	Background

Environmental issues have received growing attention in trade liberalization debates as trade agreements have broadened in scope, from primarily involving negotiations to reduce tariffs, to including negotiations on nontariff trade barriers. Congressional interest in addressing environmental concerns in trade agreements has extended to the debate over renewing the President's trade promotion authority (TPA). This authority expired in 1994. The Trade Act of 2002 ( P.L. 107-210 , Title XXI) renews the President's Trade Promotion Authority. The environment-related negotiating objectives and priorities included in the new law are discussed below. They further called for making such actions subject to dispute settlement procedures. Perhaps most notably, the new law states that it is a principal negotiating objective "to ensure that a party to a trade agreement with the United States does not fail to effectively enforce its environmental or labor laws, through a sustained or recurring course of action or inaction, in a manner affecting trade between the United States and that party ... ."
A related objective is to recognize that parties retain the right to exercise discretion with respect to prosecutorial, regulatory and compliance matters and to make decisions regarding the allocation of resources to enforcement with respect to other environmental matters determined to have higher priorities. The Act parallels the U.S.-Jordan FTA and goes beyond NAFTA by calling for the inclusion within the texts of trade agreements of an obligation for parties to enforce their environmental laws. Environmental groups favored adding language in the investment objectives that would direct negotiators to seek provisions in trade agreements to limit expropriation provisions and otherwise protect legitimate environmental measures from challenge by foreign investors. The failure of this and related proposals resulted in reduced support for the Trade Act by some in Congress.
During the past decade, environmental issues have received increased attention in trade liberalization negotiations, and the question of how to address such concerns in trade agreements became a key issue in the debate over renewing the President's trade promotion authority (TPA). Under this authority, Congress agrees to consider trade agreements using expedited procedures and to vote up or down, with no amendments.
With the Trade Act of 2002 (P.L. 107-210), Congress renewed the President's trade promotion authority. The Act includes more environment-related provisions than previous TPA legislation, and generally follows language contained in the North American Free Trade Agreement (NAFTA), its environmental side agreement, and the U.S.-Jordan Free Trade Agreement. The Act includes negotiating objectives that call for negotiators to ensure that parties do not fail to effectively enforce their environmental laws in a manner affecting trade, and to make such failures subject to dispute settlement. Another objective seeks language in trade agreements committing parties not to weaken environmental laws to attract trade. The Act also calls for greater openness in proceedings related to trade disputes. It does not include an objective to protect environmental measures from challenge by foreign investors, and consequently, the Act lost some support in Congress and from environmental groups. This report discusses the environment-related provisions of the new law. It will be updated as events warrant.