January 28, 2014 12:52PM

Environmental Governance in Trade Agreements

Before I came to Cato, I wrote a law journal article expressing concern about how trade agreements had expanded to become global governance agreements, addressing lots of issues that don’t have much to do with trade. One of the issues in this regard is environmental protection.

The issue of environmental rules in trade agreements has now come up in the context of the Trans Pacific Partnership (TPP), as WikiLeaks leaked the latest draft of the environmental chapter in the TPP talks. From the left, the response has been: The environmental rules are not strong enough. The key issue here is whether trade sanctions will be available as a way to enforce the environment provisions.

As it turns out, this isn’t so much a business versus NGO issue, as environment issues often are. It’s a U.S. vs. the rest of the world issue. The NY Times puts it this way:

American negotiators have sought to make the environmental provisions in the agreement enforceable through a dispute settlement process, an idea that most of the other countries appear to oppose.

And the Times makes clear which side it is on:

That list includes countries like Canada, Australia and New Zealand that might have been expected to play a more constructive role.

Now, I’m no expert on the environment, but it seems to me the Times is too focused on international law, and perhaps not focused enough on the actual environment. I thought it was worth asking in this regard, how do the various TPP countries fare on the environment, according to those who support strong environmental protections? I’m not sure the best place to look for this, but one seemingly credible ranking I found was the following from a group affiliated with Yale and Columbia, called the Environmental Performance Index (EPI). Here’s how the TPP countries did:

Country EPI Ranking
Australia 3
Singapore 4
New Zealand 16
Canada 24
Japan 26
Chile 29
United States 33
Brunei 37
Malaysia 51
Mexico 65
Peru 110
Viet Nam 136

So as I read all this, the U.S. is solidly middle of the pack here. And if that’s the case, maybe we should look skeptically at the U.S. view of the issues. Resistance to the U.S. proposals is coming from countries who, according to at least some environmentalists, do better than the U.S. on environmental protection. Perhaps that suggests we should take our trading partners’ views seriously. Maybe they just think binding international law on environmental matters through trade agreements is not the right approach to the issue. And maybe they are right.