An official from the Office of the U.S. Trade Representative this week confirmed that the U.S. is facing opposition from other countries in the Trans-Pacific Partnership talks (TPP) on its proposal to make environmental commitments fully enforceable under the same dispute settlement mechanism as commercial obligations.

In an interview, the USTR official acknowledged that it has always been a “heavy lift” in past free trade negotiations for the U.S. to convince trading partners that environmental obligations should be subject to the same dispute settlement provisions as commercial commitments. “So this has always been a difficult issue and that's the case here” in TPP, the official confirmed.

Still, the official argued that the U.S. has ultimately been successful in past FTAs in achieving full enforceability for environmental commitments, despite initial opposition from negotiating partners. “We've always been successful in bringing our FTA partners along to that view,” the official said.

Informed sources said the opposition from TPP partners on enforceability of environmental commitments extends to countries such as Chile and Australia, which already have binding environment chapters under their existing FTAs with the U.S. (Inside U.S. Trade, May 25).

That said, the U.S. environmental proposal in TPP goes far beyond the scope of the Australia and Chile FTAs, whose only enforceable obligation was for parties to enforce their own environmental laws.

By contrast, the U.S. proposal in TPP, which reflects the May 10, 2007, template, obligates countries to enforce their own environmental laws and also ensure that their laws and regulations fulfill their obligations under any of seven multilateral environmental agreements (MEAs) to which they are signatories. It also prohibits them from derogating from their environmental laws in a manner affecting trade or investment. All of these obligations are enforceable under the normal dispute settlement provisions.

The USTR official signaled that the U.S. is facing resistance from TPP partners over the proposed obligation that countries uphold their commitments under any of the seven MEAs they have signed. According to the official, the U.S. views that obligation as “complementary” to the commitment that countries enforce their environmental laws.

“These have always been difficult issues because they're all linked to dispute settlement under the FTA,” the official said, referring to enforceability and MEAs. “And so everybody's going to take them much more seriously when that's the case, and we have work to do.” The U.S. is “very, very firm” on these two issues, the official added.

Informed sources have said the U.S. is isolated in pushing for binding obligations related to MEAs in TPP. This represents a fundamental objection of other parties rather than dissatisfaction with the seven specific MEAs that are part of the May 10 deal, they said.

Along with core commitments on enforcement of environmental laws, the U.S. proposal in TPP includes new binding disciplines in the area of conservation that obligate TPP partners to maintain domestic laws or regulations prohibiting trade in wildlife or plants that were obtained illegally. The conservation proposal includes more specific provisions on endangered species protection, marine fisheries and illegal logging (Inside U.S. Trade, April 1, 2011).

A third component of the U.S. proposal covers public participation, and reflects language in past U.S. FTAs that allows stakeholders to make public submissions alleging a country has violated an environment chapter.

The USTR official said the U.S. is “pushing hard” to get this kind of public submission process in the TPP, although one source said the U.S. is facing resistance on this demand as well. According to this source, TPP partners may be especially nervous about a public submission process after the Environmental Investigation Agency, a U.S. conservation group, submitted a petition in April urging USTR to invoke a special provision under the forestry annex of the U.S.-Peru FTA to crack down on illegally harvested timber.

Generally speaking, USTR finds itself in a tough spot when it comes to environmental negotiations in TPP. On one hand, its efforts in the environmental chapter itself are supported by U.S. environmental groups like the Sierra Club, who favor the new disciplines that USTR is pushing to include.

On the other hand, even the Sierra Club may end up opposing TPP overall due to objections to U.S. proposals in the TPP investment chapter, which it believes could undermine the environmental chapter by allowing companies to sue governments over environmental regulations, for instance, if they believe those regulations unduly harm their business interests.

The official did not identify any issues that the U.S. intends to focus on in the environment negotiationsduring the upcoming July 2-10 TPP round in San Diego. Instead, the official said the U.S. would be looking to make as much progress possible on as many issues as possible.

Environment negotiators meeting in San Diego may discuss new proposals by Chile on environmental cooperation and fisheries subsidies disciplines, which sources said were tabled either prior to or during the last negotiating round in Dallas in May.

Chile tabled its fisheries subsidies proposal in the trade remedies chapter as opposed to the environment chapter, which sources said likely reflected its desire to have binding fisheries subsidies disciplines even though it opposes making the environment chapter enforceable. After Chile tabled its proposal, TPP countries agreed to defer a discussion on placement and continue addressing fisheries subsidies within the environment negotiating group since that is where the expertise is, sources said.

Source: insidetrade.com