Global Trade Watch’s

Letter to HSUS’ Humane Society International

 

The following letter from Lori Wallach, Director of Public Citizen’s Global Trade Watch, to Patricia Forkan, President of Humane Society International has been circulating among environmental groups and environmental email lists.

 

Patricia Forkan
President
Humane Society International
By Fax and Email
         May 12, 2005

Dear Patti,

I wish we would have had an opportunity to talk before your appearance before the Senate Finance Committee concerning the Central American Free Trade Agreement (CAFTA) because on my agenda was a discussion of some of CAFTAs implications, if it were adopted, for wildlife habitats, fisheries and marine mammals, Multilateral Environmental Agreements, factory farming and other issues of special concern to the Humane Society.

After the hearing, I read your testimony very carefully. Could you clarify - is Humane Society of the United States (HSUS) or Humane Society International (HSI) supporting CAFTA and urging Congress to pass it? You did not state that, although one could certainly come away with that impression given the positive comments you made about CAFTAs environmental chapter.

That HSUS or HSI would support CAFTA seems improbable, given your organization was one of those with the foresight to oppose the North American Free Trade Agreement (NAFTA) in the early 1990s. CAFTA would extend the same problematic provisions found in NAFTA to six additional nations regarding foreign investor challenges to domestic environmental, land use and other policies. Like NAFTA, CAFTAs service sector rules would eliminate countries abilities to halt certain environmentally damaging development, for instance beach front hotels in sensitive habitats.

Meanwhile, CAFTAs environmental chapter is a shorter version of NAFTAs environmental side agreement, but CAFTAs chapter omits some of the NAFTA commitments and contains a yet more attenuated standard regarding environmental enforcement than even used in the NAFTA environmental side agreement. (Your testimony has an error in this regard, as it cites the NAFTA standard of review rather than that in CAFTA.) The enforcement mechanism for this weak standard is the same as in NAFTAs side agreement, except the fine level is lower.

Plus, CAFTA does not include NAFTAs Article 104 savings clause which, with limits, was designed to give precedence to certain Multilateral Environmental Agreements (MEAs), including CITES, to the extent that these environmental treaties provisions conflicted with NAFTAs commercial obligations. CAFTA does include a surrender of CAFTA target nations ocean Exclusive Economic Zones (EEZ) and thus the rights to limit fishing, with the exception that the United States made a full reservation protecting its EEZ and Costa Rica seems to have tried to do so. Given NAFTAs eleven year record, including the failure of the many attempts to use NAFTAs environmental side agreement to actually improve environmental conditions, none of the environmental groups who supported NAFTA now support CAFTA NAFTA expansion.

Regarding the environmental chapter, as I describe below, I disagree with the analysis your testimony presented regarding its operation and value. More broadly, your testimony failed to cover in any way aspects of CAFTA that would seem of special relevance to HSUS and HSIs interests. But most generally, what struck me strongly is that in your testimony you merged together your enthusiastic comments about HSI work in Central America and positive comments about the CAFTA itself.

Whatever good work HSI is doing in Central America or anywhere else in the world is quite a different matter than the potential implications of binding legal provisions of a proposed trade agreement. The implications of the CAFTAs terms must be judged on their own merits separately from the value of the work you are doing in the region, even if it is work that was undertaken in the context of capacity building in expectation of new prospective trade relations. While we also work with people in the governments and civil societies of the CAFTA target countries who are seeking to improve the environmental aspirations and work of such people is altogether a different matter than the implications of CAFTAs provisions for the environment or animal welfare or policies in Central America seeking to further those goals.                                                                                                                                                                
                                                                                              

Before moving to the serious threats to countries ability to maintain much less improve their domestic environmental and animal protection policies that provisions unique to CAFTA pose, I bring your attention to the GATT provisions that the Humane Society is all too familiar with that have been included in the CAFTA text.

