1. Introduction
Environmental impact assessment (EIA) is an important tool used in many countries to ensure that proposed activities, measures, and policies incorporate environmental considerations and avoid substantial environmental damage. While rooted in domestic law, EIAs are also regulated by international law. According to the International Court of Justice, ‘it may now be considered a requirement under general international law’ to undertake an EIA where a proposed industrial activity has the potential to cause significant transboundary harm.Footnote 1 Such a customary obligation to conduct EIAs derives, inter alia, from the principle of prevention applicable to any proposed activities – whether industrial or not – that pose significant adverse risks for a transboundary environment.Footnote 2 Some scholars suggest that this customary obligation may extend to the domestic environment outside the transboundary context.Footnote 3 However, unless specified in international rules, the scope and content of EIAs continue to be determined by domestic legislation and procedures.Footnote 4
EIAs are closely connected with the right of states to regulate. Compliance with the EIA requirement under national law may be necessary, for example, for standards of investment treaty protection to apply.Footnote 5 Furthermore, the adoption of domestic regulations can be preceded by impact assessments, including those on the environment, that help in deciding how to regulate to better attain public policy goals.Footnote 6 Such regulatory impact assessments are part of good regulatory practices prescribed by various regional trade agreements (RTAs), signed by both developed and developing countries,Footnote 7 and can provide an evidential framework for examining the legality of measures for which such assessments were conducted.Footnote 8
This article aims to analyze the use of EIAs in trade policies, with a particular focus on the ex ante assessments of trade agreements under negotiation. While not yet globally adopted,Footnote 9 such trade EIAs play an essential role in highlighting potential positive and negative environmental effects for consideration. With the ever-increasing significance of the trade–environment nexus and the extensive proliferation of RTAs,Footnote 10 the importance of trade EIAs will only continue to grow. As a recent example, legal proceedings in the United Kingdom over the alleged failure of the government to properly assess the environmental impacts of the country’s free trade agreement (FTA) with Australia underscore the crucial need for thorough trade EIAs.Footnote 11
The United States (US), Canada, and the European Union (EU) are major trading economies that have been pioneers in systematically conducting trade EIAs for over 20 years. Their practical experience offers valuable insights for other countries seeking to establish or improve trade EIA procedures at home. Against this background, this article examines and compares the relevant practices of these three jurisdictions and concludes that their long-standing expertise could be utilized when making trade EIAs a standard procedure worldwide.
The remainder of this article is organized as follows. Section 2 reviews key international developments related to EIAs, both generally and in the context of trade. Section 3 discusses the US, Canadian, and EU practices, focusing on domestic legal frameworks, analytical and procedural aspects of trade EIAs, and an overall assessment. Section 4 concludes.
2. International Agenda on Environmental Assessments
The EIA tool, first introduced domestically by the US National Environmental Policy Act (1969), has been internationally recognized since the 1972 United Nations (UN) Conference on the Human Environment in Stockholm.Footnote 12 As part of this process, Principle 17 of the Rio Declaration on Environment and Development (Rio Declaration) provides that ‘[e]nvironmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority’.Footnote 13 International environmental law requires that public participation be incorporated into decision making on environmental issues, including EIAs.Footnote 14 As shown below, international rulemaking on EIAs focused initially on specific project activities and subsequently extended to plans, programmes, and policies, with international discussions on the development of EIAs for trade policies concentrated mainly in the 1990s and 2000s.
2.1. Project EIAs and Strategic Environmental Assessments (SEAs)
EIA provisions are scattered across several environmental treaties. For instance, the Convention on Biological Diversity urges parties to establish EIA procedures for proposed projects, programmes, and policies that have potentially significant adverse impacts on biodiversity.Footnote 15 Under the UN Framework Convention on Climate Change, all parties must ‘employ … [national] impact assessments, with a view to minimizing adverse effects on … public health and on the quality of the environment, of projects or measures [related to] climate change’.Footnote 16
The 1991 Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention)Footnote 17 requires the establishment of national EIA procedures for certain proposed economic activities that are ‘likely to cause significant adverse transboundary impact’.Footnote 18 Before a decision on a proposed activity is made, a contracting party concerned must notify and consult with an affected party regarding the potential transboundary impact, possible alternatives to the proposed activity, and mitigation measures.Footnote 19 The public must have an opportunity to participate in EIA procedures, with the public of the affected party being entitled to make comments or objections.Footnote 20 A final decision must take into account the outcomes of the EIA and consultations as well as the comments received.Footnote 21
Under the Espoo Convention, EIAs apply to project-level activities but the parties ‘shall endeavour’ to extend the EIA principles to ‘policies, plans and programmes’.Footnote 22 This is further detailed in the 2003 Protocol on Strategic Environmental Assessment to the Convention on Environmental Impact Assessment in a Transboundary Context (SEA Protocol).Footnote 23
The SEA Protocol regulates the evaluation of anticipated environmental effects of public authorities’ plans and programmes in various sectors,Footnote 24 regardless of whether the effects are transboundary.Footnote 25 It covers those ‘plans and programmes’ that are required by domestic law and prepared/adopted by an authority or prepared by an authority for adoption by a parliament or a government.Footnote 26 The contracting parties ‘shall endeavour’ to ensure that environmental concerns are addressed ‘to the extent appropriate’ in the drafting of their ‘policies’ and ‘legislation’ that are likely to have significant environmental effects.Footnote 27 This action is voluntary, and the SEA Protocol does not define the terms ‘policies’ and ‘legislation’, so national jurisdictions have discretion to apply their SEA rules to trade policies, including trade negotiations and agreements. There must be public participation opportunities, consultations with local environmental authorities, and transboundary consultations for potential cross-border effects.Footnote 28 An environmental report on assessment findings, along with the received comments, must be duly considered in the decision-making process.Footnote 29
Although the Espoo Convention and the SEA Protocol apply to contracting parties, non-parties are free to design their domestic EIA/SEA procedures with the provisions of these treaties and related practices in mind.
