Environmental Assessment (EAs) of Trade Negotiations
Frequently Asked Questions (FAQ)
Why conduct EAs of trade negotiations?
- Environmental Assessments (EAs) assist Canadian negotiators in the integration of environmental considerations in the negotiating process by providing information on the potential environmental impacts in Canada of a proposed trade agreement.
- EAs of trade negotiations support the Government’s goal of mutually supportive trade and environmental policies by identifying potential positive and negative environmental impacts on the Canadian environment resulting from a proposed trade agreement.
- EAs of trade negotiations are a tool to respond to public concerns about the potential environmental impacts of trade. Communications and consultation are integral to our EAs of trade negotiations requiring both interdepartmental coordination and external consultations.
- EAs of trade negotiations support the Government of Canada’s commitment to sustainable development as they examine both economic and environmental implications of trade negotiations.
What guides the environmental assessment of trade negotiations?
- EAs are guided by the Cabinet Directive on the Environmental Assessment of Policy, Plan, and Program Proposals (updated in 2010)and the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations.
- A detailed handbook was developed to provide more pragmatic guidance for those that are conducting EAs of trade negotiations. This handbook was updated in 2008, and continues to evolve as we learn from experience.
- These documents are available on the Foreign Affairs, Trade and Development Canada’s Environmental Assessments web site.
What are the objectives of the Department of Foreign Affairs Trade and Development’s Framework for Conducting Environmental Assessments of Trade Negotiations?
- The 2001 Framework for Conducting Environmental Assessments of Trade Negotiationshas two objectives:
- First, it helps trade negotiators integrate environmental considerations into the negotiating process by calling for the identification of potential positive and negative environmental impacts of trade negotiations.
- Second, it provides a means to address public concerns about the environmental effects of trade negotiations by documenting how the environment is considered during negotiations.
- Overall, the EA contributes to ensuring greater coherence between trade and environment policies.
What trade negotiations are subject to EAs?
- Multilateral trade agreements, such as the WTO Information Technology Agreement
- Bilateral trade agreements, such as the Canada - Korea Free Trade Agreement
- Regional trade agreements, such as the Canada - Trans-Pacific Partnership Negotiations
- Foreign Investment Protection and Promotion Agreements (FIPAs)
As the objectives of FIPAs differ from that of trade negotiations, the EA process for FIPAs differs slightly as well. FIPAs are subject to a preliminary scan that determines whether projected impacts on the environment are likely. If so, the environmental assessment process for trade negotiations is carried out. If impacts are found to be unlikely, the analysis will be considered complete and additional assessments will not be undertaken.
Who conducts the Government of Canada’s EAs of trade negotiations?
- An interdepartmental committee is established for the EA of each trade negotiation.
- The EA Committees are led by the Department leading the negotiations. They are chaired by the Chief Negotiator and they include trade negotiators for each of the negotiating issues being examined. They also include mandatory representation from Environment Canada, the Canadian Environmental Assessment Agency, and Foreign Affairs, Trade and Development Canada. Other government departments and agencies are welcome to participate.
- In-house assessment of trade negotiations is in keeping with the principle of self-assessment in the Cabinet Directive on the Environmental Assessment of Policy, Plan, and Program Proposals. Foreign Affairs, Trade and Development Canada officials are responsible for carrying out and reporting on findings. However, the analysis undertaken by government officials is reinforced through consultations with provinces and territories, the Environmental Assessment Advisory Group, and the general public. See question 19 for more details on consultations.
What are the key steps in the EA process?
- The 2001 Framework for Conducting EAs of Trade Negotiations provides for three increasing detailed phases of assessment: the Initial, Draft, and Final EA. These correspond to progress within the negotiations. A public report is issued at the conclusion of each applicable phase. It should be noted that a Draft EA is not required if the Initial EA finds little likelihood of significant environmental impacts as a result of the intended negotiations. To date, no Draft EA reports have been conducted.Â Â Â
- Consultations are a key element of each phase of assessment. Provinces and Territories, and experts from academia, NGOs, and industry are asked for feedback on draft versions of EA reports.
- Upon conclusion of these consultations, EA reports are finalized and released on the Foreign Affairs, Trade and Development Canada’s “Environmental Assessments” web site.
- Members of the public are invited to provide comments. These comments help inform the next phase of the analysis and future EA of trade work.
