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Environmental Issues in the FTAA: Trashing the Continent

The proposed FTAA could harm the environment in many ways. Tariff reductions on raw materials (such as wood) would trigger higher levels of trade and consumption of these items, accelerating already rapid rates of deforestation in the Amazon and in old growth forests across the continent. The Americas are rich in natural resources, which the handful of global timber, oil and gas, mining, and fishing mega corporations are eager to control and exploit without the interference of local communities or environmental safeguards.

The proposed investor protections enshrined in the draft FTAA text would grant new rights for foreign businesses to move into currently protected or unexploited areas with governments required to allow them to mine, log or fish. This process already has begun in Chile’s temperate rain forests in the wake of the recently concluded U.S.-Chile Free Trade Agreement (FTA). Over-fishing of coastal waters and extensive industrial fishing is also an enormous environmental problem in Chile which local activists were fighting to remedy before the FTA dramatically shifted more power to industries. When local communities are powerless to control extraction industries, terrible environmental crimes are committed, as the world is now learning thanks to the rare insistence of one indigenous Ecuadorian community that is suing Chevron-Texaco to clean up an oil drilling site.

Under the proposed FTAA, many more countries would be vulnerable to these damaging “rip and ship” natural resource extraction operations including strip mining, oil and gas exploration in environmentally sensitive locales, large-scale logging operations and unsustainable fishing practices that poison communities, deplete valuable resources and destroy the habitats of countless animal and plant species.

Proposed FTAA rules also would provide tools for polluters to attack vital environmental and health regulations that we all rely on to keep our families safe. In the draft FTAA text, any domestic policy that affects trade, including toxic bans to endangered species rules, clean air rules, invasive species policies, and more, could be considered a “non-tariff trade barrier” and therefore subject to challenge in closed door FTAA tribunals. Governments’ ability to regulate activities that have substantial environmental impacts could be severely undermined by these proposed FTAA rules.

In addition, the draft FTAA text includes provisions empowering corporations to sue governments directly in closed tribunals for violations of their new FTAA “investor rights”-- when they believe that public interest regulations, such as environmental laws, infringe upon their future profits! This outrageous system, also enshrined in NAFTA’s “Chapter 11” investor protections, has generated NAFTA suits by corporations over government regulations or actions aimed at protecting natural resources, banning toxics, zoning land use or even returning contested lands to indigenous community control. These cases are heard by a secret trade tribunal with no direct public representation or input — not a domestic court. If the tribunal rules for the corporation, the government must compensate for the lost “right” to make a profit by paying the corporation millions of taxpayer dollars. Under NAFTA, corporations are using these challenges to pressure governments to eliminate environmental standards. If passed, the FTAA would extend these outrageous corporate privileges throughout the hemisphere.

Finally, the rules governing the service sector in the proposed FTAA would make it difficult for governments to regulate and/or limit activities such as oil exploration and drilling, mining, logging, water extraction and even transport and tourism-related activities. These activities, which are causes of severe environmental damage worldwide, are all services that proposed FTAA rules could cover. These rules would prohibit governments from setting limits on the size or quantity of foreign-owned service operations. This means, for example, that while the U.S. could keep domestic companies out of ecologically sensitive areas, it would be required to allow foreign energy companies to build an unlimited number of rigs or extract an unlimited amount of oil. To add insult to injury, foreign service sector corporations also could challenge domestic environmental regulations by claiming that the cost of compliance would undermine their FTAA investor rights to expected profits.

These well-established environmental costs of corporate-driven globalization are always disproportionately borne by communities of color in both developed and developing countries. The 2000-mile U.S.-Mexico border is one example of the environmental racism that has occurred under unfettered “free” trade. More than 3000 maquiladoras have left the predominantly Latino population on both sides of the border with a toxic legacy of polluted air, contaminated land and poisoned water that has yet to be addressed.

The environmental problems that would occur under the proposed FTAA — the clearing out of old growth forests, increased strip mining and oil drilling--would be concentrated in indigenous and poor communities throughout the Americas and the Caribbean. While the specific impacts in countries like Brazil, Honduras, Guyana or Dominica would differ from those seen on the border, the underlying pattern of injustice would be spread by FTAA.

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