US groups warn on trade agreement
November 26, 2003
US groups warn on trade agreement
Defenders of Wildlife, Friends of the Earth (U.S), National Environment Trust, National Wildlife Federation, Natural Resources Defence Council & Sierra Club
Australian Federal Parliament
C/o The Hon. Mark Vaile
Federal Minister for Trade
Parliament House
Canberra, ACT 2600
Australia
By Fax: 61 2 6273 4128
Dear Members of Parliament,
Re Australia- U.S Free Trade Agreement
As negotiations concerning the Australia-U.S Free Trade Agreement are
fast approaching their conclusion, we are writing to convey our concerns
regarding the environmental and social implications of the FTA.
We represent some of the USA¹s largest environmental NGOs with a combined
membership base of several million Americans. We support the goal of building
a global economy that protects the environment, while raising the living
standards of all people through out the world. Regrettably, as set out
below, the Australia-U.S Free Trade Agreement (AUSFTA) may undermine environmental
protection initiatives within Australian and U.S jurisdictions.
Investment Chapter
We are particularly concerned by the potential for AUSFTA to include an
investment chapter based on chapter 11 of the North American Free Trade
Agreement (NAFTA). Since the commencement of NAFTA, foreign investors
have utilized the investor-state dispute settlement mechanism contained
in chapter 11 to challenge the environmental laws and social policies
of the U.S, Canadian and Mexican Governments. These cases have involved
claims for as much as a billion dollars in compensation. Within North
America, this has become a major issue in undermining public confidence
in the desirability of trade and investment liberalization.
An investment chapter based on NAFTA could also provide foreign investors
with greater legal rights than those currently enjoyed by U.S and Australian
investors under their respective domestic legal systems. This will occur
as a result of the protection granted to foreign investors against government
expropriations without the payment of compensation. Under NAFTA, an extremely
wide definition of expropriation has been adopted which requires compensation
to be paid to foreign investors when government actions "significantly
interfere" with the use of property. This is in addition to the more conventional
notion of expropriation which involves the taking of property.
In our view, an expropriation clause of this nature would be contrary
to long standing legal principles enshrined in U.S and Australian law
which have permitted our respective governments to regulate the use of
land for environmental protection purposes without a legal requirement
to pay compensation.
Finally, an investment chapter based on NAFTA will incorporate a dispute
settlement process into AUSFTA that will enable foreign investors to choose
to have their disputes heard before international Tribunals that are devoid
of many of the judicial safeguards of domestic Australian and U.S Courts.
For example, the Tribunal¹s procedural rules permit the parties to the
dispute to choose the Tribunal judges-with huge potential for bias, the
pleadings and hearings are often not publicly accessible and there is
no mechanism for appeal.
We encourage the Australian Parliament to closely scrutinize the investment
chapter of AUSFTA to ensure that it does not incorporate the negative
aspects of NAFTA as outlined above. In order to do this, we recommend
that the investment chapter include an environmental exception clause
drafted to ensure that environmental laws are not vulnerable to inappropriate
challenges. Other safeguards would include restricting the right to initiate
investment disputes to the Australian and U.S Governments, ensuring that
the FTA provides "no greater rights" to foreign investors and requiring
investment disputes to be heard in the Australian or U.S domestic Courts.
Land Clearing
We are also concerned about the potential for AUSFTA to increase land
clearing in Australia. We understand from scientific studies, including
those conducted by the Australian Government, that the biggest threat
to Australia¹s globally significant biodiversity is land clearing. Land
clearing also causes dryland salinity, a form of desertification, and
also contributes a large percentage of Australia¹s greenhouse gas emissions.
Given that most land clearing in Australia occurs for the conversion of
land to pasture, it is evident that land clearing remains closely linked
to the Australian beef industry. Already the U.S. is Australia¹s biggest
export market for beef, around half of which comes from the State of Queensland
where the largest proportion of land clearing in Australia takes place.
Should the FTA increase Australian beef exports to the U.S., it is highly
likely Australia¹s land clearing will escalate to satisfy the beef industry¹s
increased demand for pasture land.
We were pleased to hear of the in principle agreement¹ between the Australian
Government and the Queensland State Government earlier this year to end
clearing old growth woodlands in Queensland. However, six months has passed
since this time and negotiations appear to have stalled. This concerns
us greatly.
Accordingly, we urge the Australian Parliament to ensure that the clearing
of old growth native vegetation, particularly in Queensland, is brought
to an end before AUSFTA exacerbates Australia¹s land clearing problems
any further.
Environmental Review
In March of this year, the U.S Government commenced an environmental review
of AUSFTA as is required under U.S law. The Australian Government should
commence a similar environmental review process, modelled on the U.S process,
but involving broader public input including through formal public hearings.
As outlined above, AUSFTA has the potential to result in some unintended
environmental impacts, particularly arising from increased agricultural
production.
We therefore encourage the Australian Parliament to ensure a full environmental
review of AUSFTA is undertaken before the agreement is ratified. This
review will compliment the review currently underway in the U.S and ensure
that both governments can take appropriate action to ensure that AUSFTA
does not liberalize trade between the U.S and Australia to the detriment
of the environment.
Sincerely,
Stas Burgiel, PH.D David Waskow
International Policy Analyst Trade Policy Coordinator
Defenders of Wildlife Friends of the Earth (U.S)
Bill Frymoyer Jake Caldwell
Director of Public Policy Program Manager,
National Environmental Trust Trade and Environment
National Wildlife Federation
Susan Casey- Lefkowitz Dan Seligman
Senior Attorney Director
Natural Resources Defence Council Responsible Trade Program
Sierra Club