Statement on the North American Free Trade Agreement
by William K. Reilly
[Statement - August 13, 1992]
Yesterday President Bush, Ambassador Carla Hills, and the governments of Canada and Mexico announced the completion of negotiations for a North American Free Trade Agreement. Once this agreement is ratified by all parties, it will create the largest single free market in the world. It will create hundreds of thousands of jobs in all three countries. It will reduce the cost of many consumer goods. It will help the nations of North America compete more successfully in the global marketplace.
And, I am pleased to add, NAFTA will help improve the quality of the environment throughout North America. This is the most environmentally sensitive, the "greenest" free trade agreement ever negotiated anywhere. Because it integrates economic and environmental concerns to an unprecedented degree, it marks a watershed in the history of environmental protection. In the future, when other nations negotiate with their neighbors to open up markets, NAFTA will be the model.
A number of environmentally beneficial provisions have been incorporated into the North American Free Trade Agreement. First, NAFTA safeguards existing U.S. health, safety, and environmental standards by allowing any party to deny entry to products that do not meet its national standards. Moreover, NAFTA protects states rights.
It allows regional subdivisions in NAFTA countries--like our states--to enact standards tougher than national standards. NAFTA also includes a voluntary process to make environmental standards more compatible among parties, but that process will not lead to lower U.S. standards. In fact, NAFTA includes explicit language encouraging parties to "harmonize upward," to work toward compatible standards that are more protective, not less.
Second, NAFTA permits each party to impose stringent environmental requirements--like environmental impact studies--on investors, as long as they are applied equally to domestic as well as foreign investors. It discourages parties from backing away from environmental laws and practices to attract investors.
Third, this agreement includes several provisions that, while not explicitly environmental, will improve the environment. NAFTA will speed the movement of truck traffic through U.S.-Mexican border crossings, thus decreasing congestion and improving air quality. It will open up markets for products--like natural gas--and firms--like environmental service companies--that bring environmental benefits.
Besides the environmental provisions in the trade agreement itself, Mexico and the United States have undertaken an ambitious bilateral environmental protection program. Under a 1989 Mexico City Agreement, EPA and the Department of Energy are working to improve Mexico City's air quality. Our two countries also are cooperating to protect the Gulf of Mexico under our Wider Caribbean Initiative.
Last February, our two countries signed a comprehensive plan to protect the environment in the border area. Mexico has committed $460 million over the next three years to pave roads, build wastewater treatment systems, and improve solid waste collection and disposal. President Bush has requested $241 million in his FY 1993 budget to build drinking water and wastewater treatment systems, track hazardous waste, facilitate emergency response, monitor environmental quality, and inform and educate the public along the border.
To those who suggest this plan does not go far enough, I note that President Bush is prepared to go further than the U.S. Congress. Both the House and Senate have reduced the President's request for EPA border area environmental projects by about $100 million.
The United States and Canada have a long history of cooperating on environmental protection. Through the 1909 Boundary Waters Treaty, the Great Lakes Water Quality Initiative, and the International Joint Commission, we have made substantial progress protecting water quality along the U.S. northern border.
More recently, we have established the U.S.-Canadian Air Quality Agreement, and we are working together to reduce acid rain. The United States and Mexico have begun to make similar progress along our southern border. On September 17, the heads of the environmental agencies in all three countries will meet together for the first time to discuss a coordinated, trilateral approach to protecting the environment across all of North America.
The three great nations of North America are rapidly becoming better neighbors, stronger allies, richer trading partners. All our people--all North Americans--will enjoy the economic and environmental benefits.
The U.S. Congress will soon begin to wrestle with the question of NAFTA ratification. Some will argue that NAFTA should be voted down on environmental grounds, that free trade will pull down U.S. environmental standards and degrade the Mexican environment, while costing U.S. jobs.
I disagree. We should not be lulled by the arguments of trade protectionists, even if they are disguised as environmentalists. And we will work to educate the genuine environmental skeptics about the strength of the environmental commitments in the NAFTA. Free trade in North America will be good for the economy, and, because of the provisions of NAFTA, it will be good for the environment as well. If Congress doesn't ratify NAFTA, it will be the environmental mistake of the decade. If it does, we will witness a new era of economic and environmental progress continent-wide.