Environmental Sustainability in Trade: Evaluation of the Potential Industrial Environmental Impacts of the FTAA BRAZIL CASE STUDY Ronaldo Seroa da Motta Instituto de Pesquisa Econômica Aplicada (IPEA) The Dante B. Fascell North South Center UNIVERSITY OF MIAMI i BRAZIL CASE STUDY Environmental Sustainability in Trade: Evaluation of the Potential Industrial Environmental Impacts of the FTAA BRAZIL CASE STUDY ii ENVIRONMENTAL SUSTAINABILITY IN TRADE: EVALUATION OF THE POTENTIAL INDUSTRIAL ENVIRONMENTAL IMPACTS OF THE FTAA iii BRAZIL CASE STUDY Environmental Sustainability in Trade: Evaluation of the Potential Industrial Environmental Impacts of the FTAA BRAZIL CASE STUDY Ronaldo Seroa da Motta Instituto de Pesquisa Econômica Aplicada (IPEA), Rio de Janeiro, Brazil Foro Interamericano de Derecho Ambiental Inter-American Forum on Environmental Law Fórum Interamericano de Direito Ambiental Forum Interaméricain du Droit de L’Environnement The Dante B. Fascell North South Center Tulane Institute for UNIVERSITY OF MIAMI Environmental Law & Policy iv ENVIRONMENTAL SUSTAINABILITY IN TRADE: EVALUATION OF THE POTENTIAL INDUSTRIAL ENVIRONMENTAL IMPACTS OF THE FTAA PROGRAM SERIES EDITORS Robin Rosenberg, Eric Dannenmaier, The Dante B. Fascell North-South Center, Tulane University University of Miami Institute for Environmental Law and Policy Nicolas Lucas, Claudia de Windt, World Resources Institute Organization of American States Inter-American Forum for Environmental Law Bolivia, and operating through a secretariat office in CKNOWLEDGMENTS A the Unit For Sustainable Development and This report is part of a broader capacity building Environment of the OAS General Secretariat. It program on Environmental Sustainability and Trade provides technical support to OAS Member States conducted for Member States of the Organization of based on work plans developed and approved by American States (OAS) by a consortium of the World National Focal Points designated by Member States. Resources Institute, the University of Miami’s North- South Center, Tulane University’s Institute for COPYRIGHT NOTE Environmental Law and Policy, and the Inter-American Forum on Environmental Law of the OAS and has © 2003 North-South Center at the University of Miami been made possible by the generous support of the and the Organization of American States (OAS). United States Agency for International Development, Published by the University of Miami North-South the Charles Stuart Mott Foundation, and the OAS Unit Center. All rights reserved under International and Pan- for Sustainable Development and Environment. American Conventions. No portion of the contents may be reproduced or transmitted in any form, or by any DISCLAIMER means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, The views expressed herein are entirely those of the without prior permission in writing from the publisher author and do not represent the opinions or official and the General Secretariat of the OAS. positions of the Research Institute for Applied Inquiries regarding this publication or other Economics (Instituto de Pesquisa Econômica Aplicada projects of OAS/FIDA should be addressed to the — IPEA), of any of the donors, project partners, the Inter-American Forum on Environmental Law (FIDA), World Resources Institute, the University of Miami’s Unit for Sustainable Development and Environment of North-South Center, Tulane University’s Institute for the Organization of American States (OAS ) at 1889 F Environmental Law and Policy, the Inter-American Street NW, Suite 623, Washington, D.C. 20006, USA. Forum for Environmental Law, the Organization of Call (202) 458-6914 or e-mail [email protected]. This American States, or its Member States. publication and other documents related to the joint OAS/FIDA, North-South Center, Tulane University, MISSION STATEMENTS World Resources Institute project on Trade and the Environment may also be found at the OAS/FIDA web The mission of The Dante B. Fascell North-South site: <www.oas.org/usde/fida.html>. Center is to promote better relations and serve as a catalyst for change among the United States, Canada, November 2003 and the nations of Latin America and the Caribbean by ISBN 1-57454-145-5 advancing knowledge and understanding of the major political, social, economic, and cultural issues affecting Printed in the United States of America the nations and peoples of the Western Hemisphere. The OAS Inter-American Forum for Environmental Law (OAS/FIDA) is a hemispheric network of officials and experts in environmental law and policy established by OAS Member States, following a presidential directive in the 1996 Summit of the Americas for Sustainable Development in Santa Cruz, v BRAZIL CASE STUDY through public/private