The 2016 Comprehensive and Economic Trade Agreement between Canada and the European Union (CETA) and the 2016 Trans-Pacific Partnership (TPP) are two recent trade agreements that include several environmental provisions. Moreover, both CETA and the TPP were innovative in that they include new provisions not found in previous agreements. CETA is the very first trade agreement to explicitly stipulate that water in its natural state is not a product or merchandise and that, consequently, trade obligations do not apply to water. The TPP is the first signed trade agreement to favour the elimination of subsidies that contribute to overfishing.
CETA inspired by European model, TPP reflects American approach
There is nevertheless significant variation between CETA and the TPP, as the figure above suggests. CETA appears to have been inspired in part by the European model. It integrates several environmental principles that are more often found in European agreements than in North American agreements, such as the precautionary principle and the polluter pays principle. CETA also expressly refers to climate change.
It requires parties to prioritize trade in environmental goods and services related to renewable energy sources, and to cooperate in their climate change adaptation and mitigation policies. The TPP, in contrast, does not mention “climate change” at all.
The TPP largely reflects the American approach; this is evident in its dispute resolution provisions. For instance, if one of the parties to the TPP does not respect its environmental obligations, the other parties can impose a trade benefits suspension on that party. This adversarial approach is typically American, and is absent in European agreements.
US and EU trade agreements are conforming
The differences between CETA and the TPP should not be overemphasized, however. In many respects, European agreements are becoming Americanized and American agreements are becoming Europeanized. CETA, for example, clearly specifies that environmental measures do not usually constitute indirect expropriations. Foreign investors that consider they have been harmed by an environmental measure cannot claim compensation from the government that enacted the measure. This is a direct lesson from the experience of NAFTA ’s chapter 11, and reflects contemporary North-American practices. On the other hand, the TPP borrowed from the European model the idea of addressing a series of specific environmental issues in addition to very general environmental protection rules. The TPP includes clauses dealing with protection of the ozone layer, ship pollution, invasive species and biodiversity. Prior to the TPP, this issue-specific approach was more typical of European trade agreements.
Yet, the TREND database reveals that several other environmental clauses that can be found in other trade agreements are absent of CETA and TPP. These include clauses on agro-environmental methods, natural heritage sites, mercury emissions, organic food certifications, and traditional ecological knowledge. While CETA and TPP are two trade agreements with a high number of environmental clauses, they are not as ‘green’ as they could be.