Market Access, Competitiveness, and Harmonization: Environmental Protection in Regional Trade Agreements

Abstract

This Article examines the relationship between trade liberalization and environmental protection, focusing on how conflicts between these policy domains may be alleviated and made mutually reinforcing, especially in the context of regional trade agreements. Part II describes the various concerns that the parallel pursuit of trade liberalization and environmental protection have raised. Part III suggests a taxonomy of responses to the tensions between trade and environmental policy outlined in Part II. The nature and characteristics of these tools and strategies vary considerably, consistent with the diverse set of concerns to which they respond. The spectrum of strategies ranges from total non-integration of environmental policies and a "laissez-faire" approach to differences in environmental standards across jurisdictions, to total harmonization of environmental standards, which requires a high degree of regulatory integration. Part IV applies the theoretical framework outlined in Parts II and III to two regional trade agreements, the EC and NAFTA. This Article examines, in particular, the extent to which the trade and environment concerns discussed in Part II have arisen in these two agreements, as well as the degree to which the responses discussed in Part III have been used to address these concerns. Part V discusses the extent to which the experience with regional trade agreements might apply to the trade and environment issues arising in the context of the World Trade Organization (the "WTO"). Part VI offers some general conclusions. Specifically, we suggest that trade liberalization and advanced economic integration require some degree of integration in other realms, including environmental regulation. Fortunately, there are a variety of policy tools-especially various forms of regulatory harmonization-available to respond to this need. Those who assume that harmonization implies uniform standards, and thus dismiss it as inefficient, fail to appreciate the range of effective and refined strategies for policy coordination. We observe that the EC could benefit from valuable lessons in NAFTA, and NAFTA could learn from EC experiences in the reconciliation of competing trade and environmental goals. Finally, those pursuing future trade liberalization in either regional or multilateral agreements could profit from examining the successes and failures of the EC and NAFTA.