dialogue, as government PREFACE officials consider alternatives to manage and minimize environmental impacts and to promote his report arises out of a multiyear program of environmental benefits. Constructive dialogue and Tinterdisciplinary and multisectoral research peer review are emphasized in all project ele- and dialogue undertaken by the World Resources ments, so that governments and their counterparts Institute, the University of Miami’s North-South may apply, replicate, and build upon the analytical Center, and Tulane University’s Institute for methodology and manage trade and environment Environmental Law and Policy, together with the issues in their own domestic circumstances. Organization of American States Inter-American Forum on Environmental Law (OAS/FIDA). The program was requested by OAS Member States, ACKNOWLEDGMENTS IN BRAZIL through FIDA National Focal Points, who requested technical assistance and capacity In preparing this report, the author has con- building in the area of trade and the environment. sulted with a wide range of professionals and Working with local partners, such as Dr. decisionmakers from government, private sector, Ronaldo Seroa Da Motta, Coordinator of Studies on academia, and civil society, with views to obtain- Regulation for the Research Institute for Applied ing first-hand information, confirming existing Economics (Instituto de Pesquisa Econômica data and factual findings, and gaining additional Aplicada — IPEA) in Brazil, and in coordination insights and perspectives regarding trade policy with government officials and expert organizations and environmental issues. from the region, the project aims to produce National OAS/FIDA and the author also conducted a Environmental Assessments of the potential impact peer review co-hosted by the Secretariat of Sus- of proposed multilateral trade agreements, such as tainable Development Policy of the Minister of the proposed Free Trade Area of the Americas Environment (Secretaria de Políticas para o (FTAA). Desenvolvimento Sustentável, Ministério do Meio Ambiente) in Brasilia, Brazil, in May 2003. The The program follows two separate and inter- author and the Series Editors especially wish to related paths: acknowledge Dr. Gilney Viana, Secretário, 1. Research and Analysis. Assessing poten- Secretaria de Políticas para o Desenvolvimento tial environmental challenges in the context of Sustentável, and to thank him for his support in increased trade and investment (under Free Trade preparation of this peer review meeting. Agreements (FTAs) and other potential multilat- eral trade commitments such as an FTAA) through Participants included the following: country studies undertaken in collaboration with Conceição E. Abad, Ministério do Meio Ambiente national environmental officials and experts. The Ana Lúcia Aguiar, Ministério do Meio Ambiente methodology centers on identifying high-change Ângela Alano, CTCCA/Secretária Municipal da Pref. sectors with a high potential impact on the envi- Munic. Novo Hamburgo/RS ronment as a means to clarify the most significant Carlos Alberto Albuquerque, ABIA potential environmental consequences of trade- Afrânio Alves, Universidade de Brasília (UNB) related and potential FTA-driven growth. The principal focus of the project is on domestic policy Maria Amélia, CDS-Universidade de Brasília (UNB),UFPA alternatives, although some findings may be relevant to the text of the agreements themselves. Maria Artemísia, OAB/Conselho Federal 2. Dialogue and Capacity Building. Policy Júlio Baena, MDIC/SECEX options are analyzed in the domestic context Raquel Breda, ASIN/ Ministério do Meio Ambiente vi ENVIRONMENTAL SUSTAINABILITY IN TRADE: EVALUATION OF THE POTENTIAL INDUSTRIAL ENVIRONMENTAL IMPACTS OF THE FTAA Rossane C. Carvalho, Universidade de Brasília (UNB) Gisele Teixeira, Gazeta Mercantil Francisco Cortez, Financiadora de Estudos e projetos Isabella Telleskahn, IESB (FINEP) Bruno Veiga, PNEA/ Ministério do Meio Ambiente Darcton Damião, CDS-Universidade de Brasília Gilney Viana, Secretaria de Políticas para o (UNB) Desenvolvimento Sustentável, Ministério do Meio Luisa M.S. Falcão, Ministério do Meio Ambiente Ambiente Afonso Farias, Ministério da Defesa Carlos Young, UFRJ Leonardo Ferreira Lopes, Universidade de Brasília (UNB) Nelson da Franca, Unidade de Desenvolvimento GENERAL ACKNOWLEDGMENTS Sustentavel e Meio Ambiente, OEA Brazil AND PEER REVIEW Leandro Freitas, Universidade de Brasília (UNB) The Series Editors also wish to acknowledge the Roseli M. Freitas, Universidade de Brasília (UNB) following for their editorial and other support in the development and completion of the overall project and Denise Imbrosi, IIQ, Universidade de Brasília (UNB) this report: Raul M. Kuyumjian,