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The document evaluates the impact of NAFTA's environmental side agreement and the North American Commission for Environmental Cooperation (CEC), highlighting successes in data sharing and pollution mitigation alongside failures in the citizen submission process. It concludes by proposing seven options for the NAFTA renegotiations, ranging from maintaining the status quo to integrating modern sustainability standards from agreements like CETA or TPP.

The author contends that NAFTA's original framework treated environmental and labour issues as parallel agreements rather than integral components. While Mexico developed robust environmental legislation and institutions like the Secretariat of Environment and Natural Resources following NAFTA, economic growth has still led to environmental degradation costing 7% of Mexico's annual GDP. The author highlights the investor-state dispute mechanism in Chapter 11 as a critical area for reform, noting it has been used to challenge environmental regulations as de facto expropriations, resulting in $170 million in claims against Canada and $240 million against Mexico. The document suggests that the renegotiation should align the treaty with the 2030 Sustainable Development Goals and empower the Commission for Environmental Cooperation to lead a regional environmental agenda.

The document argues that the renegotiated NAFTA should move beyond the 'soft legal obligations' seen in agreements like CETA and the TPP to establish stronger, enforceable environmental protections. It specifically advocates for the legal recognition that water is not a commodity, the preservation and strengthening of the submissions on enforcement matters (SEM) process for civil society, and the expansion of the Commission for Environmental Cooperation (CEC) to include regulatory cooperation on climate change mitigation and carbon border adjustments.

Scott Vaughan argues that while NAFTA did not cause a widespread 'race to the bottom' in environmental standards, the Commission for Environmental Cooperation (CEC) has lost relevance. He suggests the CEC pivot from the trade-environment debate toward a cooperation agenda focused on North American energy and climate integration, cumulative environmental impact assessments, and the improvement of comparable environmental data.

This briefing examines the evolution and application of the Minimum Standard of Treatment (MST) in international investment law, specifically contrasting traditional customary international law with the broader interpretations adopted by NAFTA tribunals.