The literature has generally been positive about the Espoo Convention and the SEA Protocol while also pointing to their limitations. In particular, the Espoo Convention is considered a source of inspiration for regional and bilateral EIA treaty makingFootnote 30 and a contributor to the development of customary international law on transboundary EIAs.Footnote 31 At the same time, it is said to fall short of adequately addressing ‘global environmental harms’ such as greenhouse gas (GHG) emissions.Footnote 32 The SEA Protocol is praised as something ‘we need’Footnote 33 for promoting ‘good governance’ in strategic planning.Footnote 34 However, it is also criticized for ‘failing to go as far as it could’ in, for instance, not requiring mandatory application to policies and legislation,Footnote 35 which represent a higher level of decision making than plans and programmes.
To conclude, EIAs relate to individual projects while SEAs pertain to public authority plans and programmes and may extend to relevant policies and legislation. Compared to EIAs, SEAs intervene much earlier in the decision-making process, applying to programmatic or policy development stages that set a framework for future projects subject to EIAs and for other actions with an impact on the environment.Footnote 36 EIAs under the Espoo Convention focus on transboundary environmental impacts, but SEAs under the SEA Protocol cover both in-country and transboundary effects. Aimed at providing quality information and evidence for consideration, neither EIAs nor SEAs dictate final binding decisions.Footnote 37 At present, most countries require EIAs under national law,Footnote 38 and an increasing number of developed and developing countries have SEA systems in place.Footnote 39 When EIAs and SEAs coexist within the same jurisdiction, they operate as self-standing and mutually non-substitutable regimes unless provided otherwise.Footnote 40
National authorities are free to apply their SEA rules to their trade policies. As mentioned below, Canada has done so, while the US and the EU have not. However, even when trade EIAs are regulated separately from domestic SEA rules, they remain conceptually closer to SEAs than to project-level EIAs.
2.2. Trade EIAs
In 1993, the Organisation for Economic Co-operation and Development recommended that member governments assess how trade and environmental policies/agreements have an impact on each other early in their development and explore alternative policy options to address related concerns.Footnote 41 In 1994, the UN Commission on Sustainable Development recognized the importance of developing trade EIAs, taking into account sustainability and the special needs and conditions of developing countries.Footnote 42
The 2001 Doha Ministerial Declaration of the World Trade Organization (WTO) took note of its members’ efforts to voluntarily conduct domestic environmental assessments of trade policies and encouraged them to share their expertise and experience.Footnote 43 As a result, WTO members discussed the experiences of mainly the US, Canada, and the EU, which already had operational procedures for trade EIAs.Footnote 44 Some members pointed to the usefulness of the information exchange while others flagged concerns about the analytical part of assessments and constraints faced by developing countries.Footnote 45 These WTO discussions occurred primarily in or around the 2000s and have not progressed much since.Footnote 46
3. US, Canadian, and EU Practices
The US, Canada, and the EU have used ex ante trade EIAs in addition to other applicable assessment instruments related to trade.Footnote 47 As at 1 February 2025, they have published final trade EIA reports for 13,Footnote 48 12,Footnote 49 and 32Footnote 50 agreements, respectively. As discussed below, each of these jurisdictions has established special procedures for trade EIAs. Interestingly, Canada’s trade EIA framework explicitly derives from its SEA rules and even makes references to ‘Strategic Environmental Assessments of trade negotiations’.Footnote 51 This exemplifies the proposition above that SEA rules can extend to trade policies in principle if envisaged in national laws. By contrast, this link to SEAs is not discernible under the EU and US regimes.Footnote 52
3.1. Domestic Legal Framework
In the US, trade EIAs were initially conducted on an ad hoc basis with respect to the North American Free Trade Agreement (NAFTA)Footnote 53 in 1991–92 and 1993,Footnote 54 the Uruguay Round agreements in 1994,Footnote 55 and the proposed Accelerated Tariff Liberalization initiative on forest products in 1999.Footnote 56 Based on this experience, Executive Order 13141 on Environmental Review of Trade Agreements (1999) and the Guidelines for Implementation of Executive Order 13141 (2000) formalized the trade EIA process,Footnote 57 obligating the US government to ‘factor environmental considerations into the development of its trade negotiating objectives’ through relevant assessments.Footnote 58
Like the US, Canadian practice started with the NAFTA and the Uruguay Round. Its Framework for Conducting Environmental Assessments of Trade Negotiations (2001), revised in 2020, built on the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals (1999) and the implementation guidelines.Footnote 59 The government also prepared a handbook for conducting trade EIAs.Footnote 60
The EU has carried out ‘sustainability impact assessments’ for all of its ‘major trade negotiations’ since 1999, beginning with the proposed new WTO round of multilateral negotiations.Footnote 61 Trade sustainability impact assessments are guided by the European Commission’s dedicated handbook, first issued in 2006 and revised in 2016.Footnote 62 These assessments can be linked to Article 21 of the Treaty on European Union (TEU),Footnote 63 which, as read together with Article 207 of the Treaty on the Functioning of the European Union,Footnote 64 is applicable to EU trade policy. Article 21 TEU obliges the EU to act on the international scene under the guidance of the principles of democracy, the rule of law, and the universality of human rights, and to cooperate to ‘preserve and improve the quality of the environment and the sustainable management of global natural resources, in order to ensure sustainable development’. Sustainability impact assessments in trade are considered as ‘one of the Commission’s most important tools to ensure that the principles set out in Article 21 TEU are respected in trade agreements’.Footnote 65