What negotiations are assessed?
- The Framework was developed with the intention that it be flexible while requiring a consistent methodology.
- The Framework is applied to negotiations for bilateral, regional and multilateral trade negotiations. It is not applied to negotiations to resolve trade disputes or to previously signed agreements.How are EAs of trade negotiations different from environmental impact assessments?
- EAs of trade negotiations are Strategic Environmental Assessments (SEAs) as per the Cabinet Directive on the Environmental Assessment of Policy, Plan, and Program Proposals - not project level environmental impact assessments. A strategic environmental assessment focuses on the environmental implications of a policy before it is implemented. Conversely, an environmental impact assessment examines the potential environmental impact of a project.
What methodology is used for assessing the environmental impacts of trade negotiations?
- The environmental assessment process begins during the early phases of negotiations. This approach is in keeping with the principle that strategic environmental assessment should inform decision making.
- During each phase of assessment (Initial, Draft or Final EA), a consistent four-step methodology is applied:
- Identification of the economic effects of the negotiation
- Identification of the likely environmental impacts of such changes
- Assessment of the significance of the likely environmental impacts
- Identification of enhancement/mitigation options to inform the negotiations Â
- During the first step, five different types of economic effects are considered. This includes scale effects (i.e., the change in overall amount of production and consumption), structural effects (i.e., shifts in production and consumption toward different sectors in the economy), product effects (i.e., changes in the types of products that are produced or consumed), technology effects (i.e., changes in potential technologies used as a result of the negotiation), and regulatory effects (e.g., impacts on current and future policy development and implementation).
- The analysis will include quantitative and qualitative techniques when appropriate.
What are the key challenges for assessing the environmental impacts of trade negotiations?
- Assessment of the potential environmental impacts of trade is still a relatively new field, and work continues to improve the practice.
- Finding data to estimate the economic and environmental effects of a potential outcome of a negotiation continues to be a challenge. Quantitative data and models are used where possible; however the process continues to rely largely on qualitative information.
- A three-phase approach is applied that advances based on progress in the negotiations. It can be difficult to determine the best time to conduct each phase of assessment, especially when negotiations move slowly or progress occurs at differing speeds in the various negotiating areas.
- It can be difficult to establish that incremental economic effects are solely attributable to a specific trade negotiation, existing trade agreements, or from other circumstances.
- Trade negotiations are expanding into issue areas beyond market access liberalization, such as regulatory cooperation and trade facilitations. Methodologies to assess the environmental impacts of these negotiations are in their infancy.
Why not have an independent body conduct the environmental assessment of trade negotiations?
- The Guidelines for implementing the Government of Canada’s Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, highlight the principle of self-assessment. Self-assessment allows those participating in the trade negotiations to be personally involved in the assessment process. This facilitates informed policy development and decision making. Self-assessment also avoids constraints on the analysis that would result if an external party did not have access to sensitive information.
Does the Government of Canada coordinate its EA of trade process with the countries which it is negotiating trade agreements?
- Environmental Assessment reports are available to the countries with which we negotiate trade agreements through the Department’s public website.Â
- It should be noted that the 2001 Framework for Conducting EAs of Trade Negotiations directs the EA Committee to focus on the environmental impacts of a negotiation on the Canadian environment. Countries with which Canada is negotiating are encouraged to undertake their own EAs based on their preferred methodology.
What is the scope of the various EAs on trade negotiations?
- The scope of the EAs of trade negotiations is guided by the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations.
- EAs focus on environmental impacts within Canada. Transboundary, regional and global environmental impacts are considered if they have a direct impact on the Canadian environment.
- EAs cover issues for which there is a negotiating mandate and focus on where the negotiations are expected to have an economic effect due to expected changes in the scale and structure of economic activity and the products and technology in question. This may vary from one negotiation to another.
- The legal and policy effects of the agreement are also assessed for their environmental implications.
- Finally, mitigation and enhancement options are assessed and assist negotiators in taking the necessary steps to ensure Canada is in line with its sustainable development objectives.
Does the Government of Canada’s approach to EA of trade negotiations assess environmental impacts outside of Canada?
- While many environmental issues could be examined within the greater global context, sovereignty issues, limited data and resources, and practicality limit the focus of the environmental assessment to domestic impacts.
