Free trade and the environment: Critics can’t agree, but harmonization of policy may be a blessing for our environment

Lawrence Solomon
Brandon Sun
November 18, 1988

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The environment has been one of the hottest election issues going but the Canadian Wildlife Federation – Canada’s largest conservation group – and Pollution Probe – Canada’s largest environmental advocacy organization – haven’t received much press during the campaign.
The cameras, instead, have been focused on those prepared to make unequivocal predictions: tub-thumping free traders like federal negotiator Simon Reisman, who have insisted the deal won’t affect the environment in the least, and fervent anti-free traders like the Canadian Environmental Law Association, who have claimed the free trade deal will lead to our environment’s certain destruction.
The public has yet to hear from the large middle ground – those environmental organizations, including my own, that do not see the deal in black and white terms. While the deal has pitfalls, some of these groups say, it also has the potential to be an environmental winner.
When Canadian and U.S. negotiators hammered out the agreement, the environment was the last thing on their mind. The intent of both parties, it is clear, was to increase the rate of resource exploitation in Canada, without regard for the environmental harm that would result.
But because neither negotiator had an environmental background, or consulted environmentalists in the drafting of the deal, they didn’t realize the deal’s other requirements could scotch their intended rape of the countryside.
Consider this scenario: Over the next five to seven years, Canada and the U.S are back at the negotiating table to define what constitutes a subsidy. The powerful U.S. lumber lobby, which has suffered at the hands of subsidized Canadian exporters for decades, argues that the Canadian provinces, which own our forests, have been handing out logging licenses for a song to Canadian forestry giants like MacMillan-Bloedel. As a result of these cut-rate contracts, it argues, Canada has been deforesting its lands at the rate of Third World countries while the U.S. has as much forest land today as at the turn of the century. Joining the fray on the side of the U.S. lumber barons are Canadian environmentalists and our native peoples who confirm the damage that subsidies have wrought. The negotiators rightly decide to consider these Canadian subsidies unfair, with the result that deforestation is halted in Canada.
This scenario could be repeated in coal, potash, and other resource sectors (except oil and gas, whose exemption from the free trade deal’s anti-subsidy provisions was condemned by environmentalists), if the U.S lobbies that have had their oxen gored by Canadian government subsidies prevail. Helping them every step of the way will be Canadian environmentalists, including those who are currently against the deal.
This scenario, of course, represents the best that environmentalists can hope for, and scenarios that entrench destructive resource practices can just as easily be conjured up.
But the silver lining in the free trade cloud hanging over Canadians has prompted environmentalists like the Canadian Wildlife Federation’s Stephen Hazell to speak out.
“There has been a lot of negative trashing of the deal,” says Mr. Hazell, the federation’s legal counsel and author of its brief to the federal government on free trade. “It’s not enough to say we don’t like the deal – scrap it. We have to point out the deal’s positive aspects.”
No environmental group, including the wildlife federation, is prepared to give the free trade deal an outright endorsement, but this group, Pollution Probe, and others would be willing to give free trade a chance if the deal could undergo and survive an environmental assessment. Without such an assessment, they argue, everyone is operating in the dark.
For example, environmentalists of different stripes find cause for hope and fear in the same provision in the deal – the section encouraging harmonization of standards on both sides of the border. Those opposing free trade claim that wherever standards differ between the two countries the increased pressure to compete will inevitably reduce them to the lowest common denominator.
Optimists argue that because U.S environmental standards are generally higher, harmonization will tend to force Canada’s upwards, and that the experience in the European Common Market – where harmonization has lifted standards – disproves the “lowest common denominator” argument. A landmark decision in September in the European Court, the European Commission’s top judicial body, adds weight to their argument: the court ruled that environmental protection can take priority over trade under common-market treaties, leading the Wall Street Journal to conclude “the smart money is on the environmentalists” in the raging European debate over harmonization.
North America is not Europe and the best guess about what the future holds there, as here, is still only a guess. But the division over the Canada-U.S free trade pact also highlights the different approaches environmental groups take toward solving our global problems.
For example, our deal may ultimately prevent governments from providing clean-up subsidies to polluting industries. While some environmental groups would object to our government’s inability to pay for a scrubber at INCO or for nuclear waste disposal, other groups, including Energy Probe, would welcome this outcome: they insist that polluters, not taxpayers, be made to foot the bill, to enforce accountability and to discourage future pollution.
Strictly speaking, almost nothing in the free trade deal guarantees either higher or lower standards (the only exception being the removal of some transportation subsidies, which would help the environment), and many objective observers concede that – depending on future events – standards could move in either direction.  Ironically, if the deal does curb wanton resource extraction – as seems quite possible – it will do so by thwarting the intent of its drafters.
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