Watchdogs to Keep NAFTA Green

PUSHED along by environmentalists and politicians on both sides of the Rio Grande, momentum is building to create a new tri-national environmental watchdog agency.

The catalyst is the North American Free Trade Agreement (NAFTA). The pact will come up for ratification in the legislatures of Mexico, Canada, and the United States in coming months. But President Clinton says he will not back NAFTA's approval until Congress passes parallel legislation to prevent industries - and jobs - from going to Mexico or Canada to escape environmental regulations in the US.

"We must have some assurance on this," Clinton said in an Oct. 4 NAFTA speech, calling for an "environmental protection commission with substantial powers and resources."

Opponents say that for a trade agreement, NAFTA already has an unprecedented green hue, pledging "to promote sustainable development." To head off the environmental lobby, Mexico, the US, and Canada officially announced in September the formation of the North American Commission on Environmental Cooperation.

But so far it's not much more than a name. What this commission will do, how much power it will have, who will be on it, and how it will be funded are wide open questions. High profile watchdog

What Clinton and the environmentalists want is a high profile commission to monitor enforcement of existing environmental and health regulations in all three countries.

The Group of 100, a leading Mexican environmental group, and the Washington-based Natural Resources Defense Council are among those pushing for a commission that includes environmental activists and academics, as well as government officials from the three countries. They want the commission to sponsor investigations, public hearings, and annual reports on compliance with environmental laws - including those governing toxic waste disposal, wildlife protection, and water and air pollution control.

The concept is likely to be fleshed out further in Washington on Feb. 19, when Sen. Dennis DeConcini (D) of Arizona hosts a meeting on the issue, sponsored by Mexican and US environmental groups.

Critics wonder why another environmental oversight body is needed if each of the three countries already has one.

"Because enforcement of environmental laws isn't happening now - and we're not just talking about Mexico," says Lynn Fischer of the Natural Resources Defense Council.

Also, this environmental body will focus on trade. "The commission will point out `environmental subsidies' and problems which could distort trade and become trade disputes," Ms. Fischer says.

For example, the overcutting of a forest in the Mexican Sierra Madre mountains could become a trade dispute if it affects the habitat of an animal that migrates between Mexico, the US, and Canada. "If Mexico doesn't enforce its protection laws, Weyerhauser or some other US or Canadian lumber firm could claim that Mexican loggers have an unfair trade advantage," notes Pete Emerson, senior economist at the Environmental Defense Fund in Austin, Texas.

The solution, Mr. Emerson suggests, is not for Canada or the US to ride in and enforce Mexican laws. "The three might work together however, with the Canadian or US Forest Service providing some technical assistance to Mexico."

But some Mexican businessmen are concerned that the commission will foist higher foreign standards upon them or hit their exports with a "green" tax. In rejecting environmental add-ons to NAFTA, Carlos Sandoval, president of the National Council of Industrial Ecologists, says, "They are thinking of applying protectionist measures for their products, and in reality they haven't the least interest in protecting the Mexican environment."

Mexican officials take a more conciliatory line. NAFTA is a cornerstone of President Carlos Salinas de Gortari's economic plan, and he doesn't want to see it derailed now after so much effort. "We are willing to work together on anything that makes economic sense. But we won't accept outside enforcement or supervision which impinges on our sovereignty," a presidential spokesman says. Cooperative commission

Mexico's attorney general for the environment, Santiago Onate Laborde, welcomes a trilateral monitoring commission. "If properly designed - cooperative but not too bureaucratic - it could be very helpful. The participation of non-governmental organizations, scientists, and academics would be an asset," Mr. Onate says.

But Onate wonders whether the commission will have enough power and money to be effective.

Congress is already having trouble coming up with its share of money to pay for the Mexico-US border clean-up announced last year. "Many in Congress question the value of NAFTA now. To fund this from general revenue will be very difficult," says an aide to a Democratic senator.

Rep. Richard Gephardt (D) of Missouri, a longtime opponent of NAFTA, and Rep. Kika de la Garza (D) of Texas are proposing a customs fee or trade tax on all goods crossing the border. The money would be used to finance infrastructure maintenance and environmental programs.

There is also talk among US Democrats of passing legislation that would financially penalize companies or industries that violate environmental standards. Opponents of these ideas, including Mexican officials, say this defeats the purpose of a free trade agreement. "You're creating new barriers to trade," Onate says.

Meanwhile, the Mexican government is studying several of its own "polluter pays" revenue raising schemes. It is considering setting up a toxic-waste guarantee fund, for example. Industries deposit money into the fund, the interest earned finances enforcement, and the capital is used in case of a spill.