Launch of Environmental Goods Agreement Negotiations

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On July 9, 2014, 14 WTO members launched negotiations of a new Environmental Goods Agreement (EGA) to liberalize trade in environmental goods. Preparations for the launch of the EGA negotiations began in January 2014 when the participants announced the new initiative. It was followed in March by the Administration’s notification of Congress that it intended to enter negotiations of the new trade agreement.

The 14 countries or economies participating in the negotiations are Australia, Canada, China, Costa Rica, the European Union, Hong Kong China, Japan, New Zealand, Norway, Singapore, the Republic of Korea, Switzerland, Chinese Taipei, and the United States. (Korea’s domestic procedures for participating in the negotiations have not yet been completed.) The participating Members account for 86% of global environmental goods trade.

The EGA negotiations will begin with a list of 54 environmental goods on which APEC Leaders had agreed to reduce tariffs to five percent or less by the end of 2015, and will explore the addition of other products.  The Office of the U.S. Trade Representative elaborated on the APEC list, noting that it covers a variety of environmental technologies used in a number of environmental applications. They include:

  • Renewable and clean energy generation (such as solar panels and gas and wind turbines);
  • Wastewater treatment (such as filters and ultraviolet disinfection equipment);
  • Air pollution control (such as soot removers and catalytic converters);
  • Solid and hazardous waste treatment (such as waste incinerators and crushing and sorting machinery); and
  • Environmental monitoring and assessment (such as air and water quality monitors).

In announcing its participation in the negotiations, the European Union noted that after eliminating tariffs or customs duties on green goods, the negotiations could also address non-tariff barriers and environmental services.

The WTO Director-General Roberto Azevêdo welcomed the launch of the plurilateral negotiations, emphasizing the potential positive impact on the WTO. He pointed to the intention of the participants to open the negotiations to any WTO member and to apply the results of the negotiations on a most-favored-nation (MFN) basis. That would mean that all WTO members would benefit from the tariff reductions resulting from the EGA, even if it is only a plurilateral agreement that imposes obligations on a sub-set of WTO members. An agreement that provides benefits to all WTO members should facilitate development of the consensus that will be needed to add a new plurilateral agreement to the stable of WTO agreements.

Jean Heilman Grier

July 14, 2014

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