Does Freer Trade Mean Lower Environmental Standards?

NAFTA has not created many of the environmental problems that critics had predicted. In fact, its implementation and the debate surrounding it have increased environmental awareness not only in the U.S. but in Mexico as well, which has adopted higher environmental standards since the treaty's inception. With regard to the FTAA concerns by the environmental lobbyists, the likelihood that U.S. domestic environmental policy will be relaxed due to foreign competitors is quite low. The United States is simply too large to be heavily affected by South American producers gaining a slightly larger market share. However, there is a legitimate concern that firms will try to take advantage of lax environmental standards in South American countries. In order to address this possibility, the U.S. should take the lead in drafting environmental legislation to accompany the FTAA, as it did with NAFTA. Specifically, it should outline environmental standards that are to be met by the member countries at certain dates (taking into account that developing countries will experience lags in implementing reform policies). When this is done, North and South America will be able to take full advantage of trade opportunities, and the benefits will not have to come at the cost of the world's environment.

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