Sierra Club of Canada

Forgotten Promises and Forgotten Lessons:
The OAS, the FTAA and Environmental Protection

Speaking Notes of Christine Elwell, Senior Policy Analyst, Sierra Club of Canada

OAS Teach In “OAS Corporatizing the Hemisphere”, Saturday May 27th, 2000, Innis College Town Hall, University of Toronto and at International Centre for Democratic Development, June 5th Workshop, Windsor, Ontario

Forgotten Promises and Forgotten Lessons: The OAS, the FTAA and Environment Protection

While the Organization of American States is not primarily a trade organization, its complicit role whether by design or by incompetence in furthering an environmentally destructive path of trade and investment liberalization in this hemisphere is undeniable. That the Canadian Ambassador dismisses those concerned with the environmental content of trade as the “newest Luddites” speaks volumes of the government’s failure to listen to Canadians, and to learn the lessons of Seattle at the WTO, and at Washington with the World Bank.

That the purpose of this OAS meeting is to “set the non-trade part of the agenda” for next year’s Free Trade Area for the Americans (FTAA) Summit in Quebec in April, 2001 is clear evidence that the OAS and the FTAA project continue to deny the connections between trade liberalization and environmental stress. The environmental degradation induced or at least aggravated by free trade is not a “non-trade” issue to be separated out into remote baskets for discussion later on, if at all. All the evidence points to the direct links with public health concerns Ð fatal water quality, smog related pre-mature deaths, climate change and genetically altered foods. At the same time, the public sees the steady decline of the government’s interest in and capacity to protect the public interest with strong environment and conservation measures. There are many examples of negative environmental impacts related to undisciplined free trade.

The OAS was supposed to play a critical role to ensure a coherent and complementary approach to economic development, environmental protection and social justice. The failure of the OAS to fulfil this role effectively promises to see the failure of all agendas. These are not merely technical matters as Ambassador Peter Boehm would have us believe. The Organization of American States (OAS) includes the same 34 member states of the Summit of the Americas, including the NAFTA parties <small>Ê (the 35th OAS member State, Cuba, has been suspended since 1962).Ê In preparation for a more active OAS, it has been given new responsibilities to implement Summit of Americans plans of action around economic integration and trade liberalization, as well as other agendas including the elimination of poverty and sustainable development.

Only by dealing with environment, economy and social justice together can we get to a state of sustainable development. Remaining in our separate so-called non-trade baskets will only lead to unsustainable development. The Copenhagen Declaration of the 1996 World Summit for Social Development acknowledged the aggravation of poverty is due to unsustainable patterns of consumption and production. This finding is particularly important when considering the expansion of NAFTA disciplines south, given the risk of very negative impacts environmental and social impacts. Indeed, according to the World Bank, while the southern part of the Americas has the highest per capita income in the developing world, it has the worst records of income distribution. Extreme poverty, when combined with inequitable income distribution policies has often led to political instability. Forcing market liberalization and privatization has not gone well as the recent Bolivia water situation illustrates where angry people revolted against the World Bank’s brokered deal with British Bechtel to privatise water supplies and delivery.

But instead of being able to report that the OAS is doing great things to ensure sustainable development in the Americas generally and the FTAA project in particular, the fact is that the OAS has dropped the ball. The following review of the Summits will provide the basis for this sorry conclusion. The OAS and its political leadership must account for this failure of public policy. The OAS Role in the FTAA Project: Miami Summit

(Miami, or First) Summit of the Americas took place in Miami, December 9 to 11, 1994. The meeting produced a Declaration of Principles and a Plan of Action signed by all 34 Heads of State and Government in attendance. The Declaration of Principles established a pact for development and prosperity based on the preservation and strengthening of the community of democracies of the Americas. The document sought to expand prosperity through economic integration and free trade; to eradicate poverty and discrimination in the Hemisphere; and to guarantee sustainable development while protecting the environment. These new OAS mandates stem from the first summit in Miami.

One of the most important initiatives to emerge from the Miami Summit was the agreement to work towards creating a Free Trade Area of the Americas (“FTAA”).Ê The FTAA was to provide free market access for goods and services to the entire continent.Ê With a population of 800 million and a GDP of 11 trillion US, the FTAA would be the largest free trade area in the world.Ê In order to realise this ambitious trade area, a Tripartite Committee, composed of the Inter-American Development Bank, the Organization of American States, and the United Nations’ Economic Commission for Latin America and the Caribbean, was created in order to provide technical support.

Bolivia Summit of the Americas on Sustainable Development: The Non-Summit

Another important initiative from the Miami Summit was the inclusion of a proposal from the President of Bolivia, Gonz‡lo S‡nchez de Lozada, to call a specialized Summit on Sustainable Development to be held in Santa Cruz de la Sierra, Bolivia in 1996. The objectives of the specialized Summit were to establish a common vision for the future according to the concepts of sustainable development and to ratify the principles subscribed to at the 1992 Earth Summit held in Rio de Janeiro, Brazil. But they forgot to invite civil society and thus the so-called summit happened with just governments and major CEO’s of TNCs. It was at that summit where the decision was made to separate out in two tracks the trade agenda from everything else around sustainable development.

