From email@example.com Mon Oct 18 09:18:05 1993 Date: Sat, 16 Oct 1993 00:22:40 -0400 From: Harel Barzilai
To: firstname.lastname@example.org Subject: NAFA submission: Public Citizen's Analysis ################################################################## Topic 69 Public Citizen's NAFTA anal pcctw Library of trade-related documents. 10:57 am Oct 26, 1992 ################################################################## THE NAFTA DOES NOT MEASURE UP ON THE ENVIRONMENT AND CONSUMER HEALTH AND SAFETY WHY PUBLIC CITIZEN CANNOT SUPPORT THIS NAFTA TEXT TABLE OF CONTENTS: INTRODUCTION 1 I.NAFTA EXPOSES U.S. FEDERAL AND STATE CONSUMER AND ENVIRONMENTAL STANDARDS TO CHALLENGE AS TRADE BARRIERS 2 SANITARY AND PHYTOSANITARY STANDARDS 2 TECHNICAL STANDARDS 5 NON-VIOLATION IMPAIRMENTS 8 II.NAFTA PROMOTES ENVIRONMENTALLY DETRIMENTAL INVESTMENT 9 III.THE LONG LIST OF WHAT IS MISSING IN THE NAFTA ON THE ENVIRONMENT 9 IV.DISPUTE RESOLUTION: TIGHT SECRECY MAINTAINED, NON-VIOLATION IMPAIRMENT CASES ALLOWED 11 CONCLUSION 13 INTRODUCTION Unfortunately, both in what it contains and what it omits, the September 6, 1992 text of the North American Free Trade Agreement is not good news for environmental or consumer health and safety protection. While Public Citizen has worked with Bush Administration officials for over a year to ensure that to ensure that NAFTA contains certain environmental and consumer safeguards, this text does not measure up. Further, the September 6 text does not measure up to the consensus position on minimal environmental safeguards signed by 40 U.S., Mexican and Canadian environmental and consumer groups presented to the Administration in May 1992, nor to consensus documents, presented throughout the negotiation process, signed by American groups. The terms of the NAFTA text expose numerous existing U.S. federal, state and local environmental and consumer laws to challenge as nontariff trade barriers under chapters on Sanitary and Phytosanitary Standards and Technical Standards. The standards provisions also create downward pressure on industrial and agricultural worker safety standards in the United States. Further, NAFTA would promote environmentally unsound commercial activity in the areas of agriculture, energy and in the incentives it creates for manufacturers to relocate to Mexico to avoid strict enforcement of environmental regulations. All of these problems are intensified by the absence in the NAFTA of enforcement or funding provisions for environmental protection. Moreover, the NAFTA text establishes highly secretive negotiation and dispute resolution processes that deny citizen oversight of NAFTA on vital citizen concerns such as food safety, consumer product standards and environmental regulations on hazardous substances. The Bush Administration did take limited steps in the NAFTA to address environmental and consumer health and safety criticisms made about the final text of the Uruguay Round of GATT. The existence of any progress on environmental and consumer issues in the NAFTA has led at least one environmental group to support the NAFTA as a good first step. However, for many of the groups most involved in the NAFTA debate, the net negative effect of the September 6 NAFTA text on the environment makes the text unsupportable. Several baby steps forward cannot overcome the sprint backwards in environmental and consumer protection the text as a whole could cause. As the following analysis of several of the key environmental and consumer issues demonstrates, much of the Administration's attention in the NAFTA to environmental issues is merely cosmetic. The provisions that are substantive, though relevant, are not nearly sufficient to outweigh the many undermining provisions of the text. The extent and nature of the deficiencies will require that sections of the NAFTA are renegotiated. These core problems cannot be addressed in enabling legislation alone. The concepts underlying the economic integration of the United States, Canada and Mexico must be considered before any renegotiation of an agreement is even undertaken. I.NAFTA EXPOSES U.S. FEDERAL AND STATE CONSUMER AND ENVIRONMENTAL STANDARDS TO CHALLENGE AS TRADE BARRIERS The NAFTA contains two section on standards. Sanitary and Phytosanitary (SPS) rules pertain to food and foodstuffs. Technical Standards (TBT) cover all remaining manufacturing and agricultural standards. The Sanitary and Phytosanitary Standards text and the Technical Standards section can be thought of as rules for taking exceptions to the NAFTA's primary goal of removing obstacles to trade. In these two sections, the NAFTA lays out requirements that restrict measures taken by NAFTA countries which might have the effect of limiting trade. These measures must meet this restriction or be considered illegal trade barriers. The standards provisions of the NAFTA are slightly