NAFTA and the Environment: Decades of Measured Progress

Abstract

The renegotiation of what US President Trump called “the worst trade deal ever” has resulted in the most detailed environmental chapter in any trade agreement in history. The United States–Mexico–Canada Agreement (USMCA) reaffirms the approach to environmental protection under the North American Free Trade Agreement (NAFTA), but also mentions dozens of environmental issues that its predecessor overlooked. Moreover, in line with contemporary US practice, the USMCA brings the vast majority of environmental provisions into the core of the agreement, and subjects these provisions to a sanction-based dispute settlement mechanism. It also jettisons two controversial NAFTA measures potentially harmful to the environment: the investor–state dispute settlement mechanism and the energy proportionality rule. The contribution of the USMCA to environmental governance remains limited, however. The agreement primarily replicates most of the environmental provisions included in recent trade agreements, in particular the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, and avoids important issues such as climate change.

A previous version of this chapter was originally published as “NAFTA 2.0: The Greenest Trade Agreement Ever?” World Trade Review 18 (4): 659–677. This chapter updates the original publication based on the Protocol of Amendment to the USMCA agreed on December 10, 2019.