North American Free Trade: Issues and Recommendations

By Gary Clyde Hufbauer; Jeffrey J. Schott | Go to book overview

7 Environmental Questions

The 1991 congressional debate on extension of fast-track authority for the nafta negotiations pushed environmental issues front and center. At one point, many prominent environmental groups were arrayed with organized labor in a broad coalition against the US-Mexico talks, but in the last weeks of the debate, the National Wildlife Federation announced its support of the nafta negotiations as the best way to make progress on a range of difficult questions.1 The National Audubon Society, the Environmental Defense Fund, and the Natural Resources Defense Council remained quiet on the issue, while other groups such as the Sierra Club and Friends of the Earth voiced strong opposition ( Inside U.S. Trade, 24 May 1991, 7).

Before plunging into the details of the controversy, it must be observed that neither Canada nor Mexico sees the nafta as an appropriate forum for sorting out environmental questions. They fear that the United States, catering to domestic environmental lobbies, will use the nafta to impose its environmental views throughout North America. Canadian and Mexican officials agree that North American solutions are needed for regional problems such as acid rain in the Great Lakes region and air pollution in the Tijuana-San Diego basin. But they do not accept that North American solutions are required for local pollution problems, for example the emissions of petroleum refineries in Houston or Mexico City. From the Canadian and Mexican vantage point, local pollution problems should be addressed locally, according to a timetable that reflects income levels and national priorities,2 and not become a subject of nafta standards dictated by the United States.

____________________
1
Just days before the fast-track vote, the group endorsed the nafta negotiations in a New York Times op-ed ( 19 May 1991, 17).
2
Gene Grossman and Alan Krueger ( 1991), in a study of the relationship between air quality and economic growth, found that at low levels of national income, for some pollutants, concentrations increase with per capita gdp; but at higher levels of per capita gdp concentrations decrease with gdp growth. According to their findings, Mexico has reached the turning point at which further growth will prompt the country to invest more in solving its environmental problems. A similar study done by Ishac Diwan and Nemat Shafik ( 1991) likewise found a turning point at approximately the Mexican level of real per capita gdp. Robert Lucas, David Wheeler, and Hemamala Hettige ( 1991) also found an inverse U-shaped curve for the relationship between manufacturing emissions and gdp,

-131-

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North American Free Trade: Issues and Recommendations
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface xi
  • Board of Directors xiv
  • Acknowledgments xv
  • I - The Political Eonomy of a NAFTA 1
  • 1 - Nafta: Overview and National Objectives 3
  • 2 - The Substantive Agenda and Implications for Nonmember Countries 23
  • II - Economic Implications 45
  • 3 - Trade Effects of a Nafta: a Survey 47
  • 4 - Investment 71
  • 5 - The Maquiladora Phenomenon 91
  • 6 - Labor Issues 107
  • 7 - Environmental Questions 131
  • 8 - Rules of Origin 155
  • 9 - Intellectual Property Issues 173
  • III - Sectoral Analyses 183
  • 10 - Energy 185
  • 11 - Automobiles 209
  • Appendix - Motor Vehicle and Parts Manufacturers in Mexico 234
  • 12 - Steel 243
  • 13 - Textiles and Apparel 263
  • 14 - Agriculture 279
  • 15 - The Mexican Financial System 305
  • IV - Summary and Conclusions 327
  • 16 - Summary and Conclusions 329
  • References 345
  • Index 361
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