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Trade and Environment

Ongoing Environmental Assessments

Environmental Assessment of Trade - FAQ

SCOPE

13. What is the scope of the various EAs of trade and investment negotiations?

    • The scope of the EAs for trade and investment negotiations is guided by the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations.

    • The EAs aim to identify and assess the likely and significant environmental impacts on the Canadian environment. Transboundary, regional and global environmental impacts will be considered when they have a direct impact on the Canadian environment.

    • EAs cover issues for which there is a negotiating mandate. This will vary from one negotiation to another.

    • The Framework focuses the scope of analysis to environmental impacts in Canada. The environmental analysis is focused where the negotiations are expected to have an economic effect. This is determined based on the expected changes in the scale and structure of economic activity and the products and technology that are traded. The legal and policy effects of the agreement are also assessed for their environmental implications.

14. On what basis is the expected outcome of a negotiation determined for the purposes of the EA?

    • The analysis during an EA of a trade or investment negotiation is based on a scenario, which is developed by the interdepartmental EA committee in charge of the specific negotiation.

    • Some scenarios, such as those pertaining to agriculture and non-agricultural market access negotiations, are quantitative and assume different percentages of liberalization. Others, such as those relating to issues such as services, rules and trade facilitation, are qualitative.

    • The principal function of these scenarios is to provide a benchmark. They are strictly a tool for conducting the analysis.

15. Why doesn’t the Government of Canada approach to EA of trade and investment negotiations assess environmental impacts outside of Canada?

    • While many environmental issues should be examined within the greater global context, sovereignty issues, limited data and resources, and practicality limit the focus of the environmental assessment to domestic impacts.

    • Transboundary, regional and global environmental impacts are assessed when they directly impact the Canadian environment. This approach is in accordance with the 2001 Framework for Conducting EAs of Trade Negotiations..

16. Why doesn’t the Government of Canada approach to EA of trade and investment negotiations assess social impacts of negotiations?

    • EAS are being conducted in accordance with the 2001 Framework for Conducting EAs of Trade Negotiations, which is designed to identify and assess environmental impacts linked to the trade negotiations.

    • However, the analysis carried out to determine the environmental impacts of a negotiation carries with it an implicit connection to consideration of social benefits: a healthy environment benefits the well-being of its inhabitants.

17. Are other countries conducting environmental assessments of trade negotiations?

    • Canada is not alone in conducting environmental assessments of trade negotiations. Other countries, including the US and the EU assess trade negotiations according to their own methodologies. However, Canada is one of the few countries conducting environmental assessments of negotiations for investment agreements.

    • Multilateral organizations such as UNEP and NGOs also undertake work to assess the potential impacts of trade negotiations.

    • International collaboration and capacity building have been recognized as essential for continued success in the area EA of trade. Canada shares information on its EA of trade work with its negotiating parties, and actively participates in discussions in international forums such as the WTO, the North American Commission for Environmental Cooperation, APEC, and the International Association for Impact Assessment.

18. How does the approach used within the Canadian government compare with the approach others use to assess the impacts of trade negotiations?

    • Our approach has similarities and differences with other methodologies. An overview of three other methodologies is provided here: the Unites States, European Union, and the North American Commission for Environmental Cooperation.

    • United States

      • The US conducts ex ante environmental reviews (ERs) of trade agreements, in accordance with Executive Order 13141 and associated guidelines. The Order is applicable to comprehensive multilateral trade rounds, bilateral or plurilateral free trade agreements, and major new trade liberalization agreements in natural resource sectors.

      • The Office of the United States Trade Representative and the Council on Environmental Quality oversee implementation of the Order in consultation with interested agencies on the Trade Policy Staff committee, the US Environmental Protection Agency and US Agency for International Development.

      • The ER process is initiated with a notice in the Federal Register. The scope of the review is determined with consideration to the objectives of the proposed trade agreement, a realistic range of alternatives for accomplishing the objectives of the trade agreements, and reasonably foreseeable environmental impacts.

