Trade rules generally discourage laws that distinguish between products based upon how they are manufactured or that use other nonperformance related criteria. Accordingly, the coverage of government procurement under the Free Trade Area of the Americas (FTAA) could threaten numerous laws that use procurement preferences to promote environmental protection and other policy objectives. In the United States, environmental procurement preferences exist at the federal, state, and local levels. For the last twenty-five years, Congress has required federal agencies to purchase products containing the highest percentage of recycled materials practical. In addition, President Clinton has issued an executive order directing federal agencies to purchase “environmentally preferable” and biobased products. Similarly, 48 states and numerous municipalities have environmental procurement preferences.

These laws could be protected by including a broad exception for environmental procurement preferences in the FTAA. The exception should be drafted to apply to procurement measures that are intended to preserve both living and nonliving resources, and should not contain language suggesting that environmental procurement measures should be the least trade restrictive means of achieving the environmental objective. The exception should also explicitly state that governments may use procurement criteria, including criteria based on process and production methods, that address the environmental implications of the products they purchase both within and beyond their territorial jurisdiction.