Environmental Regulations and Corporate Strategy: A NAFTA Perspective

By Alan Rugman; John Kirton et al. | Go to book overview

6
Environmental Institutions in Action: The CEC

Arguably the most innovative feature of the NAFTA trade-environment regime came not from the environmental provisions and institutions contained within the trade agreement itself, but in the separate environmental agreement that accompanied, and was critically linked to, the trade agreement. The accompanying North American Agreement on Environmental Cooperation (NAAEC), and the Commission for Environmental Cooperation (CEC) which it created, represent a unique approach to building an international trade-environment regime, and one which has become a model and referent for future regional and multilateral trade liberalization agreements. The NAAEC endowed the CEC with significant new mandatory and permissive powers for environmental surveillance-enforcement, environmental cooperation, and trade-environment integration. It further created an innovative institutional structure composed of a ministerial-level Council, a single regional Secretariat located in Montreal, and a Joint Public Advisory Committee (JPAC) to involve business, environmental non-governmental organizations ( ENGOs), and other stakeholders.

During its first three and a half years in operation, the CEC in its enforcement- surveillance and environmental cooperation functions had an autonomous impact in improving environmental quality in North America, in ways that facilitated trade, constrained national and sub-national regulatory protectionism, and promoted regional regulatory convergence at a high environmental level, to the benefit of industry and citizens in all three countries. But in contrast to the principles, norms, and rules embedded in the NAAEC, the CEC had very little impact in directly promoting the integration and equality of the trade and environment communities. This failure, and the further setbacks the CEC suffered in 1997-8, have rendered it unable thus far to realize its full potential to promote the competitive strategies and interests of North American industry.

The advent of the NAFTA on 1 January 1994, its accompanying North American Agreement on Environmental Cooperation (NAAEC), and resulting Commission for Environmental Cooperation (CEC) brought a potentially major change in the historic pattern of Canada-US environmental governance. In the first instance, NAFTA and NAAEC promised to transform a hitherto almost exclusively bilateral relationship into a new trilateral community, by making many issues, processes, and institutions that flourished along the

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