The OAS was left with no resources and no momentum to monitor the 65 initiatives that came out of the Sustainable Development Summit and the so-called Santa Cruz Action Plan. Importantly: a Healthy Environment requires: “Understanding and integrating environmental considerations, with social and economic” and “ensuring that adverse environmental effects are identified, prevented, minimised, or mitigated”; Public Participation requires: “Promoting increased opportunities for the expression of ideas and the exchange of information and traditional knowledge on sustainable development between groups, organisations, businesses, and individuals, including indigenous people”; and Development and Transfer of Technology requires: ”Developing and implementing environmentally sound and effective technology”. The OAS recognised that the success of these initiatives in forests, on energy, depended also on the government’s willingness to adopt the sustainable development paradigm as the overall framework for their public policies in order to ensure effective and coherent integration of social, economic and environmental goals. But the governments of the Americas have in fact rejected this concept of development.

The Bolivia Summit created a number of technical and political institutions. The Unit for Sustainable Development and Environment was to be the principle arm of the OAS to follow up on Rio 92 mandates and the mandates given to the OAS from the Bolivia Summit of the Americas. To achieve this objective, the new political body the OAS Inter-American Committee on Sustainable Development would exchange the relevant information and co-ordinate activities with the USD. But rather than the Unit engaging in a thoughtful Environmental Impact Assessment of the various trade negotiating committees of the FTAA, the main function appears to be preparing projects for loan consideration by bilateral and multilateral agencies such and the Inter-American Development Bank and the World Bank. We know from Washington last month the horror stories of Bank development from an environmental perspective.

Instead of consolidating environmental protection and sustainable development into a coherent whole with economics and trade, the issues have remained split. It is no surprise, therefore, that all of the political energy goes to trade liberalization and the environment is hardly on the map for the OAS in Windsor, or for the Third Summit of the Americas in Quebec in April 2001. The Bolivia Summit is considered the failed summit and it was a turning point in the FTAA project to separate out trade and environment discussions Ð so much for sustainable development! Second or Santiago Summit in April 1998

The Santiago Summit saw the complete removal of sustainable development from the goals and agenda of the FTAA project. The result of these deliberations produced a Declaration and Plan of Action of Santiago which contained 27 initiatives, grouped into the following subjects: Education, the principal matter of the Summit, Preserving and Strengthening Democracy, Justice and Human Rights, Economic Integration and Free Trade, and Eradication of Poverty and discrimination. But for now, these social policy issues could wait so as not to overload the free trade agenda, optimistically expected by a FTAA in 2005.

Nine trade negotiating groups were established and held their first round, each of which have significant environmental content: market access, including tariffs, rules of origin, customs and technical and standards, barriers agriculture, including market access, sanitary and phytosanitary rules, and other agricultural trade rules, services, investment, government procurement, subsidies, antidumping and countervailing duties, competition policy, intellectual property rights, and dispute settlement. These subject matters and agendas complement and deepen the economic integration models of NAFTA and the WTO. As in the case of the WTO, the traders hope to see a number of so-called early harvest agreements in particular sectors on forestry, on energy, on fisheries before the hard trade-offs need to be made, if at all. These early harvest agreements are a disaster for environmental protection and public oversight. Each trade group has deeply fundamental and more or less well-identified concerns from an environmental and public interest perspective. But instead of a coherent plan to avoid or mitigate the negative impacts, governments give vague assurances that environmental issues will be dealt with on a case by case basis…so much for Rio!

Environmental Content of Trade

What about the environmental content of trade”? Indeed how can civil society endorse a quick agreement in forest products, when no work has been done whatsoever on the Partnership for Biodiversity, promised at Bolivia? Every single trade group deals with enormous environmental and social policy content.

Waste Trade

Take the market access group for example. Draft language being development by the FTAA negotiators since 1998 would create a stream lined electronic tracking system for customs officials throughout the Americas to use. The system would apply to so called low value commodities that are less than $2000 in value. This language could cover most shipments of hazardous and infectious waste; the value of such is often low or even negative in value. These fast track approval systems being put in place risk large quantities of waste being imported into Canada or other countries in the hemisphere without adequate treatment facilities or even the knowledge of environment officials, let alone the general public. There are not even tracking codes for custom officials to follow. USEPA has asked for exemptions from expedited customs rules for wastes but so far Commerce has overruled US EPA.

Investment or Pay the Polluters

We know that the NAFTA is as much an investment agreement as it is a trade liberalization agreement We have the experience under NAFTA Chapter 11 with investor-state dispute settlement behind closed doors that assault environmental and public health laws. And despite the unified voice of Canadians opposed to these investment protection rules in the absence of investor responsibility, the Canadian government continues to seek strong investor protection provisions in an FTAA. Yet when we ask the government to open the door to these disputes, the door is closed on us Ðthere are no documents, there is no opportunity to know the positions taken by our government as they purport to defend our rights to protect the environment, public health and human rights.

