For update, see:  Launch of Environmental Goods Agreement Negotiations

A new initiative aimed at free trade in environmental goods will be developed as a plurilateral agreement among  “like-minded” WTO Members.

On January 24, 2014, the United States and 13 other WTO Members launched talks on a plurilateral initiative “to achieve global free trade in environmental goods” by eliminating tariffs.  The U.S. Trade Representative (USTR), Michael Froman, announced the initiative at the World Economic Forum in Davos, Switzerland.  The WTO members that have joined the United States in the new initiative are:  Australia; Canada; China; Costa Rica; the European Union; Hong Kong, China; Japan; Korea; New Zealand; Norway; Singapore; Switzerland; and Chinese Taipei.

The new initiative will build on the October 2013 commitment of the Asia-Pacific Economic Cooperation (APEC) Leaders to reduce tariffs on an APEC List of 54 Environmental Goods by the end of 2015.  But, according to a Joint Statement, the signatories of the new initiative plan to negotiate an agreement that goes beyond the APEC list of goods and that could — in the future — address other barriers to trade in environmental goods and services.  The European Union, one of the signatories, noted that the agreement “will be anchored in the WTO,” be based on the WTO’s most favoured nation principle and “will help advance the Doha mandate on liberalising green goods and services first agreed in the WTO in 2001.”

But, the negotiations under the new initiative are not intended to result in a WTO agreement that requires the support of all WTO members.  Instead it will be a plurilateral agreement, an agreement that would apply only to a narrower group of WTO members.  The signatories indicated in their Joint Statement that the work would be undertaken “with other WTO Members similarly committed to liberalization” and that “an agreement would take effect once a critical mass of WTO Members participates.”  The signatories have not defined what would constitute a “critical mass.”  However, USTR emphasized “the objective of bringing all major traders into the negotiations.”

A new plurilateral agreement on environmental goods would be added to the two plurilateral agreements currently in effect.  The existing WTO plurilateral agreements are:  the Agreement on Government Procurement (GPA), which applies to the procurement of 43 WTO members, and the Agreement on Trade in Civil Aircraft, which has 30 signatories.

Plurilateral agreements are receiving greater consideration in the WTO.  WTO members have expressed increased interest in the use of plurilateral agreements given the difficulties that the WTO has faced in reaching a consensus of all WTO members in the multilateral negotiations launched in Doha in 2001.  At the annual WTO Public Forum, in October 2013, the Washington Trade Daily reported that Froman defended the use of plurilateral agreements as offering a way forward for “like-minded countries” that “can come together to open markets, set high standards and introduce new disciplines for global trade.”

In launching the environmental goods initiative, Froman pointed to the benefits of plurilateral agreements within the WTO.  He stated that:  “This effort among like-minded WTO partners will also help to maintain momentum in Geneva for the kinds of fresh, credible approaches to trade negotiation and results that led to success at [the WTO Ministerial in] Bali last year.”  It was only at the WTO Ministerial in Bali, Indonesia in December 2013 that the WTO finally reached agreement on several elements of the Doha agenda.

With the example of the GPA, the use of plurilateral agreements holds promise as a means of advancing trade interests of like-minded WTO members in areas where achieving a consensus among all WTO members is illusive.

Jean Heilman Grier

January 24, 2014

Reference

Washington Trade Daily, What’s At Stack in Bali – Froman (Oct. 2, 2013).

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