U.S. Presidential Executive Order 13141 governs the conduct of environmental analyses of trade agreements. The USTR has established guidelines for implementing the provisions of the executive order: Guidelines for Implementation of Executive Order 13141: Environmental Review of Trade Agreements. These documents, and more background (including analyses conducted for the other FTAs) can be found here: USTR Focus on Environment (look under the heading "Environmental Background").
The Federal Register notice announcing the preparation of the environmental review for the Korean-U.S. FTA is here: Notice and request for comments (March 3, 2006). The USTR has prepared an interim environmental report on this FTA: Interim Environmental Review. United States - Korea Free Trade Agreement (December 2006). This early report was produced months before the final agreement was reached on April 1.
This interim review brings up a number of issues:
- Environmental impacts in the U.S. and Korea caused by changes in goods and services production: for example, if auto production is reduced and agricultural production is increased in the U.S. the level and nature of environmental impacts will change. In general, the Review sees these impacts as relatively small, and relatively smaller in the U.S. than in Korea. There is not quantitative, or detailed analysis. Impacts are assumed to be related to the impacts on the two economies, and these will be relatively small in the U.S., relatively larger in Korea.
- Liberalization of trade in environmental goods and services, reducing their cost and increasing options, will be a good thing. The U.S. exported $1.2 billion in environmental goods and services to Korea in 2005. Many of these are subject to high tariffs. Reductions in these tariffs would encourage trade in these goods.
- Goods must be moved over transportation networks. The Review points to the potential for some air and water pollution problems, but thinks these will be small compared to overall impacts in the affected ports.
- Bugs and other nasties hitchhike on ships (in ballast water) and in the packaging and goods themselves. Think zebra mussels in the Great Lakes. The agreement points to increased risks of the transport of invasive species between the two countries as goods trade levels rise. The range of climates in the two countries overlaps, increasing the risk level. Again, the increased risk is seen to be relatively small - because the increase in goods trade between the two countries will be relatively small to the trade already occuring. Moreover, the agreement does not affect U.S. regulatory measures to address invasive species.
- Illegal trade in wildlife and wildlife products: This appears to be a relatively minor problem in trade between the U.S. and Korea. Korea has legislation to deal with illegal trade in wildlife, but the Report says that Korean authorities facing difficulties in controlling the trade. This is more an issue of Korean imports from third parties. Illegal trade in these products between the U.S. and Korea appears to be relatively small. Moreover, tariffs on wild animal and plant imports from Korea are already low, so the agreement is unlikely to make any problem worse. The Report points to an "environmental cooperation mechanism" to be created between the two countries as a tool for improving the situation (see the bulleted point below).
- The Report notes that the agreement may provide an opportunity for better cooperation and information exchange on fisheries by-catch and for better control of illegal, unreported and unregulated fishing. The Report doesn't indicate that these will necessarily be in the final agreement, howoever.
- The Report notes that FTA agreements on sanitary and phyto-sanitary (SPS) measures, technical barriers to trade (TBT) measures, and government procurement and investment regulations can have important environmental impacts. Little useful is said beyond that, but the authors did not yet have access to the agreement.
- The Report notes that potential conflicts between investor rights and the ability of a country to regulate for health, the environment, and safety, are an important issue. The authors don't expect problems, for the U.S., but they don't actually know the details of the agreement either.
- The Report expects that the agreement will produce an "environmental cooperation mechanism" for the two countries. This is a good thing.
The Interim Review notes that South Korea will perform its own environmental review.
A Trade Policy Advisory Committee has focused reviewed the environmental issues in the actual agreement: Report of the Trade and Environment Policy Advisory Committee (April 25).