NAFTA and the Texas/Mexico Border Environment

The North American Free Trade Agreement (NAFTA) was signed in December 1992 and approved by the U.S. Congress in the Fall of 1993. The agreement, which strengthens trade relationships between the United States, Mexico and Canada, was the culmination of more than 3 years of sometimes difficult negotiations between the countries. Part of the public debate surrounding NAFTA centered on the environment, especially the implications of increased U.S./Mexico economic integration for the border environment. To address some of these concerns, NAFTA was accompanied by environmental "side agreements" setting up new binational and trinational agencies to deal with some of the environmental issues.(1) Both the U.S. Environmental Protection Agency (EPA) and the Texas Natural Resource Conservation Commission (TNRCC) have strengthened their border-related operations.

BORDER ISSUES: A HISTORICAL VIEW

In 1965, Mexico initiated the Border Industrialization Program, widely known now as the maquiladora program. Under this program, foreign companies (primarily from the United States and Asia) could construct factories in Mexico and import parts and materials to those factories duty-free. Final products from the factories could then be exported back out of Mexico, with a duty paid only on the "value-added" during manufacture or assembly.(2)

Some maquiladoras were established during the 1970s, but the largest increase came after a 1982 devaluation of the Mexican currency, the peso. By 1991, there were almost 700 maquiladoras located in the Mexican border cities across the Rio Grande, with the largest concentrations being in Juarez (more than 300), Matamoros (94) and Reynosa (82).(3)

While the maquiladora program achieved its purpose of providing jobs for Mexican workers, it also attracted a growing population to the border (See: Population Increases in Texas/Mexico Border Area). In addition, as a developing country, Mexico was not fully equipped to cope with the environmental implications of the rapid industrial development at its northern border.(4)

The environmental and public health implications of rapid population growth and industrial development at the border drew increasing attention during the NAFTA debate. Attention was focused on several issues, including:(5)

• The lack of wastewater treatment and drinking water systems for Mexican border cities and for colonia developments on the Texas side of the border;

• Problems in tracking and accounting for hazardous waste generated at maquiladora plants; and

• Concerns about industrial air and water pollution associated with maquiladora plants and other border industry.

*Mexico is divided into municipal divisions which are generally larger than a city. The districts listed correspond roughly to the area of the 15 counties in Texas designated as the border zone in this study for the Governor of the State of Texas (app. 50 miles in depth).

Source: Office of the Governor of Texas, Interim Final Report on Texas: Mexico Border Needs (Summer 1993).

RECENT DEVELOPMENTS

The increasing awareness of border issues has led both the Environmental Protection Agency and the Texas Natural Resource Conservation Commission to strengthen their border programs. For example, in early 1992, the EPA and the Mexican federal environmental agency released their "Integrated Border Environmental Plan" after a series of public hearings on both sides of the border.(6) More recently, the EPA has established an office in El Paso, Texas to help coordinate its border-related efforts and the U.S. and Mexico have begun a process to update the 1992 plan by developing the "Border 2000" plan as a guide for their efforts to clean up border pollution over the next few years.

In 1993, the Texas Natural Resource Conservation Commission established an Office of Border Affairs and Environmental Equity. This office coordinates Texas Natural Resource Conservation Commission's efforts to better track hazardous waste movements across the border and to conduct monitoring of air and water quality in the region. It also tracks federal activities with respect to border environmental issues and works with state environmental departments in the four Mexican states that border Texas.

In addition to these federal and state efforts, the NAFTA environmental side agreements established some new institutions which have a role in trying to protect the U.S./Mexico border environment.

The North American Commission for Environmental Cooperation (NACEC) is a trinational organization headed by the environmental ministers of the U.S., Mexico and Canada. Its charge is to examine a variety of North American environmental and trade issues, but one focus will be transboundary environmental management in the U.S./Mexico border region.

The NAFTA side agreements also resulted in the establishment of the Border Environment Cooperation Commission (BECC) and the North American Development Bank (NADBank). Working in tandem, these two new binational institutions will help fund new infrastructure facilities to deal with water supply, wastewater treatment and municipal solid waste needs in the U.S./Mexico border region. When fully-funded, the NADBank will have $450 million capitalization, as well as $2.55 billion in "callable" capital. The bank will be able to make loans, loan guarantees or issue credit enhancements to help local border communities finance environmental infrastructure projects that have been certified by the Border Environmental Cooperation Commission.

NOTES

1. The two side agreements are: (1) the North American Agreement for Environmental Cooperation (signed by the U.S., Mexico and Canada) and (2) the Agreement Establishing the Border Environment Cooperation Commission and the North American Development Bank (signed by the U.S. and Mexico).

2. Environmental Protection Agency, Integrated Environmental Plan for the Mexican-U.S. Border Area (1992-1994) (Washington DC, February 1992), II-8 to II-9 (hereinafter "Border Plan").

3. Border Plan, B-9

4. Border Plan, II-9; U.S. Congress, Office of Technology Assessment, U.S.-Mexico Trade: Pulling Together or Pulling Apart?, ITE-545 (Washington, D.C.; U.S. Government Printing Office, October 1992), 123-130. <

5. Border Plan, Chapter III.

6. Border Plan, supra, n. 2.

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