Environmental Provisions in Trade Agreements: A Comparative Analysis of US and EU RTAs

Abstract

Abstract

Trade liberalization can raise global living standards, but it can also lead to faster depletion of environmental resources. As a result, regional trade agreements (RTAs) have been increasingly leveraged to strengthen international environmental governance. Developed countries, particularly the US and the EU, have been in the forefront of inserting a wide range of detailed environmental provisions in their trade agreements. Against this backdrop, this paper provides a comparative analysis on the environmental provisions in US and EU RTAs. It suggests that the two major economies in the Atlantic show differences in how they address trade and environmental linkages, particularly in terms of the following three aspects: legal enforcement, environmental cooperation, and climate change. This paper further suggests that the contrasting features can be attributed to the different historical background, political framework, and international relations of the US and the EU. For instance, unlike the US, EU member states are allowed to establish their own environmental regulations, making it difficult for the EU to insert environmental provisions that provide for legal enforcement. Moreover, whereas the US focuses on ensuring a level playing field in trade and environmental legislation, the EU is more devoted to attain coherence in trade, environmental, and developmental objectives with third countries, especially candidate or potential candidate countries to EU membership as well as developing or least-developed countries (LDCs). Lastly, in terms of the precautionary principle, the EU has taken stronger action against climate change in comparison to the US. This paper further gives an outlook on whether there is any possibility for their future environmental provisions to converge, as the Transatlantic Trade and Investment Partnership (TTIP) is currently under negotiations.