A recent Columbia Law Review paper by Timothy Meyer, titled “Free Trade, Fair Trade and Selective Enforcement,” addresses efforts to ensure that trade agreements do not undermine labor and environmental objectives.
Beginning with the original North American Free Trade Agreement in 1994, U.S. trade agreements have contained provisions that prohibit the lax enforcement of labor and environmental laws in order to gain a trade advantage. “The goal of these provisions was to prevent a global race to the bottom in terms of environmental and labor standards,” Meyer said. “These efforts were aimed at ensuring that trade liberalization did not undermine environmental protection and labor conditions for workers, but they have failed to address some of the most substantial risks trade rules create for environmental and labor interests.”
Meyer uses empirical data gleaned from trade enforcement actions in the energy and fisheries sectors to demonstrate that what he terms “selective enforcement” is pervasive–but not in the way anticipated in U.S. trade agreements. He discovered that countries were strictly enforcing trade rules limiting government support for private industry only against “natural resource substitutes” in both sectors, while enforcement against companies and countries that harvest and sell natural resources was lax. “In both sectors, trade laws are enforced exclusively against natural resource substitutes–renewable energy and farmed fish–while the natural resources with which these products compete, fossil fuels and wild fish, are not targeted for enforcement,” he said.
This type of selective enforcement, Meyer argues, amounts to subsidizing businesses dependent on natural resources, while saddling more environmentally responsible natural resource substitutes with additional costs, thus making them less competitive. “When renewable energy or fish farms are more likely to be targeted for enforcement, they incur higher litigation and liability costs and attract fewer investors,” Meyer said. “These costs enable natural resources, such as fossil fuels and wild fish, to sell at a discount relative to their competitors.”
Using selective enforcement of trade rules to give exhaustible natural resources a competitive advantage, Meyer contends, is poor trade and environmental policy. “It spurs unsustainable natural resource consumption and discourages investment in sustainable products,” he said.
While Meyer’s article concludes with proposed reforms to address what he terms the “pernicious effects” of selective enforcement of trade regulations, he advocates a simpler solution: increasing enforcement of trade regulations across the board.
Meyer’s paper was one of five articles selected for publication in the twelfth edition of the Environmental Law and Policy Annual Review, a compendium of the best articles addressing topics in environmental law published during the previous academic year.
Written by Grace Renshaw