Toward a New Foreign Policy.

Key Recommendations

* The CEC should strengthen its ties with NAFTA's Free Trade
Commission and other NAFTA-linked institutions.

* BECC and NADBank must refine their citizen access and
transparency procedures. The Border XXI Program should move
beyond federal initiatives to strengthen local environmental
capacity on the U.S.-Mexico border.

* NAFTA's environmental protections should be strengthened,
better funded, and built into future trade accords.

Five years and counting since the NAFTA accords took effect, there is much to be done to realize its promise of supporting sustainable development. It is now plain that NAFTA's rules protecting trade and investment in the trinational region are an invitation to the private sector to challenge environmental regulations. These rules and their implementation procedures must be shored up if a gradual erosion of state and provincial standards is to be avoided. At minimum, NAFTA's trade officials should be required to consult with the CEC and national environmental ministries in dealing with environment-related trade disputes. In the matter of NAFTA Chapter 11 challenges to environmental rules, the CEC has already proffered its advisory services to the Free Trade Commission, an offer the FTC should accept.

NAFTA's most constructive policy contribution has been the development of new international institutions and initiatives for environmental protection in the trinational region. Operating with very limited resources, these institutions have performed judiciously and shown their value. Thus far, however, the three governments have not allowed these auxiliary bodies to function to their potential. Neither the CEC, BECC, nor NADBank have been adequately funded, resulting in staff shortages, fewer programs, and less efficient performance of mandated functions. The federal governments should augment budgetary support for these institutions and allow them to respond more effectively to public concerns.

Additional refinement at the level of operating procedures and organizational practices is also necessary. The CEC should strengthen its ties to NAFTA's economic institutions and deepen its consultative relationship with other NAFTA environmental bodies and programs. CEC's council should move quickly to develop the necessary procedures to implement its Chapter V dispute resolution process. The CEC secretariat must continue to monitor and assess its citizen submission process, taking care, on the one hand, to support and improve citizen access to these procedures and, on the other, to preserve and strengthen its reputation as an independent and fair-handed body. At the program level, if the CEC is to emerge as the leading independent body for assessing NAFTA's impact on the North American environment, then it must move quickly to refine its evaluation framework and to apply it broadly to the analysis of sectoral trade and environmental issues. The CEC should also hasten to conclude a trinational agreement on transboundary environmental impact assessment.

Along the U.S.-Mexico border, after a slow start, both BECC and NADBank have made headway in certifying and funding projects for needy communities. BECC is unquestionably an institutional model of transparency and public participation in developing water and wastewater projects that serve both environmental and social aims of sustainable development. BECC should, however, show that it is willing to consider meritorious projects not specifically tied to urban water provision and wastewater treatment. It should also be encouraged to make better use of its advisory board and to take every opportunity to ensure that the Mexican public is participating in decisions that affect Mexican communities. Notwithstanding its recent efforts to better utilize BECC as a platform for soliciting public input in funding decisions, NADBank is still too insular and should open its doors to greater public scrutiny. Together, these linked institutions must strive to improve public access and input opportunities and must insure that interested parties and stakeholders are better informed.

The Border XXI Program also needs attention. Its current menu of federal, nation-to-nation projects is not enough. The two governments should give greater attention to the practical matter of bolstering the capacity of state and local regulatory bodies, NGOs, and the social sector. In this regard, the governments should lend their support to such innovative grassroots initiatives as the El Paso-Ciudad Juarez binational air shed task force, an outstanding model for involving local actors in long-term cross-national efforts to mitigate pollution and improve public health. At the program level, leading initiatives should be clearly prioritized, consistently funded, and better coordinated amongst participating agencies. For instance, Border XXI's national coordinators should hasten to apply and refine its new environmental indicators so that accurate appraisals of environmental conditions can guide public policy improvements.

In sum, NAFTA is a first step in the direction of bridging the policy gap between trade and environment. NAFTA's various environmental initiatives should be supported and strengthened, and, at minimum, incorporated into future trade agreements. At the global level, NAFTA's shortcomings indicate what should be done to strengthen the prospects for sustainable development in future accords. First and foremost, environmental machinery, now largely relegated to secondary or sideline status, should be built into trade agreements along with action-forcing compliance mechanisms. Environmental ministers should be able to vet and veto environment-degrading trade initiatives. Environment secretariats should be strengthened and made more autonomous, with independent investigative abilities. Trade and investment panels should coordinate their work with the environmental secretariats to insure consideration of environmental values. Second, participating governments must pay greater attention to implementing details. They must follow through with procedural rules and practices that give substance to formal mandates. Third, governments must invest additional resources in the institutions charged with monitoring and enforcing these agreements. Sustainable development requires no less.

Stephen P. Mumme, Colorado State University