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Linking trade growth and the environment: one lawmaker's view.

The proposed North American Free Trade Agreement (NAFTA) presents something of a dilemma for Americans living along the U.S.-Mexico border.

Communities Along the border will generally benefit economically from the lowering of trade harriers between the United States and Mexico. Yet the economic growth spurred by NAFTA is likely to exacerbate a number of already serious environmental problems that exist on both sides of the two-thousand-mile border, ranging from inadequate wastewater treatment to the loss of wildlife habitat.

Border residents worry that, if and when NAFTA is approved, the U.S. arid Mexican governments will talk a good game about improving and protecting environmental quality in the region. But when it comes to actually finding the money necessary to get the job done, both will come up short. It's a scenario that has been played out in the U.S. Congress before.

In January 1992, President George Bush requested $243 million in new spending for a border environmental initiative. Trouble is the Republican Bush Administration wanted to pay for its new program by cutting programs favored by the Democratic-controlled Congress. Not surprisingly, President Bush's proposal garnered little enthusiasm and only $25 million in actual funding.

The border communities of Texas, New Mexico, Arizona and California deserve more than a promise. President Bill Clinton and the Democratic-led 103rd Congress must do better.

How can the new Administration and the Congress avoid a repeat of 1992?

One alternative that merits consideration is to allow both the United States and Mexico to impose a nontrade distorting fee on goods entering their country and dedicate this revenue solely to funding environmental cleanup and infrastructure projects along the border region.

Last year I suggested that an existing U.S. customs user fee be converted into a border environmental and infrastructure fee. As it stands now, the U.S. Customs Merchandise Processing Fee. (MPF) and its Mexican counterpart, the Derecho de Tramite Aduanero, are slated for elimination under the proposed NAFTA by June 30, 1999. The MPF is assessed on commercial imported merchandise, as well as on informally entered goods of a commercial or noncommercial nature. Rather than eliminate these user fees, President Clinton and his trade negotiators should hammer out a supplemental agreement on environment to NAFTA that includes this kind of revenue-raising fee mechanism. In simple terms, the United States arid Mexico should agree to immediately convert the MPF and its Mexican counterpart into U.S. and Mexican Environmental and Infrastructure Border Maintenance Fees, set at equal levels.

From a U.S. perspective, an environmental and infrastructure fee has several attractions. The fee collection process should be easy to administer since, it is essentially a continuation of the current Customs fee. It is not a "new" tax but merely the extension of a current fee which both the U.S. and Mexican business community already consider a part of their normal costs of doing cross-border business.

More importantly, funding for environment and infrastructure would increase as trade activity grows under NAFTA. Fee funding would supplement whatever Federal or state funding is provided to address border environmental problems and the infrastructure needed to handle increased trade resulting from NAFTA. Nor does converting the current MPF into an environment and infrastructure fee undermine NAFTA's tariff elimination objectives. In fact, several user and processing fees imposed by both the United States and the Mexican governments will be allowed to continue under NAFTA.

Lack of secured funding to address environmental problems along the border is one of the shortcomings in the proposed NAFTA language agreed to by the Bush Administration. President Clinton should use this opportunity to link environmental funding to U.S.-Mexico trade growth.
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Title Annotation:Trade and the Environment
Author:de la Garza, Kika
Publication:Environmental Law
Date:Apr 1, 1993
Previous Article:Enlisting the support of liberal trade for environmental protection and sustainable development.
Next Article:A need for education and reconciliation.

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