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Conference to examine environmental issues resulting from NAFTA and their impact
Nov. 1, 2001
BLOOMINGTON, Ind. - Much has been written about the impact of the North American Free Trade Agreement on employers and employees in the United States, Canada and Mexico. Yet, after eight years, some of NAFTA's institutional provisions -- including those concerning the environment -- are only now beginning to have a significant effect.
A day-long conference next Wednesday (Nov. 7) in Indianapolis, "NAFTA and the Environment: Doing Business in a Free Trade World," will address the trade agreement's environmental policies and related politics of doing business. The conference will feature Ambassador William Pryce, vice president of Washington, D.C. operations for the Council of the Americas, as well as economists, trade officials and business leaders from all three countries.
The conference is being presented by the Global Business Information Network (GBIN) in Indiana University's Kelley School of Business, with support from the Canadian and Indiana governments, Union Planters Bank and IU's Center for International Business Education and Research. It will begin at 8 a.m. at the Indiana Convention Center in Indianapolis.
According to Alan Rugman, L. Leslie Waters Chair of International Business at the Kelley School and the conference chair, NAFTA contains provisions which enable foreign investors to seek regulatory relief or monetary compensation from a government by means of binding arbitration, under certain conditions. Such conditions include unfair governmental treatment of an investor or investment or the expropriation of foreign investment.
To date, 14 cases involving investor-state disputes have been decided through this arbitration process. For example, U.S. Ethyl Corp. received $13 million (U.S.) from the Canadian government after it banned the trade of a gasoline additive. Another U.S. company, Metalclad Corp., received $16.7 million (U.S.) from the Mexican government.
Rugman said that NAFTA also includes provisions for environmental groups and other non-governmental organizations to bring appeals to the NAFTA Commission on Environmental Co-operation (CEC), based in Montreal.
"Under Article 14 of the North American Agreement on Environmental Cooperation, NAFTA's environmental component, any non-government organization or person may appeal to the Secretariat of the CEC asserting that one of the NAFTA nations is failing to effectively enforce its environmental laws," Rugman said. "Thus, Article 14 confers power to members of the public similar to that held by the governments involved to ensure that each country is enforcing its environmental laws.
"As the environmental provisions of NAFTA, and potential provisions of future trade agreements, begin to play a larger role in U.S.-Canada and U.S.-Mexico trade, the negative and positive effects will likely be as well publicized as the labor and other effects have been to date," he said. "This conference will provide businesses that will be affected by these provisions valuable and objective information on how their businesses will be impacted, how to work to comply with these provisions, and how to continue to successfully create and maintain trade relations with both."
Indiana relies heavily on Canada and Mexico as significant export destinations. In 2000, 47 percent of Indiana's total $16.5 billion in exports went to Canada. Also last year, exports to Mexico from Indiana increased by 173 percent, making it Indiana's second largest export destination, behind Canada, at $2.2 billion. No other country comes close to these two, with the United Kingdom the next closest at $890 million.
"Because of the significance of these trade relationships, we must continue to foster and develop trade relations between Indiana exporters and their current and potential customers in Canada and Mexico, helping to ensure that companies on both sides understand and comply with both NAFTA and the Free Trade Agreement of the Americas provisions that affect their industries," Rugman said.
Cost of the conference is $180, which includes breakfast and lunch. To register, contact Beth Quevli at GBIN at 812-855-6338 or equevli@indiana.edu. More information also is available on a conference Web site at http://www.gbin.org/nafta.htm.
GBIN is a research and outreach center in the Kelley School. Established in 1994, its mission is to assist companies, non-profit organizations, and government agencies succeed in the global economy by gathering, analyzing, and disseminating information on international markets and global trade.
(George Vlahakia (OCM) 812-855-0846 or gvlahaki@indiana.edu or Beth Quevli (GBIN) 812-855-6338 or equevli@indiana.edu)