Should the U.S. Trade Representative Ensure Trade Deals Have Strong Environmental Protections? (H.R. 7064)

What is H.R. 7064?

(Updated February 8, 2021)

This bill — the Fair Environmental Trade Agreements Act of 2018 — would require the U.S. Trade Representative (USTR) to certify that any trade agreements the U.S. enters into with other countries would include strong, enforceable provisions relating to environmental and labor standards. The House Ways and Means Committee and Senate Finance Committee would receive these certifications from the USTR.

Argument in favor

Environmental protections should be part of free trade agreements in order to ensure that all manufacturers are playing on the same level, and doing their part to protect the environment. At present, environmental protections in free trade agreements are window-dressing with no power.

Argument opposed

Global free trade without environmental restrictions is the best way to protect both the environment and those who benefit from free trade. The best way to ensure better environmental protections in the developing world is to increase those countries’ wealth through trade without restrictions.

Impact

Global free trade; U.S. trade agreements; House Ways and Means Committee; Senate Finance Committee; and the USTR.

Cost of H.R. 7064

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Mike Coffman (R-CO) introduced this bill to require the USTR to certify that any trade agreement the U.S. enters into with another country includes strong and enforceable provisions relating to environmental and labor standards:

“It makes no sense that we are buying products, once made in America, from countries that are making these same products more cheaply because they have no environmental or labor standards.  Environmental and labor standards need to be a requirement for every trade agreement that the United States enters into.”

Rep. Coffman argues that this bill is part of ensuring that U.S. manufacturing is on an equal playing field vis-a-vis its international competition:

“The Trump administration is focused on trade deficits in its drive to negotiate new trade agreements, but it should also be making sure that U.S. manufacturing has a level playing field with its overseas competitors when it comes to environmental and labor standards.”

Jim Stanford, an economist and the director of the Centre for Future Work at the Australia Institute, adds that at present, most trade deals’ requirements around environmental policy are merely window dressing:

“Most ‘free trade’ deals… feature token language about protecting labour and environmental standards. These provisions are window-dressing: responding to fears that global competition will spark a downward spiral in social standards. Typically these clauses simply commit signatories to follow their own laws – with no requirement that those laws are decent to start with. Progressive trade deals would have safeguards that are enforceable, including requiring participating jurisdictions to respect universal standards or lose preferential trade rights. Where trade partners have different standards (such as, for example, levying varying degrees of carbon pricing), border adjustments must be permitted so that trade competition does not undermine environmental and social progress.”

The Heritage Foundation’s Ana Eiras and Brett Schaefer argue that free trade without environmental conditions is the best way to protect the environment and those who benefit from global free trade:

“[There is] concern among some Members of Congress that free trade creates a "race to the bottom" in environmental protection. Nothing could be further from the truth. Poor nations cannot afford to value environmental protection more highly than such basic goods as food or health care. If poor nations are to increase environmental protection, they must first increase their wealth. Free trade is a necessary component in catalyzing economic growth. Therefore, free trade is critical in providing the economic means that will enable countries to adopt measures that enhance their protection of the environment…. Even if trade agreements were forged with environmental restrictions … they would be more likely to undermine environmental protection in developing countries rather than promote it. Countries with higher incomes are better able to afford environmental protection. Imposing such standards on poorer nations places them in a Catch-22 between paying for environmental protection or staples like food or health care.”

Of Note: Currently, the trade promotion authority law’s list of negotiating objectives includes holding trading partners accountable for labor and environmental standards — but it doesn’t require these standards to be part of a trade agreement.

Media:

Sponsoring Rep. Mike Coffman (R-CO) Press Release