improved over those rejected in the GATT Uruguay Round text by nearly every U.S. environmental and consumer group. However, the SPS text in particular exposes numerous U.S. national and state laws to challenge. It could stop progress in environmental protection in the area of pesticides and consumer health and safety in food labelling, inspection and other contaminant standards such as additives and preservatives. The TBT text's detrimental impact is on the process by which U.S. standards are now set. For instance, by requiring NAFTA countries to accept the conformity assessment procedures and bodies of other countries, the TBT text would undermine the role citizens and consumer and environmental advocates now have on standard-setting. As written, neither the SPS nor TBT text are acceptable from a consumer or environmental protection viewpoint. SANITARY AND PHYTOSANITARY STANDARDS A goal of the NAFTA SPS text is "harmonization of standards." Under the NAFTA SPS text, federal, state and local standards that are more protective than named international standards must meet a series of requirements, or they can be declared illegal barriers to trade if challenged by another NAFTA country. Thus, although the Bush Administration has stated that the U.S. maintains the right to exclude products that do not meet our current standards, the U.S. could face a trade challenge for doing so. If the U.S. law was ruled not to comply with the terms of NAFTA, the United States would be required to eliminate the law, stop enforcing it against imports or pay "damages" to a successful challenger. The pressure to lower standards would be great under this paradigm. Unfortunately, the named international standards for food in NAFTA are those of the Codex Alimentarius, a Rome-based UN subgroup whose standard-setting process has involved numerous food, chemical and agribusiness companies, but until recently no representatives of consumer or health interests. Not surprisingly, many Codex standards are lower than current U.S. law. For instance, Codex allows chemicals long-banned in the U.S. such as DDT on grains, meat and dairy products. Fruits and vegetables are allowed to contain residues of many banned or severely restricted pesticides such as heptachlor. Only domestic standards that are the same as Codex are presumed to comply with the NAFTA. If a U.S. food safety standard is higher than Codex, it would only survive challenge if: (*)The chosen level of protection it is meant to achieve is based on risk assessment and science. Some of the strongest U.S. food safety laws, such as the Delaney Clause which prohibits carcinogenic additives in food and carcinogenic pesticide residues on processed foods, are not based on risk assessment. Rather, the Delaney Clause is based on a Congressional decision not to expose Americans to carcinogens in the food supply. It is a health only, zero risk standard. (*)It is judged by a NAFTA dispute resolution panel to be "necessary" to achieving a NAFTA-allowed goal, which does not include environmental protection in pesticide standard-setting. The term is otherwise undefined in the SPS text. It is understood in GATT jurisprudence to have a limiting effect. This requirement raises the question of why a NAFTA panel of trade officials should second-judge a democratic decision on what is necessary in consumer or environmental protection. (*)It is not "arbitrary and unjustifiable" which is understood to mean that it must be the least trade-restrictive measure possible to achieve a level of protection regardless of political or other considerations that might call for another measure. (*)It is not inconsistent with the level of risk allowed in different regulatory circumstances. NAFTA as written would require a country to choose one acceptable level of risk. Thus, not only could the differentiation between pesticide standards for raw and processed foods under the Delaney Clause be exposed to attack, but different levels of risk allowed for entirely unrelated areas of regulation -- salmonella in chicken versus carcinogenic food additives --could be the basis for a challenge. Further, the NAFTA only allows counties to set standards that could have the effect of limiting trade if such laws do not extend beyond their geographic borders. This is a very important point because many existing environmental laws particularly are aimed at protecting the environment beyond U.S. borders. For instance, the Endangered Species Act, laws banning whale and ivory products and the provisions of the Clean Air Act prohibiting import of products manufactured with ozone- depleting substances aim at protecting the environment or species in the global commons or in another country. One of the bases for a 1991 GATT ruling that declared the Marine Mammal Protection Act of 1972, which prohibits import of tuna caught killing large numbers of