The institutionalization of trade EIAs in the US, Canada, and the EU was a response to growing environmental concerns in the 1990s, which, along with other issues, culminated in the massive anti-globalization protests during the 1999 WTO Ministerial Conference in Seattle (US).Footnote 66 Following the systematic utilization of this assessment instrument in these jurisdictions since then, the academic literature has focused mostly on estimating trade-related environmental impacts rather than comparing different regimes of trade EIAs.Footnote 67 Overall, while proponents underscore the importance of trade EIAs in informing the decision-making process,Footnote 68 critics point out shortcomings such as their ineffectiveness in influencing trade negotiations.Footnote 69
Akin to essential elements of the SEA process,Footnote 70 trade EIAs under the above legal frameworks aim to integrate environmental considerations into trade-related treaty making by assessing risks and opportunities, addressing stakeholder concerns, and facilitating the adoption of appropriate responses.Footnote 71 These steps involve analytical and participatory processes ensuring that trade policymaking is evidence-based, transparent, and accountable to the public.Footnote 72
3.2. Trade EIA as Analytical Work
Scope
Trade EIAs examine mainly multilateral, plurilateral, and FTAs under negotiation,Footnote 73 but not agreements negotiated to resolve trade disputes.Footnote 74 In addition, the US also reviews ‘major new trade liberalization agreements in natural resource sectors’ and may potentially review any other trade agreements not covered by its EIA rules, if this is warranted because of ‘the significance of reasonably foreseeable environmental impacts’.Footnote 75
EIAs serve to verify that trade agreements contribute to sustainable development.Footnote 76 While US and Canadian trade EIAs focus on environmental aspects of sustainable development, the EU cumulatively assesses environmental, economic, and social aspects as well as human rights, which enables identifying trade-offs across these dimensions to attain more balanced negotiating outcomes.Footnote 77 In examining the contents of EU assessments, this article will centre mainly on their environment-related parts.
Trade EIAs must be proportionate to the significance of anticipated environmental impacts and thus, as with SEAs,Footnote 78 give a thorough examination only to significant environmental effects.Footnote 79 The significance here can be determined by considering various features of the impacts, such as their frequency, duration, geographical scope, magnitude, risk level, irreversibility, and cumulativeness.Footnote 80
Geographically, trade EIAs commonly cover impacts on the domestic environment of the assessing jurisdiction as well as global and transboundary impacts affecting that jurisdiction. Under US law, global and transboundary impacts are reviewed if this is deemed to be ‘appropriate and prudent’.Footnote 81 In reality, this was the case for all US trade EIAs that, for this purpose, took into account the distance between the parties, shared borders (if any), public comments, and other pertinent factors.Footnote 82 Unlike the US and Canada, the EU additionally considers impacts on the negotiating partner country and relevant third countries, including Türkiye (as a part of the EU–Türkiye customs union) and least developed countries (in line with the EU’s ‘Trade for All’ strategy).Footnote 83 The EU approach ensures that trade impacts that could be felt even more strongly in a partner or third country than in the EU are not overlooked. This helps EU negotiators to be well informed about sustainability issues not only within but also beyond Europe, securing alignment with European ‘collective preferences’.Footnote 84 For example, the assessment of the EU–Mercosur trade agreement concluded that this agreement was unlikely to exacerbate deforestation in the Mercosur region, provided that existing national forest-preservation policies were reinforced along with the implementation of other recommended measures.Footnote 85 However, despite this conclusion, the EU–Mercosur deal agreed in principle in 2019 was not adopted largely as a result of renewed European concerns over escalating Amazon deforestation following policy changes in Brazil, a Mercosur country, after the trade negotiations.Footnote 86
Assessing environmental effects
Trade EIAs employ both quantitative methods (like economic modelling) and qualitative methods (like case studies). These methods are evolving, and each has its own strengths and weaknesses.Footnote 87 Assessments often begin with how environmental media and resources are likely to be affected by the economic effects of a trade agreement, such as changes in: the overall extent of trade and production (scale effects), the sectoral composition of production (composition or structural effects), the state of technological diffusion (technology effects), and the use of specific goods and services (product effects).Footnote 88 An analysis here normally entails comparisons of projected impacts of the proposed agreement against a baseline scenario, which estimates the conditions that would exist without that agreement.Footnote 89 While providing valuable insights, impact quantifications have inherent limits to their accuracy as they depend heavily on data quality, methodological rigour, and assumptions, and are exposed to uncertainties surrounding trade negotiations.
