How Green is the TPP Really? Combining Legalistic and Sectoral Approaches to the Environment

The US government argues that the Trans-Pacific Partnership (TPP), concluded last October with 11 other Pacific Rim countries, “includes the most robust enforceable environment commitments of any trade agreement in history.” But is this really the case? The TPP undoubtedly goes well beyond the multilateral trade rules found in the WTO’s General Agreement on Trade and Tariffs (GATT-1994) that treats environmental protection merely as legitimate grounds for exceptions to trade liberalisation. In the last decade, however, several other bilateral and regional trade agreements have been signed containing stringent and comprehensive environmental commitments. To what extent is the TPP really breaking new ground when compared with these other recent trade deals?

Insights from a novel dataset

We have scrutinised 660 trade deals signed after 1948.  Among these, we identified 310 different categories of environmental provisions, with some extremely common and others found in only two or three agreements. As indicated by Figure 1 the most recent trade agreements tend to include the highest number of environmental provisions.

Figure 1: Increasing average number of environmental provisions per agreement for all agreements

Source: Author’s own.

TPP is not an exception to this trend. It includes 94 different environmental provisions, as defined and categorised in our dataset, making it quantitatively one of the most environmentally-friendly agreements ever to have been negotiated. In terms of number of environmental provisions, TPP is only outstripped by eight agreements, most of which were recently signed by the EU.  

Yet very few of TPP’s environmental provisions are genuine legal innovations. Instead the TPP mainly duplicates provisions from previous agreements. More than 90 percent of TPP environmental provisions can be found in previous US trade deals. The rest is largely inspired by agreements, concluded by other Pacific Rim countries, but also by the European Union. The resulting mix may nevertheless prove a promising formula.

From an American lineage

The TPP heavily relies on the US legalistic approach to environmental protection. This was first established by the Clinton Administration with the 1993 North American Free Trade Agreement (NAFTA) side agreement on the environment in response to fears around “environmental dumping” as expressed by US labour and environmental groups. Since then, every US trade agreement includes a commitment to provide high levels of environmental protection in domestic legislation, and effective enforcement of such laws. Every US trade agreement, including the TPP, also provides that signatories must ensure access to private remedies for violations of their environmental laws and consider violations brought to their attention by the public. These legal guarantees, which remain an almost exclusive feature of US and Canadian agreements, aim at levelling the playing field with trade partners suspected of lousy law enforcement as might well be the case with some TPP countries.

The US penchant for a legalistic and adversarial approach to environmental protection was further developed with the US-Peru agreement in 2007. Ratified after the Democratic Party took control of Congress, the deal was the first of its kind to subject its environmental commitments to the same dispute settlement procedures as its regular trade provisions. It is also the first trade agreement to require complete implementation of a set of multilateral environmental agreements, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the International Convention for the Prevention of Pollution from Ships (MARPOL), and the Montreal Protocol on Substances that Deplete the Ozone Layer. The combined effect of these measures, reproduced in every US trade agreement concluded since, is the extension of trade law’s strong legal teeth to multilateral environmental agreements that are better known for a soft management of nonconformity. Failure to fulfil the environmental obligations of a trade agreement, including the requirement to implement multilateral environmental agreements, can now give rise to the suspension of trade benefits . This is a distinctive feature of recent US trade agreements that is not found in any agreement between third countries. According to a leaked document dated from November 2013, the US was the only country in the TPP negotiations to support making a list of multilateral environmental agreements subject to a trade dispute settlement mechanism, a proposal initially rejected by all the other delegations. But Washington’s position finally prevailed, and it will undoubtedly became one of TPP’s cornerstone measures, although it is not original to it.

US negotiators have also regularly proved keen to protect American regulatory sovereignty from legal challenges, as several US environmental measures have been contested either at the WTO, or through bilateral investor-state dispute settlement (ISDS) arrangements. Following practice established in earlier US agreements, the TPP provides that each party has the sovereign right to establish its own levels of domestic environment protection, and to exercise discretion on prosecutorial and enforcement matters. More specific safeguards and exceptions, also modelled on earlier US deals, can be found in various TPP chapters. For example, a provision in the public procurement chapter states that parties retain the right to require environmental specifications in their tendering process, while an annex to the investment chapter specifies that non-discriminatory actions taken in order to protect the environment should not be considered as indirect expropriations.