dolphins, to be an illegal trade barrier was that the law was "extra-territorial," i.e. it aimed to protect dolphins that were outside of U.S. territory. Also, under the NAFTA SPS text, the U.S. cannot limit imports of a product based on its production method. Thus, product prohibitions based on child or other labor practices or certain environmentally-damaging production methods such as drift netting could be labelled trade barriers. Once so labelled, such measures would have to be eliminated, or the U.S. would have to pay the country which had made the successful challenge to maintain them. The NAFTA text has more detrimental impact than the Uruguay Round text on U.S. standard-setting procedures. For instance, the rules for determination of equivalence of standards between countries requires countries to accept other countries scientific data as a basis for judging equivalence. Further, the NAFTA weakens the U.S. requirement for safety pre-approval of additives and other substances, by requiring consideration of using international standards as interim measures. In another section on notification and standards-setting, the NAFTA creates a right for consideration of comments by the Mexican and Canadian governments as to their interest in the setting of U.S., federal and state food and agricultural standards. The NAFTA SPS text applies to state and local governments, and requires the federal government to take all necessary steps to ensure state and local compliance. In a February 1992 GATT panel ruling on U.S. state alcohol regulations and taxes, the Bush Administration admitted in a panel submission that as a matter of international law, terms of executive agreements such as GATT (and NAFTA) trump state and local law. The GATT panel ruled that the U.S. had failed to meet its obligation to take all "reasonable steps" to ensure compliance of its subnational entities because it had not taken all steps available within its constitutionally-granted powers. Thus, under GATT the federal government would be required to take preemptive legislative action, sue a state for compliance or cut off any support of non-complaint activities. The NAFTA text on state compliance is even less forgiving than the GATT text that generated that strong ruling. In NAFTA there is no limitation that the country take only "reasonable" measures. This provision is very worrisome. It could put the federal government into the position of preempting a state law because of NAFTA requirements that it would have no grounds to preempt under existing federal law. The impact of this provision could be especially detrimental to the overall strength and progress of environmental and consumer protection, because states have traditionally played a role as an engine to pull forward federal standards. TECHNICAL STANDARDS The coverage of the Technical Standards rules is quite broad, applying to any standards-related measures of a Party not covered in the SPS text that directly or indirectly affect trade in goods or services. Unfortunately, the NAFTA TBT text does not provide any exception for standards based on production or process methods that limit trade, except those directly related to a product's physical characteristics. Thus, except for specific exceptions for labelling and packaging standards, under NAFTA rules countries cannot regulate based solely on the process of production or harvesting of a product, which as described in the SPS section is a serious problem. The NAFTA TBT text contains both some improvements on the existing GATT and proposed Uruguay Round TBT texts, and also in the area of standard-setting procedures, some additional problems. However, Article 903 of the TBT text gives the existing GATT TBT text precedent over the NAFTA TBT text in the case of conflict. Thus, areas of greater trade liberalization, such as the NAFTA standard-setting procedures, could be permissible. Areas of greater restriction, such as the NAFTA recognition of environment or consumer safety as a basis for a technical regulation, could be in conflict with the GATT TBT text. This clause largely undermines the real progress made in other sections of this text, as it provides for the worst of both worlds. The NAFTA TBT text would allow maintenance of a wider range of standards related measures than the NAFTA SPS text. TBT does not require science or risk assessment in the setting of levels of protection. TBT considers a wider range of objectives for regulation to be legitimate (including consumer issues relating to quality and sustainable development.) TBT also allows for different levels of protection across different regulatory circumstances. Further, unlike the SPS text, the TBT text defines what is an unnecessary obstacle to trade, and does so in a fashion that would be less likely to ensnare legitimate regulatory measures. Like the SPS text, the TBT text confirms