In addition, EIAs also examine the regulatory effects of an agreement – its implications for domestic policymaking and international obligations with regard to environmental matters. These can include impacts on the state’s ability to control pollution, regulate hazardous wastes and materials, protect wildlife and endangered species, and set standards relating to the environment or health, among other things.Footnote 90
Compiled from information in final trade EIA reports, Table 1 shows variations in environmental coverage. These differences stem from the weight given to an individual environmental factor, resulting, inter alia, from the screening and scoping process that identifies significant issues for EIAs to address.Footnote 91 Reaching absolute consistency across trade EIAs seems unlikely as the relevance and importance of environmental factors depend on each specific trade context.
Frequency of Considering Environmental Factors in Trade EIAs (as at 1 February 2025)
Source: Author’s compilation from final trade EIA reports.
Notes: The numbers in the ‘EIA Jurisdiction’ column indicate the total number of trade agreements covered by final EIA reports (and the European Commission’s position papers for EU agreements). The frequency rates indicate the share of final EIA reports per jurisdiction that considered each environmental factor.
At least two key comparative trends emerge from Table 1. Firstly, biodiversity appeared in all EU reports and was considered far more frequently in the EU and US reports than in those of Canada. Secondly, climate change and water pollution (or use) were among the most frequently reviewed environmental factors in EU and Canadian EIA reports. By contrast, US reports prioritized the protection of wildlife, but they did not examine climate change, which demonstrates the country’s reluctance in the past to address this issue through trade agreements, even when some stakeholders were critical of this stance.Footnote 92
Some environmental topics are quite unique to the assessing jurisdiction. For instance, the issue of the incidental killing of turtles during shrimp fishing and dolphins during tuna fishing appeared in several US EIAs.Footnote 93 This is not surprising given the long history in the US of addressing this marine conservation problem, which was also brought to light in some previous high-profile trade disputes.Footnote 94 Other examples of individualized issues include, inter alia, environment-related interests of Indigenous peoples as important stakeholders in the Canadian EIA process and animal welfare as part of EU trade-related treaty making.Footnote 95
Interestingly, none of the final trade EIA reports reviewed in this article found any potential serious environmental impacts on the assessing jurisdiction.Footnote 96 Overall, the following were among the contributing factors. With regard to economically driven effects, import tariffs in the US, Canada, and the EU were already low in general, so the trade agreement, even in removing them, was not expected to bring about any considerable changes in domestic economic activities. This is because in such circumstances it can reasonably be assumed that the agreement is unlikely to intensify imports significantly (and related production operations) there, as it provides only a limited reduction in trade costs and consequently little incentive to import more.Footnote 97 In addition, export production in the three jurisdictions was typically estimated not to substantially increase (and thus not to put heavy pressure on the domestic environment) following market openings in counterpart countries. Indeed, markets of many developing-country counterparts were not large enough to exert such an increasing effect in the US, Canada, and the EU. This echoes an early argument in the literature regarding the correlation between economic impacts of a trade agreement and the size of its signatory parties.Footnote 98 Moreover, the applied tariffs of developed-country counterparts were already generally low, so their elimination under trade agreements also was unlikely to cause this increasing effect.
As for regulatory effects, US, Canadian, and EU trade agreements with developed-country counterparts using similar environmental standards were not likely to bring about major changes to existing laws and regulations. Furthermore, the three jurisdictions in question had sufficient bargaining power over their developing-country counterparts to negotiate trade agreements that aligned with their own environmental policies. This reflects the academic theory that large economies with significant market size can effectively exert pressure to obtain concessions in trade negotiations when their smaller counterparts seek access to their lucrative markets.Footnote 99 Specifically, because the US, Canada, and the EU have set at the domestical level environmental mandates for their respective trade agreements,Footnote 100 they, as large economies, will strive to include environmental provisions that meet their mandates as part of trade concessions sought from their partners.
