Environmental Effects of NAFTA
The North American Free Trade Agreement (NAFTA) was a monumental trade agreement between the United States of America, Canada, and Mexico. This trade agreement reduced or eliminated many tariffs between the three countries. It also has opened doors to foreign direct investments between the three countries, allowing for foreign businesses to expand. The United States has been the biggest beneficiary of this trade deal by maintaining its power as an agricultural giant, allowing for cheaper imports and reduced prices for consumer goods. Despite all the economic success that the United States has enjoyed after the signing of NAFTA, there have been many unintended consequences of the trade deal. In this blog, I will discuss the various environmental effects that have resulted from NAFTA policies.
According to Stephen P. Mumme of the Institute for Policy Studies (1999), concerns of the environment “were afterthoughts to NAFTA” and were only set in place due to the efforts of environmental groups. These efforts pushed the three governments to make commitments to strengthening sanitary and plant health and maintaining the environmental health of the region. Because of these efforts, NAFTA was the first multilateral trade agreement that linked sustainable development with trade. These groundbreaking environmental commitments included in the trade agreement paved the way for environmental provisions in future trade agreements. Because NAFTA is one of the first trade agreements to include environmental commitments, there was a lot of room for errors and unintended environmental consequences since its implementation.
First and foremost, it is important to note that a trade deal is supposed to focus mainly on commerce and investments instead of the environmental conditions of the region. Despite the collective efforts of the three governments to create various environmental institutions to oversee the environmental issues, there were many ways in which these regulations were not enforced because trade was prioritized. There is also a provision within the NAFTA agreement called the “Chapter 11” provision wherein foreign companies can sue a host country for implementing environmental regulations that can harm potential profits (Snape NPR, 2013). Although there are relatively few cases in which host countries would lose in lawsuits against foreign companies, the few cases in which they did lose were monumental. For example, when Canada banned the imports of a gasoline additive (MMT), the Ethyl Corporation of the United States sued the Canadian government under the Chapter 11 provision of NAFTA. The Canadian government had to apologize to the Ethyl Corporation, pay them $13 million dollars, and remove the ban of MMT (Shogren NPR, 2013). This provision allowed companies and investors of foreign companies to have some influence on the government of the host country. This provision is of particular concern in Canada and Mexico as US companies can pour a lot of money in legal battles and win lawsuits. Canada has been sued 41 times under this provision, which is more than the USA or Mexico. Canada has also spent $95 million in court expenses and has also paid more than $219 million in settlements and other damages to foreign companies (Canadian Centre for Policy Alternatives, 2018).
NAFTA has allowed for the increased presence of US companies exploiting the fossil fuel reserves of Canada. Direct foreign investment in these lands has encouraged the increased use of (and dependence on) fossil fuels, particularly tar sands. This fossil fuel is not clean in the slightest and is also responsible for much deforestation in Canada. Between 2000 and 2012, 5.5 percent of Canada’s total land area had undergone deforestation due mainly to the extraction of tar sands and other industrial activities (World Resources Institute). The tar sands that would be transported from Canada throughout the US travel through massive pipelines, including the infamous Keystone Pipeline. This pipeline was the topic of much debate, as it would transport some of the dirtiest fuel and travel through indigenous homelands. For many years, the Mexican government had controlled all of its domestic oil resources, but in 2013 a new privatized energy market had come about. This allowed foreign companies to invest in Mexico’s fossil fuel reserves and newer Mexican energy companies. NAFTA also eliminated all tariffs on natural gas and oil products. As the existential climate crisis continues to unfold, investments in the fossil fuel industry should be deprioritized. NAFTA’s enabling of companies to influence foreign countries in granting easier access to operate their business is not conducive to the fight against climate change.
The increased presence of maquiladoras and manufacturing jobs in Mexico has consequently increased air pollution in Mexico’s urban areas, particularly in the northern and central regions of the country. I have been able to notice the increase in smog in the cities of Guadalajara and Leon from 2006 to now. Despite the fact that the USA and Canada have seen decreases in NOx pollution, the increased presence of manufacturing jobs in Mexico has made it the only country in the NAFTA agreement that has seen an increase in NOx pollution. There has been an increased risk of respiratory illness in school children in the state of Guanajuato, which has seen a growing presence of manufacturing jobs (Linares et al, 2010).
