A Sustainability Toolkit for Trade Negotiators:

Trade and investment as vehicles for achieving the 2030 Sustainable Development Agenda

2.1 Basic Architecture

The first choice to be made by parties negotiating a RTIA that includes environmental considerations is whether to include the environmental provisions within a side agreement or to structure them as a chapter within the agreement’s text. The substance of those environmental provisions is explored in the next section, and in reality the substance matters much more than the form.

Side agreements may be legally distinct agreements, though closely related to the trade agreement. Chapters in the trade agreement can be environment chapters or sustainable development chapters. Parties may also draft side letters on environmental matters. The various options are explored below. No recommendations are made as to these options; as noted above, the substance of the provisions is more significant than the form of those provisions.

It bears noting that environmental issues are horizontal by nature, and they cannot be clinically isolated or exclusively contained in a side agreement or a RTIA chapter. Environmental side agreements and chapters entail important highlights, often framed in terms of soft law and aspirations, that may influence the interpretation of provisions in other parts of the agreement.

Option 2:An environment chapter or article within the main agreement

An environment chapter within the agreement can deal with trade-related environmental matters such as failure to enforce domestic environmental laws in ways that affect trade, trade-related environmental commitments related to multilateral environmental agreements (MEAs), etc. Being within the agreement allows the potential for such commitments to be enforceable through the main agreement’s dispute settlement provisions, should the parties so desire (see Section 3.8: Dispute settlement).

Option 3:A sustainable development chapter within the main agreement

A sustainable development chapter might house both environmental and labour commitments, as some EU agreements do, or might simply set environmental commitments within a broader context of sustainable development.

Examples

How Commonly Used

Option 4:Side letter on environmental matters

Side letters may set out joint commitments that are difficult to achieve within the context of the agreement, either because there are multiple parties that cannot agree, or because their content is too controversial to form a part of the legally agreed treaty. Their weakness is their uncertain legal character and their non-coverage under dispute settlement provisions of the main agreement. As well, such letters are typically negotiated without the stakeholder consultations and accountability associated with the main agreement. In light of these weaknesses, this is not a recommended option.

Examples

See Canada’s side letters under the TPP, for example.

How Commonly Used

Examples

See the US – Peru FTA’s side letter on Biodiversity and Traditional Knowledge.

How Commonly Used

Examples

See the US –Chile side letter on fisheries subsidies and natural disasters under the TPP.

How Commonly Used

Most of the options above are not mutually exclusive. US-CAFTA-DR has both environmental provisions in the text of the agreement and a side agreement: the Dominican Republic – Central America – United States Environmental Cooperation Agreement. The side agreement is focused on capacity building and cooperation, and the environment chapter is focused on enforcement of environmental laws, compliance and enforcement. CETA has both an environmental chapter and a sustainable development chapter.

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