that in the case of a dispute resolution challenge under this text, the burden to show a violation of the NAFTA would fall on the challenging Party. Finally, the TBT text generally places slightly less responsibility on the federal government than the rest of the NAFTA to see that state and local governments comply. Despite TBT's many superiorities to the NAFTA SPS text, the TBT text still requires that countries use international standards or international standards whose completion is imminent except where such standards would be ineffective or inappropriate. The TBT text presumes only such standards not to be inconsistent with the TBT text. However, it limits this requirement by allowing an international standard's failure to meet a country's chosen level of protection to be a legitimate excuse, which the GATT does not. For international standards, the TBT text lists Codex, as well as several standard-setting bodies not listed in the SPS text such as the World Health Organization and the Food and Agriculture Administration of the United Nations. The clauses on the use of international standards highlight the main goal of the TBT text, which is harmonization of standards. As compared to the harmonization clauses of the NAFTA SPS text and both the SPS and the TBT texts of the GATT, the NAFTA TBT text seems least likely to promote downward harmonization of actual standards. Rather, the harmonization clauses of the TBT text focus strongly on processes to facilitate harmonization. Thus, Parties are required: (*)"to the greatest extent practicable, [to] make compatible their respective standards-related measures so as to facilitate trade in a good or service..." (*)to "accredit, approve, license and otherwise recognize conformity of assessment bodies in the territory of another Party on terms no less favorable than those accorded to such bodies in its territories" with a four year phase-in period before this clause pertains to Mexico; (*)"recognizing the existence of substantial differences in the structure, organization and operation of conformity assessment procedures in their respective territories, make compatible to the greatest extent practicable such procedures." (*)"upon the request of another Party, to promote compatibility of a specific standard or conformity assessment procedure..." (*)to "accept the results of a conformity assessment procedure conducted in the territory of another Party, provided that it is satisfied that such procedure offers an assurance..." and (*)to treat the standard of another country as equivalent to domestic standards if the exporting Party can show its technical regulation adequately fulfills the importing Party's NAFTA-legitimate objectives. The impact of these procedural harmonization clauses of the NAFTA TBT text on current U.S. standards-setting procedures is very worrisome. For instance, the notion of accepting another country's conformity assessment that a U.S. standard and that of another NAFTA country are equivalent, rather than following some publicly- accessible U.S. notice and comment procedure under the Administrative Procedure Act, means consumer and environmental advocates are cut out of the standard- setting process. Similarly, accrediting the assessment bodies of other countries as equivalent to parallel domestic agencies eliminates the role of citizen and Congressional oversight of the functioning of such bodies. Throughout the TBT text, disturbing procedural issues are raised. For instance, the TBT text establishes the same rights of notice and comment for other NAFTA Parties as the SPS text. Thus, the issue of the appropriateness of requiring special consideration of Mexican and Canadian government comments on U.S. rule-making is raised here as well. Further, the text establishes another new organization, the Committee on Standards-Related Measures, comprised of representatives from each government. The Committee's main duty is to facilitate harmonization. To accomplish harmonization goals, the Committee is required to set up four subcommittees. The timelines and mandates of two of those groups undermine environmental and consumer protection. The Subcommittee on Land Transportation Standards is mandated to implement the following work plan for making standards compatible for motor carriers, although Mexican trucks have been granted immediately effective additional rights for access to the U.S. in anticipation of the NAFTA: (*)one and one half years for non-medical driver standards such as language use and age; (*)two and one half years for medical-related standards for drivers; (*)three years for standards on emissions and environmental pollution, inspection, maintenance and repair, brakes, securement of cargo, weights and dimensions; and (*)three years for standards on motor carriers' safety compliance. Thus, despite immediate access for Mexican trucks to