Forests & Trade Policy

Page - June 4, 2012
We have a problem: our current trade rules are killing our forests

Multinational corporations are ramping up their exports of timber from endangered forests to supply unsustainable construction bubbles around the world. This not only destroys rainforests –the lungs of the planet – but also puts at risk the indigenous communities that are their stewards.

Unfair pacts like the U.S-Peru and U.S.-Colombia “free trade agreements” (FTAs) make this situation worse. These deals give forestry, oil, gas and mining firms special new rights to acquire and exploit Amazonian lands and to challenge environmental and indigenous protections. 

The U.S.-Peru trade deal was touted as having new terms to crack down on illegal deforestation. Instead, illegal logging is rampant and corporations are using special trade deal rights to challenge environmental policies.


Eliminate the special foreign investor privileges that incentivize deforestation by providing mining, oil, gas and timber firms with special, deregulated access to forests and other sensitive lands.

Ensure that trade deals allow us to condition access to the U.S. market on sustainable forestry practices.

Strengthen and enforce provisions in agreements like the U.S.-Peru deal that at least recognize problems like illegal deforestation and the need to ban endangered species trade.


Educate your community about how unfair trade policy is promoting the destruction of the world’s forests. The special interests want us to be ignorant about how this record. 

Tell President Obama: Either it’s Fair Trade or No Deal! 

Tell Congress to reject unfair trade deals, for instance one now being cooked up with nine Asia-Pacific countries called the Trans-Pacific Partnership trade agreement.

“The FTA will give incentives for further and irreversible destruction of virgin rainforest, which will in turn increase global warming and displace our communities from their home territories… Provisions contained in the Peru FTA are directly incentivizing this massive takeover that is threatening our livelihoods and leading to irreversible destruction of virgin rainforest.For example, the Peru FTA’s Chapter 10 establishes investor rights provisions that would help lock in our government’s destructive anti-indigenous and anti-environment policies. The FTA explicitly gives foreign oil, gas and mining companies the right to skirt Peruvian laws and courts and challenge the Peruvian government in foreign tribunals for changes to their licenses, authorizations, permits and other investment agreements.”


--Alberto Pizango, leader of AIDESEP, a federation representing 350,000 indigenous peoples in the Peruvian Amazon, who was harassed during the Bagua massacre 


Under NAFTA-style trade deals, multinational oil, mining, gas and timber corporations are granted new rights to acquire land and natural resources and operate them under deregulated terms. These pacts also elevate such foreign firms to equal status with the agreements’ signatory governments. This allows them to privately enforce their new privileges by suing signatory governments before World Bank and United Nations tribunals. There, they can demand taxpayer funded-compensation – simply because government environmental, zoning or other policies interfere with the corporations’ future expected profits.  Perhaps unsurprisingly, energy, mining and timber corporations have been amongst the fiercest advocates of these outlandish privileges. 

To date, governments have been ordered to pay out over $675 million to investors in these “investor-state” disputes under U.S. “free trade agreements” (FTAs) and bilateral investment treaties (BITs) – almost 70 percent of this related to oil, mining, gas and other natural resource disputes.  In 2011, these dangerous rules have been extended to Colombia and Panama. This is especially worrying, since miners and palm-oil plantations are a lucrative but very controversial business: the Amazon makes up nearly half of Colombia’s territory. 

Some environmental groups supported improvements in the environmental chapter of the U.S.-Peru FTA, passed in 2007. In particular, the FTA gave the U.S. government the ability to bring cases against Peru for violating certain environmental standards and for not doing enough to combat illegally logged timber.  But such pro-environment enforcement changes were dependent on a future U.S. government taking action, a move that would be highly contingent on other diplomatic concerns, bureaucratic resistance, and having an environment-friendly president. In contrast, the anti-environment investor rights were “self-enforcing.” A U.S. investor would only need to feel that an environmental regulation were undermining its future expected profits in order to launch an investor-state case, without worrying about diplomatic niceties or bureaucratic inertia.

The government would then have to respond. As Rep. Hilda Solís (D-Calif.), now Obama’s labor secretary, said: the Peru FTA will “allow foreign investors to bring suits before tribunals to challenge the government's implementation of natural resource contracts or leases, which have the potential to continue threatening the resources in Peru. For that reason, environmental organizations have expressed significant concerns about this trade agreement even though improvements were made to help stop the flow of illegally logged timber in Peru.”  Indeed, the investment issue was the principal “environmental issue,” despite not being in the “environment” chapter.

After the FTA was approved, Peru’s President Alan García began pushing a set of trade pact-related forestry changes that would have taken some steps to improve governance in the sector, but which would also have eliminated required consultation with indigenous groups before making changes to forestry, mining, or timber policies impacting their lands.  Indigenous groups predictably opposed these moves, calling an indefinite popular mobilization beginning in early April 2009 that led to protesters blockading roads in the town of Bagua.  Police tried to forcibly remove the blockade, culminating in a bloody massacre in June in which 33 civilians and police officers were killed. 

Peru is still not in compliance with its environmental obligations over two years later.  Despite the violence, Peru’s FTA privileges have never been suspended. Also worrying is that Peru’s Amazonian land under concession to U.S. and other oil, gas and mining companies has risen from around 10 percent before trade negotiations started in 2003, to an estimated 70 percent in 2010.

This was not the change that environmentalists and indigenous groups had hoped for