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Liberalizing Trade in Environmental Goods : What to include ?

International Technical Workshop on Measuring Progress in “Greening” the Economy: Policies and Practices. Liberalizing Trade in Environmental Goods : What to include ?. Karsten Steinfatt Trade and Environment Division, WTO. 15 May 2014. Doha Development Agenda: Paragraph 31(iii).

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Liberalizing Trade in Environmental Goods : What to include ?

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  1. International Technical Workshop on Measuring Progress in “Greening” the Economy: Policies and Practices Liberalizing Trade in Environmental Goods: What to include? Karsten Steinfatt Trade and Environment Division, WTO 15 May 2014

  2. Doha Development Agenda: Paragraph 31(iii) Doha Ministerial Declaration (2001) Paragraph 31(iii) 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. Identification of environmental goods and services Determination of modalities

  3. Identifying environmental goods • Possible parameters: • Categories/activities • End-use characteristics • Contribution to internationally agreed environmental objectives • Customs workability

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

  5. 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

  6. 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)

  7. 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

  8. 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. EG Identification: Convergence Saudi Arabia: 259 HS6 Qatar: 20 HS6 3 7 1 3 2 4 1 158 9 Members: 169 HS6 21 1 53 2 8 45 1 2 3 1 • valves for boilers, • gas turbines, • (water) gas generators. 1 1 20 55 1 18 Philippines: 17 HS6 Singapore: 72 HS6 Japan: 59 HS6 Note: Proportions not respected

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

  11. Methodological issues • Analysis 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”.

  12. 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 Source: ICTSD

  13. 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.

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