The USA’s position as an agricultural giant has brought about negative environmental consequences as well. The US agricultural sector is heavily subsidized and outcompetes Mexico’s agricultural sector. Unfortunately, this leads to an increase in monocultures in the United States and the disappearance of smaller farms in Mexico. A monoculture is defined as the cultivation of a single crop in a specific area. Monocultures are not a very healthy or environmentally friendly method of agriculture. Rather, it is mainly a product of industrialized agriculture that is energy-intensive and requires the use of various pesticides and fertilizers. Additionally, monocultures tend to strip the soil of nutrients and biodiversity. The increased use of heavy machinery on monoculture plots is responsible for soil compaction and the killing of essential soil dwellers. Damages to the biodiversity in soil ecosystems harm soil health and make it harder for crops to grow and give a bountiful yield. The reduction of biodiversity anywhere hastens the current mass extinction event that the world is going through (The Guardian). Monocultures also require water-intensive practices. Soil compaction caused by heavy machinery limits the porosity of the soil and does not allow for water to properly make its way through the dirt. Monocultures of the US Midwest have also been responsible for water pollution along the Mississippi River. The runoff from agricultural fields carries pesticides and fertilizers into the water streams. A result of this is the creation of dead zones wherein fertilizer nutrients cause the water to undergo eutrophication, whereby an increase of algal blooms depletes oxygen from the water, killing off other animal life.
The loss of smaller farms has led to the deforestation of those areas or the opening of mining operations. As mentioned in my previous blog, NAFTA has unintentionally allowed for the trafficking of drugs and the presence of organized crime to flourish in Mexico. Many organized crime factions are responsible for illegal logging, in particular within the state of Michoacán. Organized crime would be responsible for illegal logging in the town of Cherán, threatening the traditional homelands of the indigenous community there. The increased presence of mining operations has also affected local communities, as mining is an environmentally damaging process that harms local biodiversity within the soil, flora, and fauna. Mining causes a lot of dust to be picked up as well, affecting air quality, and a lot of mining waste reaches water streams.
Greenhouse gas (GHG) emissions have increased since the signing of NAFTA. Although NAFTA alone is not responsible for the increase of GHG emissions, the opening of borders and trade has made it easier for the transportation of goods via trucks. The increased presence of trucks along the US-Mexico border has been responsible for spikes in respiratory diseases in border communities. This is partly due to the fact that a quarter of Mexico’s fleet of trucks was composed of pre-1980 models that are particularly notorious for emitting alarming levels of nitrogen oxides (Sierra Club Report, 2014).
Despite the fact that NAFTA is one of the pioneering trade deals to first include environmental provisions along with a focus on sustainable development, various unintended consequences have resulted since its implementation. Some of these issues are addressed in the US-Mexico-Canada Agreement (USMCA). The USMCA is doing away with the Chapter 11 provision of NAFTA, which no longer allows companies to sue foreign governments for affecting any potential profits (Vomiero, 2018). This might help the Canadian government to maintain its power in keeping environmental laws and not get sued by American companies. Unfortunately, the USMCA does not mention the words “climate change” in its environmental section, despite all the expanded environmental protections.
References:
Linares, B., Guizar, J. M., Amador, N., Garcia, A., Miranda, V., Perez, J. R., & Chapela, R. (2010). Impact of air pollution on pulmonary function and respiratory symptoms in children. Longitudinal repeated-measures study. BMC Pulmonary Medicine, 10(1). doi:
10.1186/1471-2466-10-62
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Shogren, E. (2013, December 8). Unrealized, Unforeseen Environmental Results Of NAFTA. Retrieved from
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Vomiero, J. (2018, October 5). Why some experts say scrapping part of NAFTA’s Ch. 11 is Canada’s biggest win with USMCA. Retrieved from
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