Other means provided in the TPP to promote environmental protection are likewise much inspired by previous US trade agreements. Under the TPP, each party must promote public awareness of its environmental laws, encourage the use of voluntary measures and market-based incentives, address barriers to trade in environmental goods and services, cooperate through the exchange of information and joint scientific activities, build the capacity of developing countries, and facilitate public participation in the development of environmental measures. These measures are relatively common in recent trade deals and, while not specific to US agreements, are present in many of the most recent.  

Borrowing the European sectorial approach

In addition to the duplication of these provisions of general application found in earlier US agreements, the TPP adds several articles on specific environmental matters, such as ozone depletion, ship pollution, invasive alien species, automobile emissions, and fisheries. The number and the specificity of these sectoral provisions is unprecedented in US trade agreements. 

This sectoral approach to environmental protection, however, is relatively common in European deals. Since the early 1990s, European negotiators have often included specific and detailed environmental provisions in their trade agreements, usually tailored to the particular ecological context of their trade partners. For example, a 1991 agreement with Hungary has specific articles on forest, flora and fauna, the 1995 agreement with Lithuania includes environmental clauses on fisheries and energy, the 2002 agreement with Lebanon addresses desertification and forest pasture among other specific environmental issues, a 2008 agreement with the Caribbean Forum has articles on sustainable tourism and green energy, and the 2014 agreement with Moldova has chapters on mining, fisheries, transport, energy and climate action, all of which deal with sustainability issues.

In recent years, as indicated by Figure 2, an increasing number of countries, especially those that had previously signed an agreement with the EU, have reproduced this sectorial approach in deals with third parties. Among these, Peru could have been one of the transmission belts of this approach into the TPP, as its recent trade agreements frequently cover specific environmental issues. In fact, the US-Peru trade agreement was one the first American trade agreements to include detailed provisions on specific environmental issues, including a copious eight-page annex on forest governance and a side understanding on biodiversity.

Figure 2: Diffusion of the European sectoral approach

Legend:  Blue: Agreements with at least one European country
Purple: Agreements signed by a country, which has previously signed an agreement with a European country
Red: Other agreements

For its part the TPP cumulates a greater number of sectoral provisions that any other agreement, including recent European deals, addressing in total 17 different environmental issue-areas. Several of these provisions are more detailed and stringent than earlier iterations. Some were duplicated from other agreements concluded by TPP countries, such as restrictions on fisheries for bycatch of non-target species that can be found in a previous Australian deal, and cooperative measures on invasive alien species that are already present in some US agreements. But other provisions are genuine regulatory innovations, without any precedent in other trade agreements, including the prohibition of harmful fisheries subsidies.

Promoting further best practices 

The NAFTA side agreement on the environment and the US-Peru deal were two breakthroughs in the trade and environment nexus. The TPP represents another major leap forward, but less for its innovations, and more for its combination. By mixing the traditional US legalistic and adversarial style with a sectorial approach more commonly found in European treaties, the TPP is the most elaborated environment chapter ever to have ever been concluded. It is substantially more detailed and specific than any other US agreement, but legally more enforceable than any European agreement. 

The TPP, however, has also missed some opportunities to copy progressive environmental measures found in other trade agreements. The deal illustrates that breaking ground on environmental protection can either come from regulatory innovation or regulatory imitation. And there is still plenty of room to draw lessons from other experiences and reproduce provisions found in other little known agreements. The TPP notably makes no explicit references to climate change, as opposed to the recent Peru–Korea agreement, or the EU–Moldova agreement.  Nor does it mentioned the recent Nagoya Protocol on access and benefit-sharing around genetic resources, as opposed to the 2013 agreement between Colombia and Korea. Likewise, TPP’s investment chapter does not include a provision stating that measures requiring the use of specific environmental technology should not be considered as prohibited performance requirements, although it is found in several agreements signed by Canada, Chile, Mexico, and Peru – four TPP countries. Considering the rapid degradation of coral reefs in the Pacific region, it is also disappointing that TPP does not duplicate provisions of some earlier US agreements – notably with Jordan and Australia – regarding the protection of coral reefs. It is finally notable that the TPP makes no reference to key principles found in recent European treaties, such as the prevention principle, the precautionary principle and the polluters pay principle. Even though the TPP remains one of the most environmentally friendly trade agreements – assuming that is not an oxymoron – this short list of examples suggests that there is still room to enhance future deals, simply by combining the most progressive provisions of earlier agreements.