This essay, written by the Head of the Environment, Economy and Trade Program at the trilateral Commission for Environmental Cooperation (CEC), describes the form and function of this institution born of the NAFTA “side agreements,” and evaluates its achievements and limitations after its first nine years of operation. The piece is framed by two larger political issues: the polarized nature of perceptions of how trade and the environment interact, and the role of transnational institutions in enforcing environmental standards across borders.

Carpentier starts by locating the origins of the CEC in the fears – articulated most effectively by the U.S. environmental movement – that NAFTA and “nature” were not compatible without a set of trilateral rules regarding the enforcement of environmental protection regulation. The environmental movement, for its part, embraced this institutional solution because it recognized “the power of trade agreements and trade sanctions to change the behavior of states and firms in favor of environmental goals” (p. 1). The CEC lacks a supranational mandate, in that the environmental side accord requires only that the three NAFTA governments to enforce their own environmental laws, not a shared trilateral regulatory standard. At the same time, she argues, the CEC’s various institutions, structures, and procedures do have trilateral reach, and have shaped the policy environment over the past nine years in ways that have promoted a better outlook for cooperation on environmental protection issues across the NAFTA governments, much in the way predicted by cooperation theory. For example, ongoing assessments of the impact of free trade on the environment by the CEC contribute to information flows, and the Joint Public Advisory Committee (JPAC) and Article 14 and 15 Citizen Submission Process have extended citizen access and transparency to the enforcement process. The CEC also assists the dispute resolution process by providing experts to give technical advice on high-stakes issues. Next, Carpentier outlines the structure and staffing of the CEC – its Secretariat, and its four program areas: Environment, Economy and Trade; Conservation and Biodiversity; Pollutants and Health; and Law and Policy.

Carpentier next takes a closer look at environmental cooperation in North America, arguing that rather than simply playing a “watchdog” role in the enforcement area, the CEC has evolved its other, cooperation-enhancing functions most over the past nine years. She discusses the evolution of “a shared understanding of an environmental problem” among officials from the three NAFTA governments, and cites this ideational shift as key to the formulation of successful action plans. Public participation has also been a key factor in CEC programs; most notably, other than the JPAC, has been the North American Fund for Environmental Cooperation (NAFEC), which has awarded grants to community-based projects. She then highlights the CEC’s framework for data gathering, which is itself a key means of developing a regional/trilateral shared sense of the environment. Data is gathered not simply to get a snapshot at any given moment, but to test hypotheses regarding the “race to the bottom” and the impact of trade liberalization and foreign direct investment promotion on environmental conditions, comparing pre- and post-NAFTA findings.

The main lessons from North America on free trade and the environment she draws from the work of the CEC thus far are:

• The public needs to be engaged early and often
• Good policy makes all the difference
• Liberalized trade rules do not by themselves lead to environmentally preferable outcomes without additional political activism by governments.

The main limitations of the CEC’s work, as cited by the CEC’s critics, have centered on:

• Institutional weaknesses of the CEC (lack of communication and cooperation with the Free Trade Commission, or FTC)
• Lack of trust between environmentalists and government trade officials in the aftermath of the NAFTA debate
• Leftover feelings of coercion on the part of Canadian and Mexican trade officials, who see the side agreements as the price they had to pay to get the agreement passed
• Avoidance of “hot topics” such as softwood lumber, mad cow disease, cross-border water management
• Enforcement mechanism lacks “teeth”

Carpentier concludes that the experience of the CEC over the past nine years shows both that trade and the environment go together only when there is concerted policy attention paid to devising creative strategies to capture their synergies for greater social benefit, and that institutions matter in getting governments to cooperate towards finding those creative strategies.