L IBERALIZING T RADE IN E NVIRONMENTAL G OODS : W HAT TO INCLUDE ? Karsten Steinfatt Trade and Environment Division, WTO International Technical Workshop.

LIBERALIZING TRADE IN ENVIRONMENTAL GOODS:

WHAT TO INCLUDE?Karsten Steinfatt

Trade and Environment Division, WTO

International Technical Workshop on Measuring Progress in “Greening” the Economy: Policies and Practices

International Technical Workshop on Measuring Progress in “Greening” the Economy: Policies and Practices

15 May 2014

With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on […]

iii) the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.

Doha Ministerial Declaration (2001)

Para

grap

h 31

(iii)

Identification of environmental goods and services

Determination of modalities

Doha Development Agenda: Paragraph 31(iii)

Identifying environmental goods

• Possible parameters:– Categories/activities– End-use characteristics– Contribution to internationally agreed

environmental objectives– Customs workability

Environmental Goods Submitted by Categories(excluding minerals products, motor vehicles and electric appliances)

The end-use criterion

• Goods with environmental end-use characteristics:– Clear and direct environmental end use/benefit– Only to be used in environmental

control/improvement– Contributes to the 3Rs

• Shortcomings:– Dual/multiple uses– Environmentally preferable goods

International instruments

• Agenda 21• Rio Declaration on Environment and

Development• Johannesburg WSSD Plan of Implementation• MDGs• MEAs (e.g., UNFCCC, CBD, Stockholm

Convention on Persistent Organic Pollutants)

Customs “workability”

• HS is not always sufficiently specific– 55% of HS-6 tariff lines submitted by WTO

Members make reference to “ex-outs”

• Differentiation possible according to specific criteria– Examples of past sectoral liberalization

agreements

EG Identification: Challenges

• Constant evolution of technology 50% of existing technologies are expected to be replaced

with new and different goods within 15 years (OECD, 2005);

“One off” exercise?

Review mechanism (proposed by New Zealand and “group of friends”).

?

9 Members: 169 HS6

Japan: 59 HS6

Saudi Arabia: 259 HS6

Philippines: 17 HS6

Qatar: 20 HS6

Singapore: 72 HS6

551

1

1

45

2

8

1

Note: Proportions not respected

3

1

3

5321

20

7

158

3

18

1

1

24

2

EG Identification: Convergence

valves for boilers, gas turbines, (water) gas generators.

1

Environmental Goods Exports(excluding minerals products, motor vehicles and electric appliances)

Methodological issuesAnalysis based on the lists submitted in the CTESS and encompassing 409 different HS-6 tariff lines;

Data sources: COMTRADE and WITS (WTO);

Indicative analysis only:

‒ No consensus on the proposed environmental goods;

‒ Mineral products, (efficient) motor vehicles and (efficient) electric appliances omitted resulting in 348 HS-6 tariff lines;

‒ Trade flows overestimated because most of the 348 HS-6 submitted refer to “ex-out”.

APEC decision on environmental goods

In 2012, APEC leaders endorsed a list of 54 EGs for which APEC economies will reduce applied tariff rates to 5% or less by end 2015, taking into account:

- individual economies’ economic circumstances, and - without prejudice to economies’ positions in the WTO

Categories Number of HS sub-headings

Renewable 15

Environmental Monitoring, Analysis, Assessment Equipment

17

Environmental-protection 21

Environmentally Preferable Products 1Source: ICTSD

Conclusions

• Need for a closer dialogue between data experts and trade negotiators

• Technical assistance and capacity building to customs administrations would enlarge the realm of workable solutions

• Data needs: global value chains in environmental goods, NTBs.