3.3. Trade EIA as Participatory Decision-Making Process
EIA procedures
Environmental analyses in the US and Canada are carried out by the trade authorities themselves (US Trade Representative, through the Trade Policy Staff Committee, and Global Affairs Canada, respectively) in consultation with other government entities.Footnote 101 By contrast, sustainability impact assessments in the EU are outsourced by the European Commission, the executive branch of the EU, to qualified external consultants, who are selected through a competitive tendering procedure. Here, an interservice steering group, composed of representatives of interested EU executive services, facilitates coordination between the consultants and the European Commission.Footnote 102 Each of these procedures has its own advantage: the possibility of smoother integration of in-house assessments into decision making in the US and Canada and greater independence of outside assessments from trade officials in the EU.Footnote 103
An EIA process generally commences during the exploratory phase of initiating trade negotiations (for Canadian and US EIAs) or soon after the negotiations have been launched (for EU sustainability impact assessments).Footnote 104 The purpose is to inform negotiators early enough to help them to shape agreements accordingly. While the domestic procedures are not too rigid about timing because of the unpredictability of negotiations,Footnote 105 unreasonable delays may undermine the purpose of EIAs, raising doubts about their relevance and effectiveness. In 2021, for example, the European Ombudsman found that the European Commission’s failure to ensure the finalization of a sustainability impact assessment before the end of the EU–Mercosur trade negotiations constituted ‘maladministration’.Footnote 106 Echoing the Ombudsman’s conclusion, the European Parliament criticized the Commission’s tardiness and underlined the necessity to assess thoroughly the environmental and social impacts of trade agreements before concluding the negotiations.Footnote 107
EIAs typically produce preliminary and final findings. Similar to the SEA process, the preliminary assessment stage selects environmentally significant issues for review in order to optimize the allocation of time and resources. This exercise consists of ‘screening’, which identifies issues with potentially significant environmental impacts, and ‘scoping’, which subsequently determines the specific elements of those issues to be analyzed.Footnote 108 In establishing the EIA scope, evaluators take into account the coverage and nature of the agreement under negotiation, the expected magnitude of environmental impacts, the relevance and importance of selected issues to stakeholders, and other pertinent factors.Footnote 109
Public release of preliminary findings during ongoing negotiations is required in all three jurisdictions as a principle, but the US rules permit the bypassing of this step in the case of a compressed negotiating schedule.Footnote 110 Unlike the US and Canada, where only one type of interim report is issued, the EU publishes inception reports on the assessment methodology and scope as well as interim reports on preliminary findings.Footnote 111
In the final stage, trade EIAs complete and refine preliminary assessments, reflecting feedback from stakeholders and detailing economy-wide and sector-specific findings. Final reports in the US and Canada discuss the outcomes of completed negotiations, highlighting the main contents of the concluded agreement in connection with the environmental issues raised in the preliminary stage. By contrast, final reports in the EU are to be produced before the conclusion of negotiations. This allows the European Commission to issue a position paper that presents its views on the identified impacts and proposed measures and explains how the EIA has or will be used in decision making.
Engagement with stakeholders
Trade EIAs in all three jurisdictions include stakeholder engagement with state and non-state actors through interagency mechanisms and involvement with civil society and the general public. The US and Canadian systems also require consultation with specialized advisory bodies consisting of external participants.Footnote 112
As crucial as the actual analysis of environmental effects, interaction with stakeholders not only keeps them informed but also enables them to provide input during assessments and trade negotiations. To give just one recent example of how active public consultations can be, the Canadian government engaged with over 1,300 stakeholders through almost 1,100 interactions between 2017 and 2019 over the modernization of the NAFTA.Footnote 113
In the US, public views are sought upon public notification of review steps as well as during regular consultations with Congress, advisory committees, and the interested public.Footnote 114 In Canada, consultations involve provincial and territorial governments, Indigenous peoples, the general public, and the Environmental Assessment Advisory Group consisting of expert volunteers from the business sector, academia, and non-governmental organizations (NGOs).Footnote 115 In the EU, consultants preparing sustainability impact assessments must interact with NGOs, businesses, social partners, academia, and national administrations through dedicated websites and other digital channels, interviews, meetings, workshops, surveys, and questionnaires.Footnote 116 Unlike the Canadian and US practices, public outreach to the counterpart country’s stakeholders is commonplace in the EU EIA process,Footnote 117 reflecting its approach to also review external impacts. While US officials did hold occasional meetings with environmental civil society in some of its trading partners,Footnote 118 this is not mandated by the US EIA guidelines.
The process of addressing external comments is as important as collecting them. Responding to them in EIA reports enhances transparency. In general, one can distinguish three noticeable patterns of handling stakeholder input in EIA records.
The first pattern is found in several US reports and one Canadian report, which explain how exactly the received input was taken into account in the analysis and trade negotiations. The reports here typically identify and discuss key concerns and comments related to specific environmental issues, assess the relevance of these issues to the subject agreement where applicable, and illuminate how the agreement or its particular elements can address them.Footnote 119 This pattern is most responsive to stakeholder opinions as it allows one to trace their actual connection with both EIAs and negotiations.
Another pattern – especially observable from Canadian practice – is when records indicate that public comments were indeed addressed in trade EIAs and/or negotiations, but without clarifying how.Footnote 120 Such a lack of specifics regarding how the comments – often specified or summarized in the records – are factored in diminishes the perceived attentiveness of the consultation process in the eyes of the public.