CAFTA Incorporates GATT/WTO Rules Used to Successfully Challenge Animal Protection Laws

CAFTA literally includes the very provisions of the GATT that were the basis for the successful 1991 GATT challenge of the Marine Mammal Protection Act and the successful 1998 WTO challenge of the sea turtle regulations of the Endangered Species Act. Indeed, the CAFTA text explicitly incorporates WTO-GATT Article III and its terrible jurisprudence against animal protection laws right into the official legal CAFTA text.    CAFTA also includes the WTO-GATT Article XX exceptions for human, plant and animal health and life that is written in a manner that has proved it repeatedly to be useless in protecting U.S. laws from successful trade challenge. 

It was in the context of the work raising public awareness of these cases tuna -dolphin and shrimp-turtle and fighting to stop the weakening changes to U.S. law they required that my work relationship with HSUS was built. None of us chose to pick a fight with trade or specific trade agreements. Rather, these pacts included provisions that undermined the goals, values and policies on which we had all long worked domestically and internationally from animal protection and the environment to food safety and access to affordable medicines. The two successful GATT and WTO attacks on animal protection laws laws which the Humane Society was key in passing and defending were the basis for your involvement in the Seattle WTO protests, which you reference in your testimony. Of course Humane Society was prominent in those protests: it was animal protection laws, not those regarding forests or toxics, that had been the first victims of retrograde trade agreement provisions.

I do not understand how the Humane Society would consider supporting an agreement that reiterates the very trade rules that have been used successfully to attack key animal protections. This is even more the case given the work that your organization has undertaken to pressure for changes to these rules, especially to the useless WTO-GATT Article XX animal and environmental policy exceptions.

In the past you have rightly argued that the WTO-GATT Article XX exceptions clause required a rewrite so that the provisions could be employed to safeguard countries' legitimate animal laws when they otherwise might conflict with WTO-GATT rules. You noted in your testimony that you had been given a seat at the table by the United States Traded Representative (USTR). I would imagine that you pushed to have the necessary changes to the WTO-GATT language on exceptions made in the CAFTA.

There were many such reasonable requests made and rejected. For instance, many of the free trade Democrats who had been among the minority of 21 Democrats who supported Fast Track in 2001  had asked that USTR simply maintain the labor standards now in effect under our current CBI trade program with the CAFTA countries, rather than using the labor rights language now included in CAFTA which would roll back the existing level of protection. Clinton White House NAFTA czar Rahm Emmanuel, now a congressman from Illinois, asked that certain proposed provisions that would act to extend the length of brand name drug patents be removed before the negotiations were completed. The stubborn refusal by USTR to include any of these requests, despite how badly the administration needed Democratic support for CAFTA, has led many supporters of past trade agreements from NAFTA and WTO to the Singapore, Australia and Morocco Free Trade Agreements - to oppose CAFTA. Perhaps ten Democrats would
  vote for CAFTA were the President to gamble on bringing it to the House floor. 

Like these members of Congress, you must balance what you view as pros and cons of CAFTA to determine your organizations position.  Given your work in these countries is a different matter than the potential implications of the agreements provisions if implemented, I am interested to hear more about what you consider the positive aspects, given the inclusion in CAFTA of these WTO-GATT provisions which you have so rightly opposed in the past on the basis of the turtle and dolphin cases certainly pose a significant negative. 

CAFTA Would Make the Status Quo Environmental, Animal Welfare Situation Worse

Regarding the actual CAFTA provisions which your testimony praised, it might be worth considering how the Humane Society has come to such different conclusions than every other environmental group that has analyzed the text. Certainly the National Wildlife Federation and the World Wildlife Fund, who both supported NAFTA, do not fall into the category of organizations that seem only to criticize and complain that you referenced in your Senate testimony. That was an unfair comment, as you know well that many in the environmental community would love to have a trade agreement that they could support -- if only an agreement would be negotiated that would even meet the do no further harm test. But by any measure, from an environmental, animal welfare or health perspective, CAFTA would make the status quo situation worse.

