138 



This situation is not in the interest of Mexico or the United States. The improp- 

 erly dumped toxic wastes can lead to public health problems and huge long-term 

 cleanup costs for Mexico. Industries may relocate to Mexico to take advantage of the 

 situation and avoid the costs of proper disposal in the United States. The problem 

 is not isolated to Mexico, since the toxics can cross back into the United States 

 through the air, water, or ground water. 



This whole topic is not addressed in the NAFTA, despite being one of the clearest 

 trade and environment problems between the United States and Mexico. We had 

 hoped that the side agreements would address the problem, but, as with Carbon II, 

 we see them doing little more than providing an opportunity to discuss the issue. 

 In fact the agreement could provide political cover to allow this problem to persist 

 into the next century. 



If this issue were brought before the Commission, the politics would be somewhat 

 different from Carbon II, since in the case of the failure to reexport hazardous 

 wastes both the U.S. and Mexican Governments are failing to meet treaty obliga- 

 tions. Since the approval of two NAFTA country governments is required to initiate 

 a formal enforcement proceedings, it is unlikely this situation would ever be consid- 

 ered. Furthermore, if the issue were considered, the United States and Mexico could 

 quickly announce that they had reached an agreement on the issue — whether or not 

 any real action would ultimately take place. 



We therefore believe that the side agreements will deflect action on this crucial 

 area for the immediate future. Furthermore, since NAFTA gradually phases out the 

 maquiladora program as it phases out tariffs, the effect is to provide cover for these 

 corporate violations until the NAFTA itself steps in and makes the dumping of haz- 

 ardous wastes legal. In short, desperately needed control and prevention of indus- 

 trial toxics will not take place. 



rv. CONCLUSION 



The environmental side agreement did not serve to resolve some key conflicts be- 

 tween increased trade and environmental protection. Instead, it creates yet another 

 international institution that, given its weak powers, will be ineffective, and given 

 the requirements for sanctions to be invoked, it is unlikely that they will be applied. 



We still believe that a framework for integration is necessary within North Amer- 

 ica, but that framework needs to be dramatically recast to incorporate the goals of 

 sustainable development, democratic participation and responsible corporate behav- 

 ior. 



Brent Blackwelder 



Mr. Chairman and members of the committee: My name is Brent Blackwelder. I 

 am Vice President for Policy at Friends of the Earth. Friends of the Earth is a na- 

 tional, nonprofit environmental organization with affiliated organizations in 51 

 countries. We work on a wide range of national and international environmental is- 

 sues. With me is Andrea Durbin, our Trade Policy Analyst. She recently returned 

 from a trip to Mexico, where she had the opportunity to view some of PEMEX's fa- 

 cilities first hand. 



We are pleased to have the opportunity to present our views on the energy impli- 

 cations of the North American Free Trade Agreement. Friends of the Earth is op- 

 posed to the NAFTA for a wide range of reasons and would urge the members of 

 the subcommittee to vote against the agreement. At the same time we would urge 

 the administration to begin negotiations on a new pact that would bring a more sen- 

 sible order to trade relations among the countries of North America — a NAFTA II. 



From the outset we should make it clear that our views concerning the proper 

 energy policy for the United States differ rather markedly from those espoused by 

 the administration that negotiated the North American Free Trade Agreement. We 

 believe U.S. energy policy should feature the following two goals: 



1. To dramatically increase the efficiency of the entire energy system from pro- 

 duction through end use; 



2. To shift, as rapidly a possible, to renewable energy sources. 



We are confident that the subcommittee has heard many times and at great 

 length about the benefits of applying these guiding principles and we will not elabo- 

 rate on them here, except to point out that energy efficiency is a crucial component 

 of global trade competitiveness. Efficient economies need to import less energy (or 

 can export more) and, since energy is a smaller part of production costs, these 

 economies find more of their products are competitive on the export markets. 



