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Environment & Energy Report

‘New NAFTA’ Offers Money for Border Sewage Fixes (1)

Dec. 16, 2019, 11:30 AMUpdated: Dec. 16, 2019, 2:35 PM

Passing the new North American free trade agreement would mean millions of dollars to help upgrade sewage infrastructure on the border, say the agreement’s backers.

But an environmental group and a local organization on the U.S.-Mexico border say it’s not enough.

The implementing text joining the U.S.-Mexico-Canada trade agreement—an updated version of the North American Free Trade Agreement—would authorize a paid-in capital increase of $225 million for the North American Development Bank, the binational entity that helps fund water and energy infrastructure along the U.S.-Mexico border, bringing the total callable capital, or capital not yet paid in by shareholders, to $1.75 billion.

It also would give the green light for $300 million over four years to fund Environmental Protection Agency grants under the Border Water Infrastructure Program, which pays for sewer system upgrades in the region.

“There’s different pots of money to address environmental issues on the border,” said Rep. Henry Cuellar (D-Texas), who represents a district that extends from San Antonio to the border city of Laredo on the Rio Grande. “That helps on water and sewage on both sides of the river.”

Reauthorizing the bank would allow for a doubling of capital for the bank, which can leverage up to $3 billion in investment. Rep. Scott Peters (D-Calif.), who represents San Diego and surrounding areas, said the $300 million could cover “about three-quarters” of the cost needed.

Population Explosion

Peters’ district struggles with Mexican raw sewage contaminating beaches and the Tijuana River. Several San Diego County cities and regional agencies have sued the U.S. Section of the International Boundary and Water Commission over pollution and Clean Water Act violations.

Mexico announced $4.35 million last year to upgrade Tijuana’s wastewater system, including the replacement of a 2.6-mile sewage pipeline. The Baja California state government estimates it could cost up to $330 million to fully address the problem, according to media reports.

The North American Development Bank was created two years after the signing of the 1992 North American Free Trade Agreement to help address water and air pollution problems on the border. In 2015, the U.S. and Mexico agreed to jointly commit $3 billion for a total capital increase, but Congress never authorized the agreement.

The passage of NAFTA led to a population explosion in Mexican border towns, including Nuevo Laredo, as Mexicans sought work in new factories and offices. But the treaty didn’t account for that increase, said Tricia Cortez, executive director of the Rio Grande International Study Center in Laredo, Texas.

At one point, the Mexican city was dumping close to 25 million gallons of raw sewage a day in the Rio Grande, Cortez said. Today it’s closer to 6 million gallons a day.

“These types of measures are long, long overdue,” Cortez said. “There is a great need for more assistance and oversight. Those border cities are much, much larger than ours, populationwise.”

Eddie Garza, a civil engineer and owner of Crane Engineering in Laredo, estimates that Nuevo Laredo alone could need up to $100 million to upgrade its wastewater system.

Mexico has different standards for treating wastewater than the U.S., Cortez added. Infrastructure funding is needed to bring the country’s wastewater plants into compliance, but a realignment of standards is also crucial, she said.

‘Lot of Enthusiasm’ From House Democrats

It’s that lack of enforceable standards, among other concerns, that have aligned several environmental groups against the USMCA.

“We sought specific language to curb air pollution, to curb water pollution, to curb land pollution,” Ben Beachy, director of the Sierra Club’s Living Economy Program, said. “We see an almost categorical failure in Trump’s NAFTA deal to prevent the curbing of pollution in Mexico.”

House Democrats, however, say the changes negotiated between the White House and House Speaker Nancy Pelosi (D-Calif.) reflect tangible improvements to environmental provisions.

Democrats touted the changes they made from the agreement that was signed by the three countries in November 2018. This includes creating an inherent presumption that an environmental violation affects trade; committing the parties to comply with seven global environmental agreements; establishing environment-focused attachés in Mexico; and creating a committee to coordinate environmental efforts across the countries.

“There’s a lot of enthusiasm about how much progress we’ve made on enforceability on labor and environment,” said Rep. Peter Welch (D-Vt.), who didn’t support the 1993 pact but plans to vote for the new agreement.

In the changes to the USMCA, “if there’s a violation of an environmental standard, it’s in violation of the agreement,” Welch said. “The burden is on the party who violated it to show it was, and that completely flips it upside down on both labor and environment.”

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Environment is operated by entities controlled by Michael Bloomberg.

To contact the reporter on this story: Tiffany Stecker in Washington at tstecker@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Renee Schoof at rschoof@bloombergenvironment.com

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