U.S. roads, consistent environmental and safety rules will only apply after years. For railroads, there is six year phase-in for compatibility of rules on transportation of dangerous goods. Another subcommittee on Automotive Standards is mandated to make compatible standards concerning automotive goods based on impact on industry integration, extent of barrier to trade, level of trade affected and the extent of such disparity. The subcommittee is allowed, but not required, to consider other closely related measures such as emissions. Auto safety is not included. Finally, for Automotive standards, a special stronger rule for state compliance is established. The special rule replicates the GATT language interpreted in the alcoholic beverages case described above in which the federal government was required to take all measures within its constitutional powers to force state compliance. This clause seems aimed at states such as California, which have led the country in auto standards. Because California is such a large car market and production must be geared to meet California's requirements, California's requirements have had the effect of raising the standards of cars sold in other states. Additionally, the text suggests the Committee set up working groups on a variety of issues important to consumer and environmental protection. Again, this section raises worrisome procedural issues. While the TBT text allows that such working groups should attempt to include state level representatives, it does not provide a role for consumer or environmental advocates. Thus, decision-making on issues currently accessible to citizens and their representatives through the Administrative Procedure Act and the legislative process would be moved to working groups of government officials whose primary mandate is harmonization for trade expansion. NON-VIOLATION IMPAIRMENTS While the specific rules of the NAFTA SPS and TBT text expose legitimate U.S. consumer and environmental laws to being ruled trade barriers, the U.S. could be forced to pay "damages" even if a U.S. standard meets the NAFTA tests. In a section called "Nullification and Impairments", the NAFTA allows countries to bring cases in both the SPS and TBT areas for national measures that do not violate the NAFTA rules, but that cause another NAFTA country to miss an economic opportunity it could "reasonably" have expected to accrue to it. This provision for "non-violation impairments" is extremely troublesome, as it would put into place the same pressures to lower and cap standards even for standards that pass the NAFTA tests. II. NAFTA PROMOTES ENVIRONMENTALLY DETRIMENTAL INVESTMENT The Bush Administration initially argued that the NAFTA contained provisions that would limit the lowering of environmental standards to attract investments. However, during intense questioning in a Ways and Means hearing, EPA Commissioner Reilly admitted that in fact, the only investment clause pertaining to the environment was not enforceable. That provision states that countries "should not" lower their standards to attract investment. Unlike the other mandatory provisions of the investment text, failure to follow the so-called "green" provision of the investment rules can not trigger action through the NAFTA dispute resolution mechanism. In effect, this provision meekly encourages countries not to lower their standards in order to attract investment. Where standards seem to be lowered to attract investment, the agreement calls for consultations. This provision fails on two major counts: (*)It misses the main current problem which is lax enforcement of existing laws, rather than the lowering of standards to attract investment. (*)It does not address the problem that regulatory disparities may widen if one country tightens its regulations, while the other partner countries leave their standards at current levels. Meanwhile, large portions of several U.S. industries with high environmental costs such as furniture manufacturing and smelting have moved to Mexico where enforcement of environmental standards is minimal. An August 1992 GAO Report studying a random sample of twelve U.S. companies operating plants in Mexico found that not a single plant was following Mexican environmental rules. Under NAFTA, the products of such American companies, as well as those of Mexican and Canadian companies, would have equal access to the U.S. market. This would put U.S. companies who are following environmental rules at a competitive disadvantage to those who have relocated to Mexico to avoid environmental compliance. This perverse incentive will both push downwards U.S. standards and promote relocation of industry to the location of least environmental protection. III. THE LONG LIST OF WHAT IS MISSING IN THE NAFTA ON THE ENVIRONMENT Noticeably missing from the NAFTA are any mechanisms for strong, enforceable, funded environmental provisions to shape the nature of trade and investment under the NAFTA. For instance, environmentalists have advocated for a "polluter pays" provision to generate a steady source of income for the environmental programs that will be needed to counter increased industrialization from the NAFTA, and also to create a set of incentives for environmentally-sound business practices. Supporters of the NAFTA estimate that merely cleaning up the environmental devastation along the U.S.