- Transboundary, regional and global environmental impacts are assessed when they directly impact the Canadian environment. This approach is in accordance with the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations.
Does the Government of Canada’s approach to EA of trade negotiations assess social impacts of negotiations?
- EAs are being conducted in accordance with the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations, which is designed to identify and assess environmental impacts in Canada linked to potential trade agreements. However, the analysis carried out to determine the environmental impacts of a negotiation carries with it an inherent consideration of social benefits: a healthy environment contributes to the well-being of its inhabitants.
Do other countries conduct environmental assessments of trade negotiations?
- Canada is not alone in conducting environmental assessments of trade negotiations. Other countries, including the United States and the European Union assess trade negotiations according to their own methodologies.
- Multilateral organizations such as The United Nations Environment Programme (UNEP) and non-governmental organizations (NGOs) also undertake work to assess the potential impacts of trade negotiations.
How does the approach used within the Canadian government compare with the approach others use to assess the impacts of trade negotiations?
- United States
- The United States conducts ex-ante environmental reviews (ERs) of trade agreements, in accordance with Executive Order 13141 and associated guidelines.
- The Office of the United States Trade Representative and the Council on Environmental Quality oversee implementation of the Order in consultation with interested agencies on the Trade Policy Staff committee, the US Environmental Protection Agency and US Agency for International Development.
- The Order is applicable to comprehensive multilateral trade rounds, bilateral or plurilateral free trade agreements, and major new trade liberalization agreements in natural resource sectors. The purpose of the guidelines is to implement the Order so as to ensure that consideration of reasonably foreseeable environmental impacts of trade agreements (both positive and negative), and identification of complementarities between trade and environmental objectives, are consistent and integral parts of the policymaking process.
- For additional information, please see Environmental Reviews of Trade Agreements in the United States.
- European Union
- The European Union conducts ex-ante environmental assessments as part of their Sustainability Impact Assessments (SIAs), which call for the consideration of economic, environmental, and social impacts of trade negotiations, and considers the potential impacts of the negotiations in partner countries as well.
- SIAs are independent studies conducted by external consultants.
- SIAs are applied to the EU’s major multilateral, regional or bilateral trade negotiations and help integrate sustainability into policy.
- For additional information, please see Sustainability Impact Assessments of Trade Negotiations in the European Union.
- North American Commission for Environmental Cooperation (NACEC)
- The North American Agreement on Environmental Cooperation (NAAEC) [Article10(6)(g)], directs the Commission for Environmental Cooperation (CEC), to consider on an ongoing basis the environmental effects of the North American Free Trade Agreement (NAFTA).
- The Analytic Framework for Assessing the Environmental Effects of the North American Free Trade Agreement (NAFTA) provides an ex-post methodology for assessing the effects of NAFTA rule changes, trade flows, investment flows, and institutions on the four major media of the ambient environment. Independent organizations and individuals with funding from the CEC carry out analysis and the findings are reported at public symposiums.
- For additional information, please see NACEC Methodology and the Research Presented at NACEC Symposia on assessing the environmental impacts of trade.
Does the Government of Canada assess trade policies unrelated to a specific negotiation?
- The 2010 Cabinet Directive on Environmental Assessment of Policy, Plans and Programs Proposals, requires that Strategic Environmental Assessments (SEAs) be conducted when a proposal is submitted to an individual Minister or Cabinet for approval and it may result in important environmental effects (either positive or negative).
- Foreign Affairs, Trade and Development Canada has put in place an internal process to ensure that all its Cabinet and ministerial submissions are subject to application of the Cabinet Directive. In keeping with this requirement, the Department applies the SEA process to all proposals considered by the Minister of International Trade via a Memorandum to Cabinet. This process identifies how environmental considerations could be integrated into the proposal to either enhance potential positive environmental impacts, and to mitigate potential negative environmental impacts. It also determines the need for a detailed environmental analysis.
Who is consulted during the EA of a trade negotiation?
- The Framework maintains a strong commitment to external consultations throughout the environmental assessment process.
- When a trade negotiation is announced, a Notice of Intent is published in the Canada Gazette and on the Department’s website. This notice invites interested parties to submit their views on Canadian environmental matters related to the proposed trade negotiation.
- In addition, for each EA report that is published, a draft Environment Assessment report is first shared with the provincial and territorial governments and an Environmental Assessment Advisory Group that consists of individuals from academia, industry and NGOs. This advisory group provides feedback on draft versions of EA reports and provides guidance on the EA process for trade negotiations.
