International trade can be a force for elevating living standards and improving environmental protection in the world’s poorest countries. But unless trade agreements contain strong environmental rules, they may undermine the protection of natural resources. For that reason, environmental groups in both the U.S. and Central America joined in opposing the recent Central America Free Trade Agreement (CAFTA).
One of the world’s most biologically diverse regions, Central America has already lost more than 70 percent of its forest cover. CAFTA’s weak and mostly unenforceable environmental provisions are not adequate to protect these dwindling resources. The treaty only requires countries to enforce their own laws, a provision rendered meaningless by the lack of even basic environmental laws in countries like Guatemala and Honduras.
In addition, CAFTA allows multinational companies to sue countries for compensation if an environmental law reduces their profits. Similar language in the North American Free Trade Agreement has already prompted companies to sue the U.S., Canada and Mexico over laws that protect public health and natural resources. The threat of more such lawsuits could freeze environmental progress in Central America by discouraging poor governments from passing new conservation laws.
On June 30, 2005, the Senate approved S. 1307, CAFTA’s implementing legislation, by a 54-45 vote (Senate roll call vote 170). NO is the pro-environment vote.