USMCA – Impact on environmental issues

The United States-Mexico-Canada Agreement (USMCA), which is set to replace NAFTA, concluded on September 30, 2018. Chapter 24 of this trilateral trade deal sets out the framework for environmental issues between the parties.

Here is a high-level summary of this chapter.

Chapter 24 puts an emphasis on USMCA parties cooperating to protect and conserve the environment. It requires each country to maintain an environmental impact assessment process that covers issues related to protecting the ozone layer, protecting the marine environment from ship pollution, improving air quality, preventing the loss of biodiversity, preventing, detecting and controlling invasive alien species, protecting and conserving marine species as well as promoting sustainable forest management. There is no mention of climate change in this chapter.

It also notably takes into consideration the constitutional rights of indigenous people, addresses the important economic, social and cultural role that the environment plays in their lives and recognizes the importance of consulting with them on efforts to enhance the long-term protection of the environment.

Some of the other notable provisions in the USMCA are mentioned below.

Environmental Goods and Services

The parties have agreed it is important to trade and invest in environmental goods and services, including clean technologies spurring potential growth in this important sector.

Ocean and Fisheries Issues

There are many provisions dealing with fisheries management that relate to overfishing, fish stock health, conservation and protection of marine species and marine litter.

Corporate Social Responsibility

The parties have agreed to promote corporate social responsibility and responsible business conduct within their borders by encouraging enterprises “to adopt and implement voluntary best practices of corporate social responsibility that are related to the environment.”

Enforcement  

USMCA’s environmental provisions are designed to allow each party the discretion to decide how best to allocate its environmental enforcement resources. Yet, the parties agree they will enforce environmental laws and not “derogate from” these laws in a manner that weakens them to encourage trade or investment. The USMCA puts a bona fide test in place to ensure each party’s focus and agenda items are in line with the common goal of achieving greater environmental protection.  

It provides for an Environmental Cooperation Agreement with a mechanism for expanding the cooperative relationship on environmental matters, as well as an obligation to establish an environment committee made up of senior government representatives to assist with the implementation.

Conclusion

While the USMCA allows discretion over the specific initiatives a party can prioritize, the parties have agreed to work together towards better protecting the environment and promoting sustainable development.

With special thanks to Brandon Burke, articling student, for his contribution to this article.