Is NACEC a Model Trade and Environment Institution? Lessons from Mexican Industry

Kevin Gallagher

No 01-08, GDAE Working Papers from GDAE, Tufts University

Abstract: This chapter evaluates the extent to which NACEC serves as a model for more effective trade and environmental institutions by examining the institution's role in abating industrial pollution in Mexico. Despite some notable improvements in levels of industrial pollution, the environmental costs of trade-led economic growth in Mexico have remained high in the post-NAFTA period. NACEC is not playing a significant role in channeling this growth toward sustainable levels of development. However, it wasn't designed to, and should not be evaluated on those terms. Indeed, NACEC was designed with more modest goals that are evaluated in detail throughout this volume. This paper argues that NACEC has a number of the elements of an institution that could facilitate the balance of economic growth and environmental protection. An outline is provided regarding how these elements could developed in the context of other trade agreements such as the proposed Free Trade Area of the Americas (FTAA).

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