Even the Bush Administration's 2003 Environmental Review of CAFTA, which is mainly a whitewash of CAFTA's most central environmental and animal protection problems, admits that implementation of CAFTA could result in the destruction of vital migratory bird habitats, raising the question of the fate of other animals that rely on forest habitats. How serious is this issue? Three out of four migratory bird routes in the Western Hemisphere pass through the CAFTA countries. Of the 836 migratory bird species that are listed in the U.S. Migratory Bird Treaty Act, some 350 neo-tropical migratory species (mainly songbirds) migrate through or are winter residents of the CAFTA countries. And it was not the Audubon Society, but the USTR in its Environmental Review, that noted that CAFTA could contribute to the loss of migratory bird habitat through increased investments in the agricultural sector linked to shifting from subsistence farming to feed local residents to more intensive
export-oriented agriculture aimed at serving the U.S. market.

CAFTA Foreign Investor Protections Extend NAFTA Chapter 11s Proved Threat to Environment

But what the Administrations Environmental Review did not include in its analysis would seem to be more troubling for the Humane Society's interests. For instance, CAFTAs Chapter 10 contains the foreign investor protections and private investor-state enforcement mechanism found in NAFTAs Chapter 11.  The problems many members of Congress raised about such provisions in NAFTA (that they provide greater rights to foreign investors operating in the United States than U.S. companies and citizens are granted under the Constitution, including a right for compensation for regulatory takings) have not been remedied in CAFTA, even though the 2002 Fast Track instructed U.S. negotiators to do so. The Humane Society was among the U.S. organizations who rightly battled against congressional proposals to establish a right of regulatory takings compensation in federal legislation in the 1990s because it would have gutted the key legislation used to protect animals, such as the Endangered
  Species Act.

If CAFTA contained only the NAFTA regulatory takings provisions, which it does with its NAFTA-clone language requiring compensation for indirect takings ,  would that not alone be sufficient for the Humane Society to oppose CAFTA? Those CAFTA provisions alone would extend the right to pursue regulatory takings challenges of U.S. environmental and land use regulations to the corporations of six more nations and U.S. corporate subsidiaries located in those nations . To date there have been five successful corporate challenges of NAFTA countries laws under NAFTAs Chapter 11 with $35 million in taxpayer funds paid out to winning corporations. The U.S. has spent over $3 million just defending one pending attack against a California environmental law. Only one of the 42 cases filed, most of which are still being arbitrated, resembled an actual expropriation of private land by the government (Mexico sugar mills) against which these investor protections were ostensibly written
to protect.

Many of these cases are attacks on government regulatory action. In one case, a U.S. company received compensation in a regulatory takings case after being denied an operating permit for a toxic waste dump in an ecologically sensitive zone in Mexico, even after it had purchased the facility from a Mexican firm which had also been denied the same permit under a sale contract specifically recognizing that the facility was a brownfield and could not be operated until it was cleaned up. These NAFTA Chapter cases certainly prove the Humane Societys foresight and wisdom in opposing NAFTA.  Yet, CAFTA would extend this same serious problem.

If you raised this issue with USTR staff, they would note that they added some language to CAFTAs Chapter 10 investor protection rules relative to NAFTAs Chapter 11 which they argue should remedy the problems. However, analysts from Professor Mathew Porterfield at Georgetown Law School to the Association of U.S. State Supreme Court Justices to the National Association of Attorneys General have all weighed in on the failure of USTRs CAFTA language to remedy the serious problems in NAFTAs investor protections, especially as regards opening the United States to regulatory takings claims by foreign corporations and U.S. subsidiaries operating in the CAFTA countries. And, assorted free trade Democrats who were very eager to support CAFTA have come out in opposition to CAFTA solely because of the threat that these investor provisions pose to maintaining nondiscriminatory domestic zoning, land use, environmental and health regulations.

Why have so many analysts inclined to support CAFTA concluded that USTRs changes to the investor protection language did not remedy the serious problems? In some instances USTRs language is simply meaningless, for instance CAFTA Article 10.11: Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns. (Emphasis added) However, in some instances the USTR wordsmithing added problems, as described next.

CAFTA Investor Protections Gutting of Nuisance Law Threatens HSUS Factory Farming Efforts

One such example of new problems in the CAFTA foreign investor protection language bears directly on Humane Societys ability effectively to pursue its work against inhumane factory farming. One tool you have used successfully is to engage local communities about the environmental and health consequences of these inhumane farms, which treat animals like expendable machines and pool their waste in noxious pools.

