Re-Negotiating NAFTA to cover Climate Change

In the 2016 US Presidential election campaign, Donald Trump promised that if elected he would pull the US out of the North American Free Trade Agreement (NAFTA).  To avoid this extreme result, the other NAFTA parties, Mexico and Canada, recently proposed a re-negotiation of NAFTA.  President Trump agreed, and identified specific sectors, such as softwood lumber, dairy products and energy, where he considers current trade practices to be “unfair” to the US.

NAFTA parties support bringing the Agreement up to date and extending its application to new trade practices. For example, telecommunication infrastructure (the internet) is not subject to NAFTA, but it is a trade activity that is now vital to any modern economy.

Climate change is another area where NAFTA is not up to date. Some NAFTA terms addressed the environment, but did not specifically cover climate change, a problem that at the time of the Agreement had only just been taken under review by the United Nations.

The Canadian Government has previously noted:

“The North American Agreement on Environmental Cooperation was also negotiated and implemented in parallel to the NAFTA. It requires that each Party ensures its laws provide for high levels of environmental protection without lowering standards to attract investment. . . .  Each Party must also provide a report on the state of its environment, develop environmental emergency preparedness measures, promote environmental education, research and development, assess environmental impacts and promote the use of economic instruments.”

In September 2016, the Commission on Environmental Cooperation established by the NAFTA parties confirmed

“. . . a historic commitment of Canada, Mexico, and the United States to be global leaders in addressing climate change and protecting the environment.”

Regardless of the opinions of President Trump, climate change is an issue of international importance. Both the US and Canada agreed to the terms of the Paris Accord.  Canada should insist that these terms be the basis for related provisions in a revised NAFTA.   

While the US may withdraw from the Paris Accord in the near future, it must accept that Canada remains committed to the terms of the Accord, which continues to have the support of all but a few countries. So a revised NAFTA must

·         be consistent with the Accord commitments of Canada and Mexico,  

·         support programs to reduce GHG emissions.

·         encourage development of renewable energy sources,

·         regulate industries seeking to avoid paying a price on Carbon by stopping “leakage”, viz.industries who avoid the impact of climate change provisions by moving their activities to a more lenient North American jurisdiction.

 

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