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U.S. Trade and Investment Agreements
Free trade agreements can be bilateral (between two countries) or multilateral (among several countries). In the past decade the United States has entered into several trade agreements that liberalize the trade of goods between the participating countries. All bilateral or multilateral FTAs include environmental commitments.
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The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico, includes environmental commitments in its text, and is accompanied by a complementary environmental side agreement – the North American Agreement on Environmental Cooperation (NAAEC). The NAAEC includes a dispute settlement process that can be initiated if a Party is suspected of a persistent pattern of failure to enforce its environmental laws. Additionally, the NAAEC provides a mechanism whereby any non-governmental organization or person of one of the three countries can assert that a Party is failing to enforce its environmental laws.
The NAAEC also created the Commission for Environmental Cooperation (CEC). The CEC was established to address regional environmental concerns, help prevent potential trade and environmental conflicts, and to promote the effective enforcement of environmental law. In doing so, the CEC also promotes environmental cooperation and monitors the environmental effects of the NAFTA.
Learn more about:
- North American Free Trade Agreement (NAFTA)
- North American Agreement on Environmental Cooperation (NAAEC) Exit
- Commission for Environmental Cooperation (CEC) Exit
Under the Trade Act of 2002, several additional bilateral trade agreements were negotiated, including Australia, Singapore, Peru, Chile, Bahrain, Morocco and Oman.
The now-expired Trade Act required that all bilateral and regional FTAs include environmental provisions within the agreement and stated that the parties shall strive to ensure that they do not relax domestic environmental laws to encourage trade, and that the parties shall not fail to effectively enforce their environmental laws.
The United States also negotiates cooperative activities in parallel with FTA negotiations to provide trade-related environmental capacity building.
The United States is required by Executive Order to perform environmental reviews of all comprehensive trade agreements. EPA and other agencies play a significant role in this new environmental review process, which is coordinated by the U.S. Trade Representative (USTR) and the Council on Environmental Quality (CEQ).