Yet, under CAFTAs investor rights language, vis-୶is investors from CAFTA countries or U.S. subsidiaries operating in those nations, the U.S. government would no longer be free to employ the long-established legal principle that it is the right and duty of our governments to remedy a nuisance without compensating a property owner. Nuisance is the legal term for any toxic, dangerous, unhealthy or otherwise anti public interest activity or situation. While the principle of polluter pays is not included in many U.S. laws, in the instance of a nuisance, our federal, state and local governments can take action typically to pass a regulation or issue a citation requiring a company to eliminate the nuisance, for instance the source of noxious fumes generated on its premises. Nuisance regulation has been one legal tactic that has been used to limit the size of intensive stock operations and their huge waste pools.

Unfortunately, the clause that USTR added to the CAFTA text which was ostensibly aimed at fixing this accepted NAFTA investor protection problem in fact does the opposite. The clause states directly that despite the longstanding U.S. nuisance jurisprudence, that there are instances when a country must compensate for government actions taken or laws passed to end a health or welfare hazard.  Thus, our governments could be faced with CAFTA tribunals ordering payments of our tax dollars for simply requiring that certain foreign corporations meet our basic health, safety and humane laws. If implemented, CAFTA could provide a tool to undermine HSUSs ability to further its humane farming campaign and implement policies against intensive livestock operations in the United States. 

CAFTA Foreign Investor Protections Expand on NAFTA to Include Federal Natural Resource Concessions

In addition to the problems we know about from NAFTAs investor protection provisions carried over into CAFTA, CAFTAs foreign investment protection chapter includes several provisions that extend beyond those in NAFTA. Given your organization is concerned about habitat and also about fisheries, I wanted to bring your attention to one such addition. CAFTAs investment chapter adds several items to the list of types of investmens that are covered by the regulatory takings and other CAFTA investor protection provisions. One such new item adds to the covered activities all contracts with the U.S. federal government over natural resource concessions within federal territory. This expanded definition of covered investment means that such natural resource concession contracts are subject to CAFTAs investor rules and the investor-state private enforcement system. Thus, foreign mining, timber or other corporations who obtain U.S. government concessions would be empowered to drag o
ur government into a CAFTA tribunal to demand payment of our taxpayer dollars if they dont like the terms and conditions of those contracts.  As we all could foresee in the context of the 1990s regulatory takings fights, the likely end result of such lawsuits would be to weaken the environmental and other conditions for which the government would otherwise have to compensate.

Thus, under current law, when a domestic or foreign company with a federal natural resources concession believes that U.S. laws (for instance, requirements to replant federal forest land it cut or to backfill a mining pit on federal land) are unfair, the only recourse is to bring a case in U.S. court where the best outcome a company could obtain is an injunction a court order to stop what they think is unfair. In contrast, if CAFTA were to come into effect, a foreign corporation including a subsidiary of a U.S. corporation would have recourse to challenge that U.S. law as a violation of its CAFTA foreign investor privileges which extend beyond U.S. property rights law, to do so in a CAFTA investor-state tribunal and to demand payment of our tax dollars to make up for having to follow the rule.

Again, we all know where that sort of legal strategy would lead over time to the gutting of many important laws. This is why we all worked against the domestic regulatory takings proposals in the 1990s. If that domestic threat were not enough, imagine how these laws could be used against the Central American countries to gut their existing environmental laws and thwart progress perhaps even the initiatives of your own Central American branch or of its local allies.

CAFTAs Service Sector Rules Bans on Quantitative Limits and Elimination of EEZ Rights Pose Threats to Habitats and Fisheries

CAFTA contains a negative list services agreement, which means that CAFTAs Chapter 11s requirements cover all service sectors unless an exception has been taken to remove a sector. The CAFTA service sector rules apply not only to trade in services across borders, but also to who can own and operate a service within a countrys geographic territory (including a right for foreign service sector companies to establish a commercial presence in another CAFTA country)  and how and to what degree such foreign-owned services may be regulated. The CAFTA service sector rules forbid countries from maintaining or enacting certain limits on market access for any sector that has not been listed as an exclusion. These requirements are extraordinary, as they simply ban certain types of policies unless a country listed them in their exceptions lists, which some countries did for some sectors.  Among the forbidden limits are limits on the number of service suppliers, including through
quotas, monopolies, economic needs tests or exclusive service supplier contracts; limits on the total number of service operations or the total quantity of a service; and policies which restrict or require specific types of legal entity (for instance a not-for-profit) or joint venture through which a service suppliers may provide a service.   These market access rules are framed in absolute, rather than relative terms, pre-judging certain types of public policies and practices whether they are discriminatory or not.

