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Since we last spoke before the full committee, the administration has concluded 

 a side agreement on the environment. We want to acknowledge the administration's 

 efforts in this undertaking and recognize the advancements ol environmental issues 

 in the trade arena over the last few years. Trade and the environment will be intri- 

 cately linked from now on. However, the environmental side agreement does little 

 to address the fundamental environmental questions raised by NAFTA. 



Friends of the Earth believes that NAFTA's potential to create environmental 

 problems and its lack of regard to existing problems is serious enough that it should 

 be rejected, in spite of what was negotiated in the side agreement. We agree with 

 the Federal District Court which ruled that "NAFTA, by its very terms, sets forth 

 criteria that may form a basis for challenging various domestic health and environ- 

 mental laws" * * * and that "a state law that conflicts with the NAFTA is pre- 

 empted." 



We believe that rejection of this agreement, and commitments to negotiate an- 

 other, is better than approving this agreement in its flawed form, particularly since 

 the NAFTA will serve as a model for future integration with the rest of Latin Amer- 

 ica. 



We do not subscribe to the idea that increasing economic growth will automati- 

 cally lead to improved environmental protection. We believe that economic growth 

 enables a country to better protect the environment, but it will not necessarily fol- 

 low without some guarantees and explicit commitments within the agreement. 



In our testimony today we will: 



1. Summarize some of the issues that have not been addressed in the environ- 

 mental side agreement. 



2. Analyze the contents of the side agreement. 



3. Explore how the side agreement would address existing situations. 



I. ANALYSIS OF THE ENVIRONMENTAL SIDE AGREEMENT 



Many crucial environmental issues are not addressed at all in the side agreement. 

 For example, the agreement: 



1. Does not ensure that NAFTA will not be used by our trading partners to weak- 

 en Federal or State environmental, health and safety laws that may impact trade. 



2. Does not make the basic dispute resolution process of NAFTA more open or 

 democratic by allowing for public participation or requiring a more representative 

 process. 



3. Does not create a comprehensive border cleanup plan, based on the "polluter 

 pays" principle. 



4. Does not deter companies from relocating to countries with weaker or 

 nonenforced environmental standards. 



5. Does not address the serious impacts of NAFTA on the conservation of natural 

 resources — mining, timber and agricultural impacts. 



6. Does not safeguard laws which protect us against products produced in an en- 

 vironmentally destructive manner. 



7. Does nothing to solve the ongoing problem of U.S.-owned companies failing to 

 return toxic wastes to the United States for proper treatment. 



A Tri-National Commission: A Lot of Talk But No Real Teeth 



The side agreement is limited and weak, consisting only of (i) the establishment 

 a tri-national Commission for Environmental Cooperation (CEC), (w) an exhaustive 

 mechanism to bring disputes between countries regarding lax enforcement of domes- 

 tic environmental laws and (Hi) an announcement that the United States and Mex- 

 ico will continue discussion about a proposed border institution to leverage bonds 

 that would build infrastructure along the Dorder region. 



Because of the limited authority of this commission, we have to conclude that this 

 new institution will have little power to protect the environment from the impacts 

 of NAFTA. In fact, it could be negative for the environment because it will redirect 

 resources that could otherwise be used for border cleanup and building community 

 infrastructure. 



A major function of the Commission is to gather information in response to com- 

 plaints. However, the Commission cannot conduct its own investigations, but must 

 rely on information provided by the governments, not companies. It cannot inves- 

 tigate a workplace or company directly. If a government finds an information re- 

 quest excessive or unduly burdensome, the government may deny the request for 

 information. 



The Commission can draw attention to environmental problems and it can make 

 recommendations. Beyond that it can go no further. In short it is little more than 

 a forum for discussion. 



