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GAC Advice Letter May 12, 2004

May 12, 2004

 

The Honorable Michael O. Leavitt
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue N.W.
Washington, D.C. 20460

Dear Administrator Leavitt:

The Governmental Advisory Committee (GAC) to the U.S. Representative to the North American Commission for Environmental Cooperation (CEC) met on April 29 and 30, 2004, in Washington, D.C. It is my pleasure to submit to you the following report from our meeting. This letter provides advice on four major topics: 1) EPA's Draft CEC Strategic Vision/Mission document, 2) the Draft Ten-Year Review report, 3) the Article 10(6) process and 4) issues related to finance and the environment.

First, we would like to express our appreciation to all of the government officials who organized and provided valuable information on the CEC's work from EPA's Office of Cooperative Environmental Management and the various presenters from the Office of International Affairs, EPA's Office of General Counsel, and from the Office of the U.S. Trade Representative. The information they provided was very useful in developing our advice. Doug Wright's presentation on behalf of the CEC Secretariat was also very useful in understanding the current status of the budget and the Commission's strategic direction. In addition we would like to thank Jane Gardner, a member of Joint Public Advisory Committee for participating in our meeting. Finally, we were excited to have the opportunity to meet with Jennifer Haverkamp and John Mizroch, the U.S. members of the CEC Ten-Year Review and Assessment Committee (TRAC).

We spent most of our time and attention on two topics: the draft "Vision/Mission" document prepared by EPA to spark discussion of a long-term strategy for the CEC; and the draft report on the ten-year review conducted by the TRAC. Because the Alternative Representatives to the CEC Council met last week in Mexico to begin to discuss a long-term CEC strategy, in preparation for the June 2004 Council meeting, we were encouraged to provide an immediate response to the draft Vision/Mission paper. As a result, we provided EPA a two-page response at the close of our meeting, on April 30. We emphasized at the time that the paper was necessarily informal because we did not have time to receive the concurrence of all GAC members who were not able to attend our Friday session. Upon review, the paper has received their concurrence, and it is attached to this letter as our Advice No. 2004-1. We look forward to returning to these issues as they continue to be considered by the U.S. government. In particular, we welcome Jerry Clifford's suggestion that he might hold a conference call to tell us about any outcomes of the Alternative Representatives' retreat.

Because the TRAC Report is also on a short time-line, we have decided to include a number of overarching comments. Our responses are included in Advice No. 2004-2, which we request that you provide to the TRAC.

We considered two other topics more briefly: the proposed agenda for reinvigorating the Article 10(6) group; and issues of finance and the environment. Advice on each is attached.

We hope our advice is useful in developing U.S. positions for the CEC Council Session in Puebla, Mexico on June 21-23rd. If your schedule permits, we would very much welcome the opportunity to meet with you there, as the GAC did last year. We would also like to pursue a joint meeting of the advisory committees, as we have traditionally done in the past.

Sincerely,


Stephen M. Mahfood, Chair
Governmental Advisory Committee

cc: Judith Ayres, Assistant Administrator for International Affairs
Jerry Clifford, Deputy Assistant Administrator for International Affairs
John Knox, Chair, U.S. National Advisory Committee
Donna Tingley, Chair, Joint Public Advisory Committee
Jean Perras, Chair, Canadian National Advisory Committee

Members of the U.S. Governmental Advisory Committee:
Charles Collette Sarah D. Lile
Michael Colvin James R. Matz
Lisa Gover Ricardo Martinez
Robert Huston Harvey Rubin
Karl Kalbacher  

Governmental Advisory Committee
to the U.S. Representative to the
Commission for Environmental Cooperation

Advice 2004-1: Response to EPA Draft Strategic Plan

FUNDING/BUDGET
THE COMMITTEE RECOMMENDS:

RESPONSE TO QUESTIONS POSED BY EPA
(1) What features of the CEC do you think should stay the same and why?

(2) What areas are we not working on that we should be doing more with?

(3) Given the limited budget, what is the most valuable function of the CEC? Analytical? Project Implementation? Developing pilots and spinning them off? Information gathering?

(4) Have the analytical deliverables of the CEC, for example the Art. 13 reports, been valuable to the various North American stakeholders and the public?

