtland Report
• 1992 Rio Earth Summit (Agenda 21)
• 2002 World Summit On Sustainable

Development

GATT Article XX: General Exceptions

• Subject to the requirement that such measures are not applied in a

manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: (b) necessary to protect human, animal or plant life or health; (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;

Free Trade Agreements With and Without Environmental Provisions post-NAFTA

Source: Colyer, 2013

Common Objectives of Environmental Provisions in FTAs

• Promoting sustainable development and attaining

high levels of environmental protection

• Levelling the playing field and improving

environmental cooperation

• Pursuing an international environmental agenda in

a more efficient and rapid way through trade agreements

Main Types of FTA Environmental Provisions

• Protection and improvement of the environment through maintaining,

enhancing, and enforcing environmental laws and regulations (e.g., national/ bilateral/regional/multilateral environmental laws)

• Cooperation in environmental activities and projects including

improving and enforcing laws

• Public involvement in environmental activities related to trade and

the environment

• Institutional mechanisms for the implementation of trade-environment

related activities/projects and dispute resolution

Source: Coyler,

Spectrum of FTA Environmental Objectives

Least ambitious In between Most ambitious

www.TRENDanalytics.info

Canada Experience

• Environment is an integral part of majority Canada’s FTAs
• Canadian government conducts Environmental Assessment of

FTAs as a part of negotiation process

• Legal framework: the Cabinet Directive on the Environmental

Assessment of Policy, Plan and Program Proposals

• The Framework for Conducting Environmental Assessments of

Trade Negotiations outlines the process and analytical requirements for conducting the assessment. It focuses on the identification of the potential environmental impacts of an initiative.

• The key objective of environmental assessment is to assist

Canadian negotiators to integrate environmental considerations into the negotiating process by providing information on the environmental impacts of the proposed trade agreement.

Concerns of Developing Countries in Adopting Environmental Provisions

• Domestic environmental management system is still

in its infancy (vis a vis the trading partners)

• Environmental provisions will become trade barriers
• Implementation will be excessive burden on human

and financial resources

• Lack of political will/ opposition from higher level of

government

• Lack of capacity in negotiating environmental issues
• Insufficient coordination between trade and

environment ministries

Some considerations for negotiating environment related provisions in FTAs for Indonesia

• The nature of legal obligations emerging from

provisions relating to the environment under a FTA;

• The potential economic costs of specific

environmental requirements;

• Areas where technical assistance and capacity

building would be necessary to ensure compliance with environmental obligations;

• The nature and extent of financial assistance

required; and

• The nature of dispute settlement and enforcement

mechanisms.

THANK YOU!!