Things are heating up in the international trade world. With a new U.S. Trade Representative confirmed, a Trans-Pacific trade pact in the works, and a Transatlantic trade pact just launched last week, President Obama has set an aggressive trade agenda that must be watched carefully.
Trade deals like the newly launched Transatlantic Trade and Investment Partnership between the U.S. and EU typically deal with tariffs, or taxes on imports and exports, but also expand into measures and regulations that affect our environment and the economy. But tariffs between the U.S. and the EU are already low, so the pact will mostly focus on removing "non-tariff barriers" such as discrepancies in environmental, food safety, and chemical standards in the U.S. and the EU. What is important to note, however, is that governments use different regulations and standards to respond to specific demands of constituents and to pursue particular public interest goals, such as protecting clean air and water, mitigating climate disruption, ensuring consumer safety, and guaranteeing the rights of workers.
In a new report released last week, the Sierra Club argues that the protection of communities, working families, and the environment must be at the core of any trade agreement, and that critical public interest safeguards must not be sacrificed for corporate profits.
The report focuses on a few key safeguards that U.S.-EU trade pact must not jeopardize:
Climate protection: Many policies that governments use to respond to the climate crises, such as energy efficiency standards or carbon labels, could be considered non-tariff barriers to trade and could fall under the scope of the U.S.-EU trade pact. The pact must provide governments the flexibility to maintain and strengthen environmental and climate policies without constraints and without fear of trade litigation.
Food safety: The EU has long been forward-thinking on food safety and consumer protection. Food and agricultural policies that are up for negotiation in this Transatlantic trade pact include the EU's bans on genetically modified goods, hormone-treated beef, and chlorine-washed poultry products. These regulations have been in place in the EU for years in order to protect EU consumers. The trade pact must not seek to deregulate or undermine the food safety standard.
Industrial chemical regulations: While Europe modernized its chemical laws in 2006 with the adoption of the Registration, Evaluation, Authorization and Restriction of Chemicals policy, the United States continues to rely on the outdated Toxic Substances Control Act of 1976 to ensure the safety of chemical products. Some in U.S. industry and the Office of the United States Trade Representative have singled out the EU's more ambitious chemical safety regulations as a barrier to trade, rather than a policy to aspire to.
Regulatory harmonization is not, however, the only important consideration for communities and the environment that this trade pact will address. The agreement also has the potential to significantly expand hydraulic fracturing, or "fracking," across the United States by increasing U.S. exports of liquefied natural gas to Europe. The dangerous practice of fracking is known to contaminate drinking water for American communities and release climate-disrupting methane into the air.
In addition, government officials in the U.S. and the EU want to include the controversial "investor-state dispute settlement" process in this new trade pact. These investor-state rules would elevate corporations to the level of nation states, allowing them to sue governments in private tribunals over laws and policies that corporations argue will reduce their profits. These rules could pose a serious threat to our government's ability to put in place new policies to protect the climate, air, and water.
Of course, the first step to writing a trade deal that protects communities and the environment is involving the public in all stages of decision-making. A high level of transparency is key if the public and policy makers are to contribute to these negotiations. The Sierra Club believes it is critical that governments make draft negotiating texts and country submissions publicly available. A new model of trade that benefits communities and the environment is possible, and it begins with public input and scrutiny.