What does this mean practically for the Humane Societys interests? Unless a CAFTA nation took an exception on a service sector, that country is forbidden from limiting the number of service providers in that sector. Thus, for instance, if a CAFTA government did not take an exception for concessions in national parks, waste incinerators, oil drilling, or golf course construction, it loses the right to limit the number of such businesses, even if the limit applies equally to domestic and foreign service providers. Many local anti-sprawl measures set limits on the number of hotels, residences and resort facilities to minimize the development impact on the environment and protect open space. Laws that seek to preserve marine habitat by limiting oceanfront hotel construction would also run afoul of these rules. Yet such laws are essential to preserving the habitat vital to the survival of the CAFTA countries land and sea critters.

While we are on the subject of the ocean and its inhabitants, I also wanted to make sure that you recognized another troubling aspect of CAFTA that affects the Humane Societys interests in halting over-fishing and protecting marine mammals. While the United States took a very thorough, complete CAFTA reservation for its 200 nautical mile Exclusive Economic Zone (EEZ), of the Central American countries only Costa Rica seems to have tried to take such a complete reservation. However, unlike the United States, Costa Rica does not refer to it explicitly as an EEZ. The Dominican Republic and Honduras took limited reservations which are far from maintaining their EEZ rights.  For Honduras, the limited reservation prohibits foreign flag vessels only in territorial waters (12 nautical miles), not its entire EEZ. For the Dominican Republic, the reservation prohibits foreign flag vessels for artisanal fishing only out to 52 nautical miles. So basically, despite some limited reservatio
ns, they've given up their EEZ rights. I would imagine in your work in Central America, you have encountered the struggle many developing countries face of trying to keep foreign factory fishing vessels out of their EEZs. What is unclear with CAFTA is to what extent countries could maintain any regulation on the terms of foreign ships exploitation of fisheries within their EEZs.

CAFTAs Environmental Chapter Is a Warmed Over Version of NAFTAs Failed Environmental Side Agreement

While your testimony omitted many critical problems with CAFTA that have led to unanimous environmental group opposition, your testimony did discuss CAFTAs environmental chapter. I am assuming that one reason you praise CAFTAs environmental provisions is because they are contained in a chapter of the actual agreement text rather than being in the form of a side agreement a la NAFTA. I will describe why I have a different analysis of the merits of what is in that CAFTA chapter. But there is something quite important that is in NAFTA that is not in CAFTAs environmental chapter or anywhere else in CAFTAs text. NAFTAs core text (not its side agreement) contains a provision (Article 104 Relation to Environmental and Conservation Agreements) that explicitly states that: In the event of any inconsistency between this Agreement and the specific trade obligations set out in CITES, the Montreal Protocol and the Basel Convention and several bilateral border environmental treati
es such obligations (the environmental treaties) shall prevail to the extent of the inconsistency. (insert added)

This clause in NAFTA continues on with some limiting conditions which have concerned some legal scholars regarding how effectively it would actually be in application. However, it certainly was a step in the right direction to state the principle that multilateral environmental agreement provisions should trump NAFTAs commercial provisions. This is the case because under the Vienna Convention on the Interpretation of Treaties, the obligations of a treaty that comes later in time trump those of pre-existing to the extent of conflict unless a signatory country inserts a savings clause in the newer treaty. CAFTA fails to include even the modest clause included in NAFTA or any savings clause that gives precedence to environmental treaties if their provisions conflict with CAFTAs commercial requirements. Given many such treaties, such as CITES, about which Humane Society deeply cares, are enforced in part by banning trade in certain goods, there are clear conflicts between tra
de agreements and the trade provisions in MEAs, a topic which was subject to much discussion at the WTO, although those talks ended in deadlock.

