Keystone lawsuit a wake-up call for NAFTA’s green supporters

On Jan. 6, TransCanada filed a lawsuit alleging that President Barack Obama’s decision in November to reject the Keystone XL pipeline breached Washington’s obligations under the North American Free Trade Agreement (NAFTA). The corporation is seeking $15 billion in damages.

Obama killed the pipeline to demonstrate serious action on climate change. By promoting the continued exploitation of oil sands crude, the Keystone project was a bad bet for the American people. The project was strongly opposed by Native American and rancher groups alike. It offered limited economic benefits compared with its long-term effects on the environment. 

The decision by TransCanada, a Canadian company, has put in an awkward position several environmental groups that were instrumental in securing NAFTA’s passage in 1993. In his triumphant speech after the signing of the treaty, President Bill Clinton thanked the environmental movement, acknowledging its “pivotal” role in gaining congressional approval of the highly contested treaty.

The Democratically controlled Congress passed NAFTA in part because of the support of the Environmental Coalition for NAFTA, which included the Audubon Society, Conservation International, the Environmental Defense Fund, the National Wildlife Federation, the Natural Resources Defense Council, the Nature Conservancy and the World Wildlife Fund. Clinton and Vice President Al Gore managed to coax these big green organizations to support NAFTA despite the stiff opposition of their peers.

NAFTA promised to create one of the world’s biggest free trade zones in order to improve the economic benefits of commerce among the United States, Canada and Mexico. The labor movement and citizens’ groups in the U.S. were against the agreement, saying it would outsource jobs and weaken labor standards and wages. Many other eco-friendly organizations such as Greenpeace, Friends of the Earth and the Sierra Club also rejected the treaty, noting the danger it posed to the integrity of national environmental standards.

NAFTA’s opponents were critical of its controversial investor-state dispute settlement mechanisms (ISDS), which gave investors the right to sue governments. Private interests lobbied successfully for the treaty to work through private courts because national legal systems are open to public scrutiny. Fears over the agreement’s long-term effects have materialized over the last 20 years. Corporations have used the ISDS again and again to undermine citizens’ interests on such matters as environmental regulations, climate change policies, indigenous lands and even national health and mail systems.

Since NAFTA’s inception, close to 80 corporate claims have been lodged against participating governments. Challenges seeking to erode environmental protections outnumber attacks on all other measures. The Keystone pipeline is but one high profile case among many. The Environmental Coalition for NAFTA must now consider its role in this debacle.

In December world leaders finally got their act together and came to a historic accord in Paris to limit the effects of climate change. They now have to make good on those promises and implement national plans to reduce carbon dioxide emissions, promote green energy policies and restructure their industries.

But the accord gave little attention to trade agreements that are already derailing climate change policies and pose a barrier to attempts to stabilize the climate. New trade agreements such as the Trans-Pacific Partnership, which may soon be pushed through Congress, could present even graver threats.

To be clear, trade is an important part of a healthy economy. But it has to be pursued in concert with other societal considerations. Climate change, if unchecked, will wreak untold devastation on communities. Its potential costs to the economy outweigh any short-term gains from unfettered trade. That’s why stringent safeguards that preserve the democratic rights of citizens and countries to determine domestic policies must accompany any trade promotions.

There are concrete ways to embed climate-friendly provisions in trade deals. For example, language protecting national climate actions from legal attacks should be included in trade agreements. In addition, unethical and undemocratic ISDS provisions that favor the interests of corporations over the environment and citizens’ rights should be abolished.

The Environmental Coalition for NAFTA may have been asleep at the wheel two decades ago, but it is time for the group to speak out against trade regimes that threaten our collective future. Climate champions such as Gore must take responsibility for their role and help end the toxic effects of ISDS mechanisms and damaging trade agreements.

Unfortunately, NAFTA’s green supporters show few signs of having learned any lessons. Environmental organizations are once again being hoodwinked by small offerings, ignoring the high stakes involved that carry profound implications. In October, David McCauley, the senior vice president for policy and government affairs at the World Wildlife Fund, praised the Trans-Pacific Partnership for environmental concessions that it may offer in terms of regulating wildlife trade.

Two decades after NAFTA became law, many among the old guard have retired, leaving a new generation of activists working for pro-trade environmental organizations to deal with the moral dilemma they have inherited. The public will be watching their response to NAFTA’s Keystone lawsuit. It’s time for these groups to do the right thing.