A New Evolution for Fast-Tracking Trade Agreements: Managing Environmental and Labor Standards Through Extraterritorial Regulation

Abstract

The public protests concerning globalization and Congress' refusal to renew fast-track negotiating authority for the President were generated by the same concerns - the environmental and labor welfare implications of free trade. This article addresses the linkage of trade liberalization and environmental and labor concerns. The analysis seeks instruction through understanding the deficiencies of the conventional approaches to managing linkage. Building on this understanding, this article sets forth a new approach to managing linkage through recasting the relationship of congressional oversight and executive fast-track authority to negotiate trade agreements.

The proposal is to include in any regional free trade agreement to which the United States is party, a reciprocal authorization between the state parties, to regulate extraterritorially within the particular free trade regime, companies owned or controlled by the nationals of the regulating state. Pursuant to this proposal, the U.S. Congress would seek to ensure basic levels of protection for the environment and workers in the subject companies. The article explains how this allows revival of the fast-track authority of the Executive, securing its advantages for the negotiation of freer trade, while transforming the current frustration in congressional oversight to effective regulation and preserving the competitiveness of U.S. businesses operating abroad.

Keywords: international trade, regional free trade agreements, fast-track negotiating authority, extraterritorial regulation, environmental protection, labor standards, linkage, North American Free Trade Agreement, side agreements