The third pattern – discernible in many EU EIAs – focuses on providing extensive details on particular engagement activities (meetings, surveys, interviews, and the like) but does not sufficiently articulate in final reports (and corresponding position papers of the European Commission) how exactly the received comments on environmental matters were (will be) actually taken into consideration.Footnote 121 This approach appears to put more emphasis on documenting the participatory aspect of the EIA process itself rather than real impacts of stakeholder engagement. The fact that position papers in the EU tend not to elaborate on addressing comments can be explained by the confidentiality of negotiations, which prompts the European Commission to avoid revealing its specific negotiating positions publicly prior to the conclusion of an agreement.Footnote 122 Pursuant to some previous empirical studies, public consultations in the EU seem to influence mainly the design of assessments rather than negotiations on the agreement under review, but they are likely to influence the conduct of subsequent assessments and negotiations.Footnote 123 This points to both the possible immediate limitations and the potential efficacy of outreach actions.
Based on the above patterns, one can single out three components that must be present in EIA records in order to increase the openness and responsiveness of public consultations. The records must provide sufficient information on (i) engagement activities, (ii) the substance of comments, and (iii) how they have been addressed. If elucidation of the third element – which is comparable to that mandated by the SEA ProtocolFootnote 124 – is difficult because of the confidentiality of ongoing negotiations, this could be carried out after concluding the negotiations. Such documentation on the three components can help to ease civil society scepticismFootnote 125 about the effectiveness of the trade EIA process, contributing to what someFootnote 126 have coined the ‘transparent incorporation of participant input’.
Despite efforts, the outreach process is not always productive and may result in passive or no responses.Footnote 127 Stakeholders’ reluctance to comment or participate in public consultations can be attributed to the lack of their expertise, fatigue with multiple rounds of engagements, complexity of surveys and questionnaires, the general perception of the country under review as being environmentally friendly (thus raising no public concerns), the existence of parallel consultations on other agreements, and so on.Footnote 128 Assessing EU practice, some authors suggest that consultations should limit non-trade issues to priority ones, ensuring greater specificity and accountability.Footnote 129
3.4. Addressing Trade EIA Findings
Because agreement on the covered issues requires the participation of all negotiating parties and because these issues often go beyond their national boundaries, the EIA-conducting party cannot maintain full control over trade negotiations. As a result, trade EIAs may have practical limits in influencing the negotiation process.
In response to EIA findings, the authorities typically highlighted market openings for environmental goods and services and the inclusion of environment-related provisions in the respective agreement. In particular, liberalization of ‘green’ trade was portrayed as a way of achieving environmental benefits by stimulating the international dissemination of environmentally sound technologies and sustainable practices.Footnote 130 Environmental chapters in US and Canadian trade agreements as well as trade and sustainable development chapters in EU trade agreements were indicated to be necessary to address environmental risks and regulatory effects while promoting mutual supportiveness of trade and environmental policies.Footnote 131 Specific mention was also made, inter alia, of the inclusion of environmental exceptions, environment-related provisions concerning government procurement, services, energy, and raw materials, as well as monitoring mechanisms for the implementation of the agreement and its environmental impacts.Footnote 132 Such claims are not baseless in principle. Indeed, given that RTAs must comply with the WTO requirement to liberalize substantially all intraregional tradeFootnote 133 and to the extent that main environment-related goods and services are not excluded from free trade, it is reasonable to expect that these agreements will boost green trade. According to empirical literature, environmental provisions in RTAs can reduce ‘dirty’ exports and increase ‘clean’ exports, promote domestic environmental legislation, and limit pollution.Footnote 134
Final EIA reports in the EU should contain proposals for so-called flanking measures, that is ‘[p]olicy measures proposed … to mitigate potential negative impacts or enhance positive ones’.Footnote 135 Such supplementary mitigation or enhancement measures, which are often outside the trade agreement itself, ‘are not restricted to trade policy but can encompass cooperation, social, environmental or development policies’.Footnote 136 Proposed flanking measures addressed, for example, the greening of production, encouragement of civil society engagement, provision of capacity-building assistance for sustainable practices and environmental management, promotion of information exchange on effective policymaking concerning water resources, and so on.Footnote 137
Inspired by the EU approach, Canada’s framework for trade EIAs also adopted the concept of establishing mitigation and enhancement measures for consideration.Footnote 138 Compared to the diversity of flanking measures recommended in EU assessment reports by a differing pool of the commissioned bodies, Canada’s government-prepared reports presented flanking measures in a quite uniform manner, typically concluding in a generic way that the existing domestic policies and programmes were good enough to mitigate or enhance the anticipated environmental impacts of the agreement concerned.Footnote 139
As for the US, ‘[w]here significant regulatory and/or economically driven environmental impacts have been identified’, the US guidelines instruct trade EIAs to analyze mitigation or enhancement options implementable through changes to negotiating positions and environmental policy responses outside the trade agreement.Footnote 140 Thus, unlike the position in the EU and Canada, the US rules require scrutinizing flanking measures only in ecologically remarkable cases. Indeed, as no significant negative environmental impacts were found in practice, no mitigation options were in issue. By contrast, the final US reports explored how to enhance positive impacts (like effective enforcement of environmental laws and promotion of green trade), even if they were not characterized as significant, and mentioned the parallel conclusion of intergovernmental side arrangements on environmental cooperation as a typical enhancement measure.Footnote 141 This tactic of highlighting measures that enhance the expected positive impacts while avoiding mention of mitigation options – where an appraisal of enhancement/mitigation aspects was not required by law in the absence of significant effects – seems to have been employed to underscore the perceived desirability of a trade deal under negotiation.