- After these consultations take place, the EA report is finalized and released publicly with a call for comments. Comments received from the public are shared with the interdepartmental EA Committee, negotiators, and inform subsequent EA analyses as well as future EA of trade negotiations work more broadly.
How can the public get involved?
- When a trade negotiation is announced, a Notice of Intent to conduct an EA is published in the Canada Gazette and posted on the Departmental Website. The Notice of Intent invites interested parties to submit their views on the likely and significant environmental impacts of the negotiation in Canada.
- When an EA report is completed at the conclusion of each phase of the EA process, it is posted on the Departmental website and the public is invited to submit comments. These comments inform subsequent EA analyses as well as future EA of trade work more broadly. Updates on trade negotiations and avenues for interested parties to comment more broadly on the negotiations are also provided through the Departmental website. Consultations with stakeholders are an important aspect in the development of Canadian negotiating positions.
How are public comments used?
- Comments received from the public related to the EA of a trade negotiation are circulated to an interdepartmental EA Committee and to the trade negotiators for the given negotiations. These comments inform future work on EAs of trade negotiations. An overview of public comments received, as well as an explanation of how they informed the analysis, may be included in subsequent EA reports. However, they will not be attributed to specific individuals or organizations.
How does an EA of trade negotiations inform Canadian negotiating activities?
- Negotiators for specific issue areas examined in the EA are directly involved in the EA process, and the consultations therein. As such, those involved in the negotiations are aware of the EA findings and the potential environmental impacts of different outcomes in the negotiations. The Chief Negotiator also reviews all EA reports.
- The key findings from an EA can be included in the documents provided to Ministers and Cabinet, e.g. documents reporting on the status of ongoing negotiations or the conclusion of negotiations.
- EAs can help refine Canada’s negotiating positions and identify measures to mitigate anticipated negative environmental impacts.
How are last-minute changes to trade negotiations assessed for their environmental implications?
- The 2001 Framework for Conducting EAs of Trade Negotiationscalls for three phases of increasingly detailed analysis, which proceed based on progress within the negotiations.
- An Initial EA occurs early on in the negotiations.
- A more detailed Draft EA occurs at an advanced stage of the negotiations if the Initial EA identifies the need for further detailed analysis.
- The Framework also calls for a Final EA based on the conclusion of the negotiations which allows for further analysis if changes occur in later stages of the negotiations.
- Final EA Reports identify any notable divergence from the Draft EA and subsequent analysis undertaken due to last-minute changes in negotiations.
- EAs generally provide analysis of the potential environmental impacts of different scenarios that could result from the negotiations. Furthermore, negotiators are made aware of key trade and environment relationships associated with different negotiating areas.
How have the assessments affected negotiations?
- An important way that EAs have affected negotiations is by sensitizing trade negotiators to overall relationships between trade and the environment and how trade negotiations could impact the Canadian environment and promote the mutual supportiveness of both trade and environmental objectives.
- As such, environmental concerns are taken into account when developing Canadian negotiating positions for all trade negotiations.
Are the findings from an environmental assessment considered binding?
- The Framework is informed by the 2010 Cabinet Directive on Environmental Assessment of Policy, Plan and Program Proposals, which does not impose binding responsibilities on the recommendations flowing from a Strategic Environmental Assessment.
- EAs are intended to assist Canadian negotiators integrate environmental considerations into the negotiating process by providing information on the environmental impacts of a proposed trade agreement; and to address public concerns by documenting how environmental factors are being considered in the course of trade negotiations.
How are the environmental considerations reflected in Canada’s pro-trade plan?
- Canada believes that trade liberalization and environmental protection are mutually supportive.
- The mechanisms that are used to consider the environmental impacts of a specific trade agreement will vary based on the agreement and the anticipated environmental effects.
- Within the WTO, trade-related environmental issues are discussed in various committees including the Committee on Trade and Environment.
- Canada also seeks to incorporate robust environmental provisions in our free trade agreements, either as a parallel Environmental Cooperation Agreement in tandem with our free trade agreements, or in an Environment Chapter within the trade agreement itself.
- Policies and programs are implemented by various government departments to facilitate environmental protection and management in Canada, including with respect to the impacts of trade.
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