(5) Is the TRAC and the U.S. strategic goals substantive enough to set a new 10-year direction for the CEC?

Governmental Advisory Committee
to the U.S. Representative to the
Commission for Environmental Cooperation

Advice 2004-2: Response to the Draft Report
of the Ten-Year Review and Assessment Committee

We would like to congratulate the TRAC for staying on course and providing the U.S. Governmental Advisory Committee (GAC) the opportunity to review their draft report. We realize the TRAC was given an awesome mandate to "undertake a retrospective of the implementation of the NAAEC… including an assessment of the environmental effects of the NAFTA," the 1994 continental free trade agreement, with a view to chart the CEC's path for the next decade. Understanding this is not an easy task we would like to thank the six TRAC members and its consultants for developing an excellent draft. Below are our views on the different sections of the draft TRAC report. Some members of the GAC may also present more detailed comments directly to the TRAC.

General Comments

The GAC strongly encourages the TRAC to make specific recommendations which can be the basis for developing a next ten year plan for the CEC.

On section 3.0 and 5.5, the report acknowledges that many (maybe most) issues are bilateral in nature and are properly addressed by many institutions at all levels of government. The key is identification of the real trilateral (continental) issues which require CEC attention. This is what really constitutes the "common agenda." After identification, it is CEC's role to help develop an agenda that addresses these issues, making maximum use of the vast resources that already exist within and outside the government.

Section 3.0: A North American Environmental Agenda
(meeting obligations; the work program; increasing capacity; etc)

At the outset we want to reiterate our immediate concern about lack of resources supporting the CEC process. Under Section 3.5 the recent budget crisis was triggered by the appreciation of the C$. Prior to that, the CEC budget had grown slightly (less than 2% per year) due to a weakening of the C$. In real terms, the budget was gradually declining, and this matter requires attention. However, the exchange rate issue also needs attention, and is the most immediate cause for concern. In addition, we are concerned that the annual dues of the Parties have not changed in ten years to account for inflation. Most responsible fiscal accounts in the public and private sector account for inflationary pressures. It behooves the Parties to seriously consider mechanisms to account for inflation or find innovative ways to increase the CEC's budget. Some ideas discussed in the GAC included raising national dues based on Gross Domestic Product or finding ways for the Parties to add contributions via a North American endowment fund or a matching grants program.

On section 3.4, the Article 13 report process seems underutilized. It could be used as the vehicle for focusing attention on new common (trilateral) issues, and creating an initial understanding and scope of the issues and a proper attack agenda. It is very disturbing that the recent budget reduction (due to rapid appreciation of the Canadian dollar) has resulted in a de-emphasis of Article 13 activities.

Section 4.0: Achieving the Environmental Goals and Objectives of NAFTA
(cooperation with the Free Trade Commission; studying the effects of free trade)

The GAC would like to acknowledge the value and importance of the CEC's methodology on understanding the environmental effects of trade. We agree with the TRAC report that this analytical framework and the subsequent studies may be among "one of the CEC's major achievements." We would recommend that the Parties continue to support the development of this rigorous methodology so one day we may understand better the links between trade and environment, i.e., both the positive and the challenging aspects of this interactive process.

Regarding cooperation with the Free Trade Commission, the GAC was very disappointed with the tone of section 4.1. The tone seemed quiet defeatist and one sided. The views seemed heavily weighted on the side of the trade perspective. Although trying to be sensitive to the environmental concerns, in essence it concluded with an argument why the NAAEC should not be involved in NAFTA affairs; instead of thinking about creative options where both institutions could find synergies in their work to further both the environment and trade interests. Under section 4.0, there is a danger that the referenced "structural" problems with the NAFTA/NAAEC relationship could be read as making cooperation between CEC and FTC impossible. This would be an unfortunate outcome. The GAC suggests that the structural issues need to be acknowledged so as to be dealt with, but that the more important point is that the original underpinning - the "race to the bottom" - for CEC/FTC cooperation have proven largely unfounded. Therefore, 10(6) should be rejuvenated and somewhat refocused.
The GAC sees great opportunities in coordinating the activities of NAFTA working groups with CEC working groups. For example, from the GAC's governmental perspective, we see benefit in including state government view points in some of the work being done in the NAFTA groups, such as the Automotive Standards Council, or the Pesticides Working Group. At a minimum we could see the CEC participating in some of the environmental topics being discussed in these type of NAFTA groups. In addition, there are other organizations internationally where government officials from one agency discuss topics that have already been cleared by one government such as the OECD, and the WTO. It would probably be helpful for trade and environment officials from North America to consider having united positions to share in other international fora.