Mitigation-oriented flanking measures correspond to ‘measures to prevent, reduce or mitigate the adverse effects identified in the environmental report’ in the SEA process.Footnote 142 At the same time, by being complementary in nature, flanking measures are distinct from ‘alternatives’ that are considered in SEAs alongside the measure under review.Footnote 143 It is not typical for trade EIAs to document whether and how alternatives to a proposed initiative under negotiation have been considered before finalizing the decision-making process. In general, trade EIAs appear to proceed on the premise that there is no policy alternative to the trade agreement being negotiated, as assessments continue in parallel with ongoing negotiations. However, EIAs can still weigh alternative negotiating approaches and options,Footnote 144 including various trade liberalization scenarios,Footnote 145 in examining how to attain trade objectives in an environmentally sustainable manner.Footnote 146 This is largely consistent with the SEA practice of allowing for alternatives within the assessed plan, programme, policy or legislation (such as exploring different means of its execution), rather than viewing alternatives solely as substitutes for it.Footnote 147 The SEA Protocol does not define ‘alternatives’, leaving some room for flexible interpretation and implementation.
3.5. Overall Assessment and Outlook
Conceptually close to SEAs that countries may apply voluntarily to trade policies, ex ante trade EIAs can play an important role in enhancing environmentally sound decision making by providing analysis-based and publicly engaged input. However, they are not without limitations attributable to challenges in making accurate assessments, ensuring transparency in the process while preserving the confidentiality of negotiations and adequately responding to public concerns. Additionally, trade EIAs often face constraints in driving trade negotiations towards a particular outcome as they, like SEAs in general, are not intended to dictate final decisions or impose mandatory outcomes. They also cannot always keep up with all developments surrounding negotiations, which are by nature unpredictable and beyond the control of any single party.
Based on the preceding analysis, one can distinguish between the US/Canadian and EU models of trade EIAs. With over two decades of history, these models can offer practical lessons for many interested countries. Yet, like any other evaluation system, none of them are ideal in terms of procedural features or the substance of assessments. They cannot be mechanically copied without being tailored to the specific circumstances of a country contemplating or reforming an EIA process. Interestingly, one study favours the EU model for what it claims are its more rigorous methodology, better identification of impacts and opportunities, and greater influence on trade negotiations. However, focusing on only three EIA-covered agreements, this study, as it says, ‘does not address legitimate criticisms that can be directed at [sustainability impact assessments] in general’, acknowledging that the EU methodology is ‘not a panacea’.Footnote 148 From a broader perspective, the two models in question, in fact, have both pros and cons in at least three respects.
Firstly, the EU way of contracting EIAs to external experts, unaffiliated with trade authorities, enhances independence and objectivity in assessments while enabling better technical expertise. However, it can prolong the process and disconnect from actual negotiations when negotiating positions are not fully shared with the experts on grounds of confidentiality, for instance.Footnote 149 Here, EIA findings should be made available at the right time, before the agreement is concluded, to ensure that they are relevant and can realistically be factored into negotiations. By contrast, the conduct of EIAs by the trade authorities themselves, as in the US and Canada, enables a more direct integration of in-house findings into decision making, avoids many constraints of sharing sensitive information with outside participants, does not require commission payments to external reviewers, and fosters structural and substantive consistency across assessment reports. However, this mode may lead to post-hoc rationalizations of decisions already taken.Footnote 150 Perhaps to avoid possible criticism in this respect, US (and to some extent Canadian) EIAs generally tend to be, as observed above, more specific than EU EIAs in documenting their response to stakeholder comments.
Secondly, EU assessments holistically review multiple effects in support of the interconnectedness of various sustainability factors to seek the most desirable societal outcomes. This integrated approach allows for trade-offs when, say, negative environmental impacts are outweighed by positive economic and social effects. By contrast, such a trade-off is not needed under the US/Canadian model, which focuses on environmental aspects and consequently ends up with less voluminous and less resource-intensive analyses.
Thirdly, the examination of domestic effects within a counterpart and relevant third country is required under the procedures of the EU but not the US and Canada. On the one hand, assessing such impacts, despite some challenges with data availability and measurements, is helpful for those covered countries that are unable to make these assessments on their own. Assessments here may also explore how the trade agreement can assist them in improving their environmental management capacity. On the other hand, these countries may be highly sensitive to being scrutinized by outside officials or experts, as such scrutiny can be perceived as undermining their sovereignty.Footnote 151
While project-related EIAs are applied nearly universally and the ‘trend towards broader application of SEAs is continuing globally’,Footnote 152 trade EIAs are still far from being widely used on a systematic basis even though roughly 97% of RTAs today contain environmental provisionsFootnote 153 and are thus mindful of environmental concerns. Many developing countries lack the expertise in conducting trade EIAs, which necessitates amplified international efforts for spreading the know-how and providing technical support.Footnote 154 In this respect, trade agreements can, and some indeed do, contribute to rectifying this status quo. For example, RTAs (and where applicable, associated environmental side agreements) concluded by each of the US, Canada, and the EU have promoted trade EIAs (and project EIAs or SEAs)Footnote 155 through prescribed bilateral cooperation or knowledge-sharing procedures. Even where the relevant provisions address ex post trade EIAs, they can indirectly enhance ex ante assessment skills as well.