-Mexico border caused by unregulated trade in the Maquiladora zone will cost minimally $5 billion. Instead of providing for a "polluter pays" funding provision, the Administration's funding focus has been to bash Congress for cutting a $200 million request for water treatment plants along the border. Although the Administration has touted the construction of the much-needed plants as the programmatic aspect of their border clean up, the plants were needed and planned separately from the NAFTA. There is no program or funding for clean up of the toxics contaminating the ground and air in the border zone where the rate of toxics-related birth defects and illness on both sides of the border has soared to many times the national averages for such problems. There is no plan for preventing further environmental damage from the increased industrial activity that the NAFTA would promote. Such clean up, and funding for environmentally sound practices in the future, must come from the businesses who will benefit from the NAFTA trade rules. It is unconscionable that the taxpayers of the NAFTA countries should subsidize such business activity by paying for corporate environmental expenses. Even the four environmental promises, seen by many environmentalists to be woefully inadequate, made by President Bush to gain extension of the fast track procedure for Congressional consideration of trade agreements have not been meaningfully met: (*) Comprehensive Border Environment Plan: The Bush Administration released a plan which suggested no mechanism for enforcement or funding for border cleanup or environmental protection in the future. The plan has been harshly criticized as insufficient in scope and enforcement by national environmental groups, who call it the "Where's the bun and where's the beef plan. No real program and no funding." The only actions under the plan are for several much needed water treatment plants along the border. Other provisions merely call for more study and better cooperation. What is needed is a well- funded plan for real action. (*) Adequate Environmental Impact Assessment: The Administration prepared a very limited environmental analysis of NAFTA premised on a presumption that U.S. companies would not relocate to Mexico to avoid environmental regulation. The study thus concluded that the environmental impacts of the NAFTA would be negligible. The Administration has refused to undertake comprehensive environmental impact statements as required by the National Environmental Policy Act (NEPA). Under the Act, Environmental Impact Statements are required for all major federal actions, including international agreements. For instance, the Panama Canal treaty was scrutinized specifically in an Environmental Impact Statement. Public Citizen on behalf of itself, the Sierra Club and Friends of the Earth are currently suing for enforcement of NEPA in the U.S. District Court, District of DC. (*)Safeguard U.S. Environmental and Consumer Laws: As this memo points out, numerous U.S. environmental and consumer laws are exposed to challenge by the NAFTA text announced September 6. (*)Parallel Negotiations on the Environment: To date, the Administration has claimed no accomplishments in rule-making, enforcement or funding except talk of cooperation between the U.S, Mexico and Canada through a North American Environmental Commission. What this Commission's jurisdiction, enforcement powers and scope will be is unclear. Even if the Administration had negotiated comprehensive parallel measures, history has shown that such agreements are meaningless unless they have strong economically-linked enforcement, for instance inclusion within the NAFTA. For example, two long-standing pacts on border environmental issues between U.S. and Mexico, the La Paz Agreement and the Interboundary Water Commission, are not enforced and have had no impact. IV.DISPUTE RESOLUTION: TIGHT SECRECY MAINTAINED, NON- VIOLATION IMPAIRMENT CASES ALLOWED Under NAFTA dispute resolution: (*)one country can challenge existing and proposed environmental or consumer laws of another country as noncompliant with NAFTA rules, and (*)under a clause on "non-violation impairments," can bring cases against measures that do not violate the NAFTA rules, but that cause another NAFTA country to miss an economic opportunity it "could reasonably have expected to accrue to