Trade in Genetically Engineered Agricultural Products

It is no surprise that the Miami Group, including Canada, the US, Argentina and Chile hope that the FTAA will provide for better market access in genetically altered foods and seeds. It was this group that tried to derail the successful International Biosafety Protocol to the Biodiversity Agreement established in Montreal last January to restrict the transboundary movement of GE products. There restrictions based on serious public health and global environmental concerns are deemed “technical barriers to trade” to be removed by one of the FTAA negotiating groups.

Public Participation in Sustainable Development

At the Bolivia Summit governments “strongly supported the full integration of civil society into the design and implementation of sustainable development policies and programs at the hemispheric and national levels”. The primary goal of the strategy for public participation was to promote transparent, effective, and responsible public participation in decision-making and in the formulation, adoption and implementation of policies for sustainable development in Latin America and the Caribbean. Governments conferred responsibility on the OAS USD to formulate a strategy for the promotion of public participation in decision-making for sustainable development.

But by the time of the Santiago Summit in 1998, and instead of calling for the deepening of wider public participation, transparency and accountability, the text shouted down to civil society declaring “The Governments will bear primary responsibility for implementing the mandates of Summits”. Despite this cold shoulder, civil society meet anyway in Santiago in a Peoples Summit, with an alternative agenda. Elizabeth May attended for the Club and meet with environmental activist from across the hemisphere. We were in Seattle and we’ll be in Quebec for the Third FTAA Summit.

Third Summit - Quebec, April 2001

The main purpose of this Summit is to approve a list of items for “early-harvest” agreements in tradable sectors, in counternarcotics trade, and perhaps even monitoring systems on key goals proclaimed at Santiago on education and health. Leaders are billed to address common hemispheric challenges, including economic integration, improved access to education, poverty alleviation, and enhanced respect for human rights and democratic development. But not the environment!

Lessons From NAFTA

We know the lessons from NAFTA. Ð undisciplined trade and investment liberalization has significant environmental and social justice impacts. Mexico is an ideal example of this proposition. Though NAFTA took effect in 1994, trade liberalization in Mexico began long before that. The transformation has been thorough, and its effects can now be studied. As a first step in such efforts, recent studies have indexed pollution intensity in Mexico and the US.

The creation of a Mexico Ð U.S. pollution intensity index yields striking results. On average, the 12 largest Mexican industries are 70 times dirtier than their U.S. counterparts. This is largely due to Paper and Textiles Manufacturing, which are dirtier the same industries in the U.S. by orders of magnitude. Without these two industries, Mexican manufactures are 6 times dirtier than the U.S. Perhaps more striking is the fact that Other Chemicals (pharmaceutics, etc.), Iron and Steel, and Non-Ferrous Metals are as clean or cleaner than their U.S. counterparts. Total pollution however, while slowing from 1988 to 1994, has close to doubled since. This is not explained only in terms of scale, as economic development proceeds, but also in the composition of pollution, the pollution haven effect. When comparative advantage is derived from differences in environmental stringency, then the composition effect of trade will exacerbate environmental problems.

Not only do we see relatively lax regulations among states; we also see standards of government enforcement on the decline. Where resources are cut from environmental testing, and monitoring, environmental protection and public health suffers declines, as the recent deaths in Walkerton Ontario from contaminated water supplies can attest. We know the lessons of free trade in North American, the inadequacies of the NAFTA Environmental Side Agreement and the lack of a true civil society dialogue. Lets not repeat and further compound these errors in the Americas.

Observations on the Canadian Government’s Challenge

The Canadian government responded to the House of Commons Foreign Affairs Committee report on The FTAA: Towards Hemispheric Agreement in the Canadian Interest, in March 2000. Recall that the Committee conducted a national consultation with the public on issues around the WTO and the FTAA. Many Canadians made submissions, including the Sierra Club of Canada. Despite the overwhelming public concerns with globalization and the role that trade and investment agreements play in the corportization of the planet, the government is forging ahead. And instead of providing the obviously necessary political leadership for the FTAA project by integrating environmental protection and conservation into its trade and investment agenda, as promised at Bolivia, and at Rio, the Government Response to the House of Commons is that each FTAA Trade Negotiating Group “should consider relevant trade and environment issues as they arise”.

Members of the House of Commons Foreign Affairs Committee have asked the Canadian Minister of International Trade to attend the Committee on Wednesday June 14th, in Ottawa to discuss the Response. I suggest we make our presence known at that public hearing, following the OAS meeting in Windsor next week.

The OAS: Stand Up or Shut Down

A new political body was established at Santiago Ð the Summit Implementation Review Group, now Chaired by Canada, to oversee the FTAA project. This Group is responsible for reporting to the OAS General Assembly on progress in fulfilling the Summit Plans of Action. All the evidence points to the removal of strategies for conservation and environmental protection in the FTAA agenda. Unless the OAS takes its mandate seriously on sustainable development, environmental protection and public participation, then it deserves to be placed back on the shelf of insignificance and to be shut down.