Environmental Tariffs



WASHINGTON — Washington. - Twenty-eight furniture makers have fled Los Angeles for Mexico over the last three years, and, according to the General Accounting Office, the great majority of them cited Los Angeles' stringent environmental regulations as a major reason for the move. Mexico, the report noted, has not even established pollution standards for the paints and solvents the furniture makers use.

The furniture makers are not alone. An estimated 1,500 companies have sited plants in Mexican border regions since 1965. And the exodus of manufacturing plants to Mexico's less-strict regulatory environment has already had significant consequences for those living north of the border.

Beaches in San Diego are frequently closed as a result of pollution drifting up from Mexico. Ground-water supplies along the border in Texas, Arizona and California have been depleted, and many of the underground aquifers that are not yet depleted are showing increasing levels of pollution. Toxic wastes have been dumped across the border, and smog has drifted northward as far as the Grand Canyon. Industrial wastes and untreated sewage flowing into Nogales, Arizona, from Mexico have been blamed for hepatitis rates 20 times the national average.

If the free-trade pact currently being negotiated by the United States and Mexico is passed, environmental groups have warned, the problems could get much, much worse. President Bush has taken the problems seriously enough that he promised in a May 1 report to legislators that he would not accept a pact that involved lower environmental standards than those in U.S. law, and that he would pursue parallel talks to address Mexico's environmental problems.

Environmental groups are divided on Mr. Bush's promise. Some hailed it, but others are skeptical about both the promise and the Mexican government's ability to deliver on it.

The main problem with Mr. Bush's assurances, says Andrew Reding of the World Policy Institute, is that the Mexican government can't be trusted. ''Nominally, Mexico has some rather impressive environmental legislation,'' Mr. Reding says. ''In fact, all of that is largely a smokescreen that the Mexican government has no intention of enforcing. The intent is to create an image at home and in the United States.''

He expects Mexicans will introduce new environmental legislation in a bid for the trade pact. ''They will enact legislation happily,'' says Mr. Reding, ''precisely because all such regulations mean nothing.''

Supporters of the pact counter that Mexican President Carlos Salinas de Gortari demonstrated his seriousness about environmental reform in March when he shut down the largest government-owned refinery in Mexico City because of its pollution. Critics note that Mexico City was allowed to become one of the most polluted cities in the world before any such action was taken.

One new idea could satisfy both camps: environmental tariffs. Just as countries now impose ''countervailing'' duties on products from foreign producers that receive subsidies from their governments, duties would be tagged onto products from polluting foreign industries.

''If it was shown that General Motors went to Mexico and produced bumpers at a lower cost because of neglect for the environment, there would be a duty imposed to equalize the costs,'' explains Peter Emerson, a senior economist at the Environmental Defense Fund. The revenues from such a duty, he suggests, could be used for pollution research or to deal with environmental problems in Mexico and the United States.

Legislation that would allow countervailing duties for foreign goods produced under lax environmental standards was introduced last month by Sen. David Boren, D-Okla. Under his bill the duty imposed on a product would be equal to the amount saved by the foreign manufacturer in not having to meet U.S. environmental standards. Half of the revenue from the duty would be used to finance the sale of U.S.-made pollution-control equipment to trade partners, and the other half to finance development of pollution-control technologies.

The plan does have critics. Andrew Reding, though generally supportive, worries that imposition of the duties should not be left to the government. Noting that administrations have used trade sanctions to serve ideological goals in the past, he argues that decisions should be administered by a multilateral agency, and ''not just the U.S. courts and administration.''

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