Regarding the laudatory description your testimony gives to CAFTAs environmental chapter, I do not know how to say this more diplomatically, but whomever wrote your testimony made some critical errors. Lets go through the first paragraph:

CAFTAs Environmental Chapter 17 simply is not more complete than in previous free trade agreements. Indeed, NAFTAs environmental agreement is three times as long and contains a variety of binding commitments regarding each countries establishment and enforcement of environmental law not found in CAFTA. Yet, eleven years after its implementation, NAFTAs side agreement is viewed unanimously in the environmental community has having been a failure.

For the provisions it does include, CAFTAs environmental agreement unfortunately largely contains word-for-word replicas of some of the provisions found in NAFTAs failed environmental side agreement, including the enforcement provisions.   You cite as the highlights of CAFTAs environmental obligations the requirements that countries strive to improve environmental laws and effectively enforce their domestic environmental laws.

You put great emphasis on the importance of the word strive in your testimony. My understanding of that word is the opposite of the meaning given to it in your testimony. The clause shall strive to improve is a classic legal construction lawyers are taught to use to make the underlying commitment unenforceable. As long as a country can show it is striving it is not required to actually improve the obligation is to strive not to improve. That same language exists in NAFTA and has proven useless.

Meanwhile, in your testimony, you actually mistakenly cite the NAFTA standard of environmental law enforcement, not the CAFTA standard. Under NAFTA, a government can ask for an arbitral panel in cases when there has been a persistent pattern of failure by that other Party to effectively enforce its environmental law.  The CAFTA standard is stated in the negative, is yet more attenuated and requires a proving that environmental nonenforcement affects trade (which NAFTA did not). Both CAFTA and NAFTAs standard do require an undefined pattern (NAFTA) or sustained or recurring course (CAFTA) of failure to enforce. As was discussed at length during the NAFTA debate, the lack of definition provides enormous discretion for tribunals to dismiss cases for not having risen to the level of non-defined repetition required.

Moreover, what CAFTA and NAFTA unfortunately have in common is an escape clause to the enforce your own laws standard that eviscerates the standard and would do so even if the standard were written in a manner that makes it easier to prove.  In CAFTA, the relevant text states: (a) A Party shall not fail to effectively enforce its environmental laws through a sustained or recurring course of action or inaction, in a manner affecting trade between the Parties(b) the Parties understand that a Party is in compliance with subparagraph (a) where a course of action or inaction reflects a reasonable exercise of such discretion, or results from a bona fide decision regarding allocation of resources.  It is hard to imagine what failure to enforce a countrys domestic environmental laws could not explained away as being based on a bona fide decision regarding allocation of resources.

Given that this standard would make it very hard to find any actionable nonenforcement, discussing the enforcement system seems almost besides the point. However, your testimony lauded CAFTAs environmental chapters enforcement mechanism as especially effective. Yet the environmental enforcement system in CAFTA is what was also contained in NAFTA, except with a lower fine. In CAFTA, assuming one could prove a violation under that standard, the sanction is a fine capped at $15 million, which is paid from the government back to the government. You note in your testimony that this is a substantial amount for a developing country. First, recall that in NAFTA, failure to enforce could face a fine up to $20 million.   But also, I do not understand how a fine that is not paid away but rather is transferred from one government account to another government account is substantial.

The scenario that worries many is that a country will simply pay some of its existing environmental budget into a fine account as required in the CAFTA text, meaning that the fine will neither increase net environmental spending nor serve as an incentive to change conduct. Meanwhile, violations of CAFTAs commercial provisions result in trade sanctions which are not capped at any set level. In contrast to transferring a set amount between government accounts, having a countrys exports hit with high tariffs is motivating of policy change, as we have seen time and again in the WTO context. Yet despite a broad demand from the free trade Democrats for parity in enforcement for CAFTAs commercial clauses relative to its environmental and labor rules, this double standard was employed.

