Preferential Trade And Investment Agreements From Recalibration To Reintegration

Similarly, it is not clear that the integration of environmental legislation into the WTO and EPZs actually has positive effects on the environment. According to a survey conducted in OECD countries, one of the main objectives of the „green“ ATPs is to avoid a relaxation of environmental standards which, as a side effect of trade and investment competition, can lead to a downward trend (George, 2014). Overall, the empirical (limited) evidence is rather unsuccessful. Gallagher (2004) notes that the environment in Mexico has deteriorated in terms of soil erosion, solid waste and air and water pollution in cities after joining NAFTA, without establishing a causal link between trade liberalization and environmental degradation. Baghdadi, Martinez-Zarzoso and Zitouna (2013) found a convergence of emission levels and a general reduction for pairs of countries that signed a PTA with environmental provisions. Bastiaens and Postnikov (2014) show that PTAs, including sanctions, improve environmental performance, measured on the basis of the Environmental Performance Index (EPI), 2, as well as PTAs, which rely on environmental cooperation when linked to a strong civil society in partner countries. It could also be imagined that countries that have agreed on environmental standards at the bilateral or regional level are more likely to commit to multilateral environmental agreements. However, much more research is needed to clearly establish the links between trade rules, environmental policy and environmental performance. In the debate that follows, we help fill in the gaps in literature and focus on the use of environmental content in ASPs in emerging TAPs. This chapter follows on from previously published works by the shepherd authors, Brandi, Bruhn and Chi (2017) and parts have been reused here with the permission of the copyright holder. To compare the different agreements, we calculated an additive indicator between 0 and 9, which covers the presence of the nine environmental dimensions in the PTA. The higher the indicator, the larger the dimensions of the respective agreement.3 In the following section, we use this indicator to analyze 48 ASPs signed by China, India, Indonesia, Brazil and Mexico in emerging countries. While Indonesian EDPs are negotiated in a relatively short period of time, they show relatively significant differences in the coverage of environmental issues.

The two most comprehensive agreements in this regard are the bilateral agreement with Japan in 2007 and the ASEAN Free Trade Area concluded in 2010, which cover four environmental dimensions. On the other hand, the ASEAN agreements with Korea, Japan and India cover only two dimensions. All EPZs closed by Indonesia contain an environmental exemption, modelled on Article XX of the GATT, and most PTAs contain cooperation provisions. Compared to North American and European EDPs, none of the Indonesian agreements contained an environmental chapter or provisions for cooperation and participation in environmental issues. This restriction on the inclusion of comprehensive environmental legislation is characteristic not only of Indonesian PTA or ASEAN, but also of other Asian industrialized countries such as Japan (Yanai, 2014). Indonesia is currently negotiating a PTA with the EU and is considering joining the CPTPP. It is therefore likely that Indonesia will be under pressure in the near future to sign more comprehensive environmental provisions. The EU and the US already appear to be promoting „highly standard“ ATPs to set a precedent and shape globalization in their interests, presumably in order to avoid „unfair“ competition and environmental dumping from emerging countries, which can use lower environmental and labour standards to reduce production costs (Steinberg, 1997).

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