NAFTA's Effects on the Environment

Proponents and opponents of NAFTA have so hardened views of the treaty that it can be hard to gain a balanced view of its overall effect. One of the the areas of disagreement has been the treaty's effects on the environment.

On one hand, NAFTA established a norm of cooperation and created new institutions that can deal with the environment. The treaty prompted the consolidation of environmental legislation in Mexico from its formerly piecemeal implementation. With enhanced public participation, the treaty championed new initiatives. While many of the new standards were voluntary and heavily dependent on self-regulation, citizens gained a complaint mechanism and tools for dealing with persistent non-enforcement.

On the other hand, NAFTA demonstrated the ineffectiveness of governments outside of their jurisdictions. Many of the new institutions were underfunded and budget cuts in Mexico caused enforcement to lag. The dispute resolution mechanism is so poorly designed that its use actually seems to have discouraged future progress. Incomplete compliance and lack of sanctions have reinforced the reality that outcomes will not be transformed anytime soon.

At the end of the day, NAFTA's greatest effect on the environment will come about through the wealth effect on Mexico. The treaty has driven the dramatic rise of the export industry in Mexico and created millions of jobs in spite of the Peso Crisis and intense Asian competition. Increased industrialization actually led to a sharp increase in pollution, but the long term trend is likely to be precisely the opposite. The world's wealthiest countries are also the world's cleanest, because people are unwilling to live in a dirty environment if they can afford to clean it up.