Finally, I also wanted to raise your focus on and praise for the public submission process in CAFTA. The very same process public submissions to an independent commission which can result in nothing more than the writing up of a factual record that is published - was included in NAFTA.  This is not something new in CAFTA. And sadly, the process in NAFTA has never resulted in improved environmental conditions.

On several occasions, NAFTAs Council on Environmental Cooperation (CEC) factual records have been published, but typically after the fact. For instance, the reef-killing cruise ship dock was built in the Yucatan before the CEC report on the matter was ever published, even though Mexican environmental groups had filed through the citizen submission process well before construction began. And this public submission/factual record generation process has not once resulted in changed conduct by the governments. Indeed, after a flurry of citizen submissions filings in NAFTAs first five years, few even bother to file cases. The process has been roundly criticized by the NAFTA CECs own public advisory committee. For instance, Gustavo Alanis-Ortega, who chaired the JPAC in 2003, complained to reporters that Citizens are never asked their opinions once theyve submitted petitions even though a governments take on an issue is actively solicited. [] It can take more than three ye
ars to finish a report. 

All that the CAFTA public submission process would allow is for the Humane Society to ask for an official report about a problem. Given the well documented record after 11 years of the same system not operating effectively under NAFTA, I do not understand your statement that development of a factual record is important and in my opinion has teeth because no country would relish the possibility of having such a record developed on its behavior. In fact, while countries perhaps have not enjoyed having these factual records published, the process has proved to have no teeth in that it has not once resulted in changes in government conduct.

Finally, to close regarding your comments about CAFTAs environmental agreement, I refer you back a few paragraphs in my letter to the discussion of CAFTA not including the savings clause present in NAFTA Article 104 that gives precedence to CITES and the other MEAs. In your testimony, you state that because the Central American countries have adopted CITES, it is now their domestic law and thus subject to the enforce your own law standard of the NAFTA.

I believe this analysis misses a key point: even if you disagree with my analysis of why CAFTAs environmental chapter does not provide for effective action against nonenforcement of environmental measures, enforcement of environmental obligations clearly can result in a trade challenge under CAFTAs commercial obligations. For instance, a CAFTA nations implementation of CITES which inherently includes some trade measures could violate CAFTAs commercial obligations and thus result in a challenge in CAFTAs binding commercial tribunals where violating laws must be changed or the country faces trade sanctions.

Recall that this is precisely what happened to the United States with the WTO turtle-shrimp case, a challenge where CAFTA countries El Salvador and Guatemala made third party submissions against the U.S. law. U.S. implementation of its CITES obligations is done through the U.S. Endangered Species Act. The WTO panel ruled that the Endangered Species Act regulations that the United States used to put into effect CITES protections for listed sea turtles violated U.S. WTO trade obligations.

You might argue that the CAFTA target countries could go to WTO to make such an attack on each others laws, so that this is also possible in CAFTA is not relevant. However, CAFTA was the opportunity to remedy that threat as between the involved countries -- by not inserting into CAFTA the same WTO-GATT language, by providing a meaningful exceptions clause instead of the GATT Article XX language and by including a savings clause for MEAs. The Humane Society and many other organizations have worked for over a decade to try to change the WTO-GATT rules in this regard with no success, in part because so many countries would have to agree. The Free Trade Agreements (FTAs) would be the venue for trying to change the model. The FTAs, including CAFTA, are being used by every other interest to accomplish what they cannot at WTO. Yet again, reasonable requests simply to include provisions that could hold harmless from challenge environmental and for animal protection policies have been
  rejected regarding CAFTA.

I have been trying for nearly a year and a half to get an appointment to meet with you to discuss assorted trade matters. I hope we might meet soon. In addition to these important CAFTA issues, there remain several medium term issues I am eager to discuss: a worrisome change in the Harmonized Tariff System that adds cetacean meat to a previous customs classification that only previously covered live marine mammals (aquarium trade e.g.) which perhaps is connected to the attack on the whaling ban and issues related to endangered species trade vis-୶is the proposed U.S.-Thailand Free Trade Agreement. I hope to meet with you soon.


Yours Sincerely,

       Lori Wallach
       Director, Public Citizens Global Trade Watch