LASER TALK: NAFTA and Carbon Fee and Dividend

On January 1, 1994, the North America Free Trade Agreement (NAFTA) went into effect. Under NAFTA, Canada, USA and Mexico have an obligation to protect the environment.

The North American Agreement on Environmental Cooperation was negotiated and implemented in parallel to NAFTA. It requires that each Party ensures its laws provide for high levels of environmental protection without lowering standards to attract investment. Each Party agreed to effectively enforce its environmental laws through the use of inspectors, monitoring compliance and pursuing the necessary legal means to seek appropriate remedies for violations. Each Party must also provide a report on the state of its environment, develop environmental emergency preparedness measures, promote environmental education, research and development, assess environmental impacts and promote the use of economic instruments.[2]

As well, under NAFTA Article 604: Export Taxes,[3] parties are allowed to maintain duties, taxes or other charge on the export of any energy or basic petrochemical good to the territory of another Party if the duty, tax or other charge applies to the exports of any such good to the territory of all other Parties and any such good when destined for domestic consumption.

Thus, we are confident that Carbon Fee and Dividend would be acceptable under NAFTA rules.





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