NAFTA deals with sanitary and phytosanitary (SPS) measures in Chapter 7, and all other standards-related measures (SRM), including environmental standards, in Chapter 9. The two chapters outline how the parties should establish their respective levels of protection, set the standards which achieve those levels of protection, and base those standards on science.

For both kinds of standards, NAFTA gives parties the right to establish the levels of protection they find appropriate. But with SPS measures on non-human health issues, the parties must do a sort of cost-benefit analysis of the problem and the solutions, and are bound to enact the most cost-effective solution. All SPS measures must also avoid differences in levels of protection in different cases, where those differences result in discrimination against foreign-produced goods. A party could not, for example, set low levels of protection on the fruits that it grows, and high levels on those it must import.

Having established the appropriate level of protection, the parties must draft legislation to achieve it. The SPS text requires that any measure be "necessary" to achieve the level of protection the party has chosen. In the GATT/WTO, "necessary" was at one point held to mean "least-trade restrictive," a condition disliked by environmentalists and others. The U.S. claims that the parties agreed not to use this test, but there is no legal agreement to that effect.

NAFTA also specifies that the parties' standards should be "based on scientific principles." In practice, this means (according to the U.S. interpretation) that although science must be used to determine the risks posed by a product, regulators can then set the tolerable risk at any level they like. In other words, science is not used to choose the appropriate levels of protection—this is a public policy choice—but only to determine the risks, which are then in turn used to determine levels of protection.

The NAFTA standards text seems to incorporate a precautionary approach; Articles 907.3 of the SRM text and 715.4 of the SPS text allow parties to enact environment, health and safety measures even where scientific evidence is inadequate to assess risk.

7.1.3 International environmental agreements: Chapter 104