it." This latter provision is outrageous, allowing another NAFTA country to bring a U.S. federal or state environmental or consumer law into dispute resolution merely on the basis that it has impaired an economic expectation of the other country. This provision greatly undermines the meaningfulness of the specific rules of the NAFTA. It puts the United States in the position of having its trading partners interfering with environmental and social choices that could impact their trade, but meet the NAFTA requirements. If a law is found either to violate the NAFTA's rules or to cause impairment of an economic benefit, NAFTA dispute resolution requires that the law be removed or not implemented. Failing such a resolution, one NAFTA country can pay the challenging country compensation for the economic loss caused by maintenance of a successfully-challenged law. The possibility of paying to maintain environmental and consumer laws is used by the Bush Administration as support for the position that the United States can maintain any law it chooses. However, considering current budgetary constraints and political pressures for deregulation of environmental and consumer standards, it seems that the pressure to eliminate or lower such a ransomed standard would be immense. NAFTA dispute resolution maintains the tight secrecy that plagued the NAFTA negotiations. In fact, the NAFTA secrecy language is stronger than that of GATT, requiring strict confidentiality on all documents submitted in dispute resolution, actual dispute proceedings and panel reports until absolutely finalized. Opening up trade policy to the sunshine of public participation was a major goal of environmental and consumer activists. This is particularly important because the NAFTA gives to the Executive branch the sole role of protector of challenged environmental and consumer laws. While absolute secrecy is mandatory, the much-touted allowance of scientific review boards for environmental, health safety or other scientific matters is only allowed at the consent of the disputing parties. If the Parties agree to allow such input, the NAFTA text requires the panel to take it into account. However, the scientific boards when allowed, are limited to questions of fact. Thus, under NAFTA dispute resolution, five person panels of trade officials meeting in tight secrecy will be empowered to second guess the non-factual aspects of environmental and consumer laws such as the priorities set by national and state democratic political bodies. The Bush Administration has made an important, though narrow, improvement in the NAFTA dispute resolution in comparison to that of GATT. For two narrow categories of cases: (*)those arising under the Sanitary and Phytosanitary or Technical Standards texts concerning factual issues concerning environmental, health, safety or conservation, including directly related scientific matters, (*) those concerning conflicts with three named environmental treaties (Convention on Trade in Endangered Species, the Montreal Protocol, and the Basel Convention) a defending Party can insist that a case that could arise under GATT or NAFTA be taken to NAFTA. It seems this provisions would not apply to many environmental and consumer health and safety issues because they do not rise under the SPS or TBT chapters. Additionally, if a challenge of an environmental law does not raise factual issues, it seems the defending Party would not have the NAFTA option and could be forced into GATT dispute resolution where the defending Party bears the burden of proof in all cases. Finally, the NAFTA creates a new North American organization, the Free Trade Commission. The Commission has broad powers to interpret and apply the NAFTA. The Commission is empowered to establish Model Rules of Procedure for NAFTA dispute resolution. The only procedural rules the Commission is required to include are for secrecy and the right to a hearing and the submission of written documents to dispute panels. Yet, it seems that other rules are contemplated though not set out in the text. For instance, reference is made to "scientific bodies set out in the Model Rules..." yet no such bodies are described. Why a complete reporting of planned procedural rules wouldn't be part of the NAFTA text is disconcerting. CONCLUSION The above analysis is only a summary of problems found in several of the sections of the NAFTA important to environmental and consumer protection. On the basis of the information in this memo alone, the NAFTA text published September 6, 1992 is not acceptable from an environmental or consumer standpoint. More detailed analysis of these issues is now available and analysis is underway of other sections including: energy, trade in natural resources, agriculture, impacts on international environmental agreements, consumer issues in banking, pharmaceuticals and health care.