To start with the US, environmental cooperation provisions of most FTAs mandate that the contracting parties, as appropriate, share information about their experiences in assessing and considering environmental effects of trade agreements and policies.Footnote 156 The US–Jordan FTA specifically instructs its joint committee to discuss the review performed by each party of the environmental effects of this agreement,Footnote 157 which is likely to alleviate the concerns of some commenters raised during the US EIA process about the adequacy of Jordan’s environmental review (which was prepared with US technical assistance).Footnote 158 In addition, certain side agreements on environmental cooperation, supplementing FTAs, provide for strengthening the US counterpart’s capacity to conduct trade EIAs.Footnote 159
Under the EU’s trade agreements concerned, the parties committed to exchanging views and information on the sustainability impacts of the respective trade agreement (based on individual or joint assessments)Footnote 160 or trade EIA methodologies and indicators;Footnote 161 or individually or jointly reviewing, monitoring, and assessing the impacts of the implementation of the respective agreement on sustainable development or the environment.Footnote 162
Unlike the US and EU cases, only a few agreements concluded by Canada provide for trade EIAs. In essence, they focus on bilateral cooperation over environmental effects and EIAs of the trade agreement concerned.Footnote 163
Last but not least, ongoing developments in international trade governance regarding greening efforts can and should be leveraged to revive previously stalled WTO discussions on trade EIAs with the aim of promoting the dissemination of trade EIA practices and providing related technical assistance to countries in need. Firstly, momentum can be generated by the recent significant intensification of WTO discussions on trade-related environmental issues, both under existing deliberative proceedings and through newly launched environmental initiatives on trade and environmental sustainability, plastics pollution, and fossil fuel subsidies.Footnote 164 It is noteworthy that as part of this WTO process, the African Group of 40-plus countries has proposed a number of principles to guide trade–environment discussions in a pro-development manner, including the principle that would require ex ante EIAs for ‘measures with a major global trade impact’.Footnote 165 Secondly, since the late 2000s (that is approximately after the period of in-depth WTO discussions on trade EIAs), environmental provisions in RTAs, including those between or among developing countries, have become more diverse, extending beyond mere environmental exceptions.Footnote 166 This may indicate a heightened global environmental awareness, arguably making states more prepared today to engage actively in trade EIAs than before. Overall, the resumption of the discussions in the WTO will enhance the role of this organization in both spreading best greening policymaking practices and addressing RTA issues within the multilateral trade framework.
The WTO could also explore the possibility of arranging EIAs for its trade negotiations, particularly with regard to their global and transboundary effects.Footnote 167 Unlike some previous domestic EIAs of certain WTO negotiations,Footnote 168 the idea here is to contemplate international assessments. In evaluating the impacts on the shared environment, such assessments would apply a transnational perspective to the subject matter and fill the gap for those participating members who lack the capability to conduct EIAs for WTO issues independently. Such an international approach, focusing on global and transboundary impacts, could also help to avoid or minimize potential criticism of intrusion into domestic environmental affairs.
4. Conclusion
Trade EIAs are not just an analytical tool but also a crucial process involving multilayer interactions within the government, between the government and external stakeholders, and, where relevant, between negotiating parties. They provide assurance to policymakers and the public that proposed trade agreements will align with environmental priorities. At the same time, they may be limited in making precise assessments, balancing transparency and confidentiality, fully addressing public concerns, and effectively influencing decision making.
Remarkably, none of the agreements that underwent a full assessment cycle in the US, Canada, and the EU was found to pose serious ecological risks to these assessing jurisdictions, whether from economically driven or regulatory factors, although this does not mean that the agreements had no environmental impact on them. Furthermore, the prospect of expanding green trade made the reviewed trade agreements even necessary for meeting environmental goals. While this underscores the general environmental supportiveness of trade, it does not eliminate the need for future EIAs, as each agreement is unique.
As environmental protection and climate change responses gain importance, trade EIAs must become a routine procedure everywhere, akin to the economic assessments many countries conduct for trade agreements. In this respect, the time-tested experience of the US, Canada, and the EU can provide useful benchmarks for governmental or commissioned assessments of environmental or broader sustainability impacts on the domestic environment and beyond. Global and regional trade regimes should play a greater role as platforms for disseminating expertise and fostering cooperation in this field. With these efforts, wider adoption of trade EIAs and expanded knowledge exchange may further refine and enhance their effectiveness.
Acknowledgements
The author would like to thank the anonymous reviewers of TEL for their constructive and insightful comments.
Funding statement
Not applicable.
Competing interests
The author declares none.
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