Chapter 22: Race to the Middle: Environmental Politics in the Mercosur Free Trade Agreement
Kathryn Hochstetler One of the most common environmental criticisms of free trade agreements is that they set off a ‘race to the bottom’, with participating countries limiting national environmental protections in order to be more economically competitive with their free trading partners. This is thought to be especially likely for poor countries, whose comparative advantage rests heavily on low labour and regulatory costs. Despite this expectation, the four countries of the Mercosur free trade agreement in South America – Argentina, Brazil, Paraguay and Uruguay – have gradually increased their levels of domestic environmental protections since signing the treaty that formed Mercosur in 1991. At the same time they have refused to add a substantial environmental component to the trade agreement itself. This chapter uses the Mercosur experience to reﬂect further on the relationship between trade and the environment, especially in developing countries. How have the Mercosur free trade negotiations affected regional environmental politics? What factors explain the development of domestic environmental agencies and legislation in the Mercosur countries in the 1990s? Using qualitative process tracing methodology, this chapter argues that the Mercosur negotiations did put downward pressure on environmental regulations in the member countries. At the same time, however, countervailing domestic and international pressures encouraged environmental protection, as did some aspects of Mercosur itself. The net effect was environmental improvement across the region, especially in Argentina, Paraguay and Uruguay, which had lagged behind Brazil on this issue: a ‘race to the middle’. These arguments are developed empirically after brief introductions to...
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