Section 5.0: Cooperation Among the CEC Institutions

From our vantage point, we think that cooperation among the CEC institutions has been effective. However, we understand that as with any young institution, defining roles and responsibilities is always challenging. One observation is that the institutions could benefit from greater transparency in understanding the appropriate staff responsible for the different aspects of the CEC's work program. The CEC website contains a listing of the Secretariat's staff and their titles. However, if JPAC or another member of the public were to go to any of the NAFTA country's websites they would not be able to find who is the Alt. Rep, or members of the General Standing Committee or NAFTA experts. Facilitating transparency of staff could greatly improve the communications among the CEC institutions.
Lastly, we would like to inform the TRAC that the GAC is a 12-member committee, not ten as stated on page 34, composed of members from state, local, and tribal governments.

Section 6.0: Public Involvement
(NAFEC; citizen submissions procedure; etc.)

Under section six, the GAC would like to express its strong support for the incredible job the NAFEC has done in developing a North American constituency. The NAFEC has been instrumental in reaching out to grassroots communities in all of North America.

Regarding the citizens submission process, the GAC considers the findings of the TRAC informative and clearly presented. We would tend to agree that the issues between the JPAC and the Council are mainly procedural rather than substantive and would support continued deliberations to find a balance process where the JPAC and the Council both think the process is fair and still is in the best interest of the common good in North America.

Governmental Advisory Committee
to the U.S. Representative to the
Commission for Environmental Cooperation

Advice 2004-3: Reinvigorating the Article 10(6) Working Group

The GAC was pleased to hear that the Article 10(6) Environment and Trade Officials Working Group are meeting to discuss topics that could be part of the group's agenda. We particularly welcomed the news that the Alt Reps are meeting with their trade counterparts. We look forward to hearing about the results of the meeting, and encourage EPA and USTR to continue to pursue the reinvigoration of the Article 10(6) group. Consistent with our position on CEC topics generally, we recommend that the U.S. government consider now, at the outset of the discussion, what they hope to achieve and, in particular, how and to whom the products of their consideration will be handed off or presented.

We also welcome the EPA/USTR list of specific topics, such as renewable energy, financial relevant information, green markets and invasive species, but we were surprised that they did not mention developing mechanisms for coordination between the environmentally focused NAFTA working groups and the CEC. We again encourage EPA and USTR to include on the 10(6) agenda ways that the NAFTA working groups might be informed by and might inform the work of the CEC. We refer them to our Advice No. 2003-10 of last October, in which we emphasized the degree of overlap between the substantive activities of the NAFTA working groups on the one hand and the CEC on the other, and in which we expressed our concern that the relatively small degree of coordination between the two sets of activities. We urge the government to see this as an opportunity to strengthen both institutions by drawing in a wider range of stakeholders.

In addition, we recommend that the 10(6) Environment and Trade Officials Working Group consider identifying new areas for analysis and discussion, which are included in Article 10(2) of the NAAEC. Some of the potential areas of analysis could be identifying: 1) approaches and common indicators for reporting on the state of the environment or 2) identifying invasive species that are harmful to the North American ecosystems. The 10(6) Work Group could also return to its previous focus on procedural clarifications regarding institutional cooperation provisions of Article 10(6) such as, 1) among the objectives of the NAAEC is to "support the environmental goals and objectives of the NAFTA" [Article (d)]. Given the numerous environmental references explicitly contained in the NAFTA, what are the mechanisms to make that support work? 2) Given the number of FTC working groups that are addressing environment-related issues, what procedures are needed to provide experts and advice from Council to those working groups?

Governmental Advisory Committee
to the U.S. Representative to the
Commission for Environmental Cooperation

Advice 2004-4: Disclosure of Environmental Information and the Financial Sector

The GAC is supportive of the NAC's recommendation related to the continuation of work of the CEC on disclosure of environmental information and the financial sector. See "NAC advice 2004-5: Disclosure of Environmental Information and the Financial Sector. "

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