      • Analysis during the ER is focused on the implications for environmental laws and regulations, economically driven environmental impacts, and ways to address the identified environmental impacts. The Guidelines provide special considerations for the scoping of global transboundary impacts that include the scope and magnitude of reasonably foreseeable global and transboundary impacts, implications for US interests, the availability of relevant data, and diplomatic considerations.

      • An interim ER document is normally issued for public comment during the negotiations. A final ER document is issued publicly after the conclusion of the agreement.

      • Details on environmental reviews of trade agreements in the US.

    • European Union

      • The European Union conducts ex ante sustainability impact assessments (SIAs).

      • The SIA methodology calls for the consideration of economic, environmental, and social impacts of trade negotiations, and considers the potential impacts of the negotiations in partner countries.

      • The SIA methodology has four main stages that are applied as the negotiations proceed. Analysis is carried out by parties external to the government. First, a screening is undertaken to determine which proposed trade measures can be excluded from further analysis because they are not expected to have significant impacts. The next stage is scoping to establish the coverage of each SIA. Each of the measures identified in the screening are considered with respect to likelihood and significance of potential positive and negative on sustainable development. Ideally, this is carried out through a preliminary SIA. Subsequently, detailed SIAs are carried out for each individual trade measure. Finally, the SIA methodology calls for a full synthesis of impacts assessed and an analysis of mitigation and enhancement opportunities to suggest measures that may enhance the overall impact on sustainable development of the proposal.

      • For each report, the European Commission prepares a paper, based on the analysis, that defines points of agreement and respond on disagreements and considers what further analysis should be undertaken and what policy action should be implemented including capacity-building and trade-related assistance initiatives, international regulation, use of trade and regional policy instruments within the EU. There are procedures in place for consultation and dialogue with stakeholders from both within the EU and from other countries.

      • Details on sustainability impact assessments of trade negotiations in the EU.

    • North American Commission for Environmental Cooperation (NACEC)

      • The North American Agreement on Environmental Cooperation (NAAEC) [Article10(6)(d)], directs the Commission for Environmental Cooperation (CEC), to consider on an ongoing basis the environmental effects of the North American Free Trade Agreement (NAFTA).

      • The Analytic Framework for Assessing the Environmental Effects of the North American Free Trade Agreement (NAFTA) provides an ex poste methodology for assessing the effects of NAFTA rule changes, trade flows, investment flows, and institutions on the four major media of the ambient environment. Independent organizations and individuals with funding from the CEC carry out analysis and the findings are reported at public symposiums.

      • Details on the NACEC methodology and the research presented at NACEC symposia on assessing the environmental impacts of trade.

19. Does the Government of Canada assess trade and investment policies unrelated to a specific negotiation?

• The 2004 Cabinet Directive on Environmental Assessment of Plans, Programs, and Policies requires that a strategic environmental assessment be conducted when a proposal is submitted to an individual Minister or Cabinet for approval that may result in important environmental effects (either positive or negative).

• In keeping with this requirement, International Trade Canada has a process in place to conduct preliminary environmental scans of proposals considered by the Minister of International Trade via Memorandum to Cabinet. This process identifies how environmental considerations could be integrated into the proposal to enhance potential positive environmental impacts, and mitigate potential negative environmental impacts. It also determines the need for a detailed environmental analysis.
  

20. Are trade and investment disputes subject to an environmental assessment?

    • The Framework for Conducting EAs of Trade Negotiations was not designed to apply to trade dispute negotiations. However, this does not preclude the integration of environmental considerations into the policy development and decision-making related to a trade dispute. This outcome is facilitated by the processes in place within International Trade Canada to apply the 2004 Cabinet Directive on Environmental Assessment of Plans, Programs, and Policies to Memoranda to Cabinet that are considered by the Minister of International Trade.