Some (primarily developed) countries want the WTO Membership to agree to a 'list' of specific environmental goods for liberalisation. However, many developing countries in particular are sceptical of this approach, since they fear that products of export interest to them may fail to figure in the list.

Nevertheless, negotiators have spent recent meetings examining the 480-odd products in the potential environmental goods lists put forward by nine Members. These technical discussions have been marked by disagreement between developing and developed countries -- the former argue that a single non-environmental end use should suffice to disqualify a product from consideration for being an 'environmental good'; the latter counter that this would exclude all but a handful of items (see Bridges Trade BioRes, 16 June 2006).

In response to earlier criticisms regarding the issue of dual or multiple-use products, list approach proponents New Zealand (TN/TE/W/49/Rev.2) and Canada (TN/TE/W/50/Rev.1) submitted revised versions of their lists of environmental goods. Both reiterated their view that it would be impractical to exclude all but single end-use products, and instead spoke of the need to consider the 'environmental benefits' of the goods in question. Thus, their revised lists excluded items with no 'direct environmental benefits' such as some chemicals and recyclable material. Each suggested that the move could facilitate progress in the negotiations. Japan, too, submitted a modified informal version of its environmental goods list.

In spite of the revisions, developing countries including Egypt, India, Brazil, and South Africa expressed doubts regarding the environmental use of some of the remaining products, such as lasers, electromagnets, and electricity meters. They also repeated their opposition to the practice of identifying specific products for liberalisation solely by name rather than by HS code, arguing that this so-called 'ex-out' approach would be too complex for their national authorities to implement.

India responds to criticisms of project approach

Developing countries have proposed some alternative methods to liberalising trade in environmental goods. India, for instance, has proposed a 'project approach' that would temporarily liberalise trade in environmental goods and services being used in approved environmental projects (see BRIDGES Trade BioRes, 24 June 2005).

At the recent meeting, India attempted once again to respond to sceptics' claims that the methodology would not lead to liberalisation that was predictable and transparent. Several countries, including the US, argued that it would be incompatible with WTO rules to enable a 'designated national authority' to decide, on the basis of multilaterally agreed criteria and parameters, whether an environmental project should be eligible for market access concessions on goods and services.

As during the previous informal CTE session, India argued that the multilaterally-agreed definitions and criteria for environmental projects would be subject to WTO dispute settlement, and that market access concessions would be bound and extended to all Members for the duration of the project (see BRIDGES Weekly).

The US questioned how dispute settlement would offer additional certainty to importers and exporters, pointing out that bringing a dispute to the WTO takes time and thus would not be compatible with the limited timeframe available to implement a project.

Uruguay floats potential compromise based on MEAs

Uruguay presented an informal 'non-paper' (JOB(06)/144) proposing new parameters for the identification of environmental goods and services. It suggested that they should be based on the broader concept of "environmental activities" -- such as those "activities covered by a multilateral environmental agreement (MEA) and recognised by that MEA through the recognition of the methodologies or the approval of related projects.".

In addition, the country suggested that the production of environmental goods should contribute to improving in an equitable manner the environment and the social and economic development of developing countries. To this end, "environmental activities" could include health, sustainable development, and poverty reduction programmes that aim to mitigate the major causes of environmental degradation, such as poverty.

According to the proposal, all exported goods used in environmental activities would be identified by the CTE as environmental goods for the purpose of expedited trade liberalisation. The WTO and the MEAs would develop agreed international criteria and methodologies to certify that a national project is environmental. A simple declaration by the national authority, as suggested by the 'project approach' would be insufficient. Uruguay stressed that this approach would strengthen cooperation and synergy between the multilateral trading system and the MEAs, and would afford Members the opportunity to export goods and services determined by their own interests, needs and national capabilities.

Several countries welcomed this attempt at compromise between the proponents of the 'list approach' and the supporters of the 'environmental project approach.' Some cautioned that products linked to national environmental activities may not qualify for a list based on globally-applicable MEAs, adding that a number of developing countries are not party to many MEAs. Delegates also questioned how exactly the WTO and the MEAs would develop the 'international certification' of environmental projects that Uruguay was proposing.

Cuba reiterates importance of S&D

Cuba tabled a submission (TN/TE/W/69) stressing the need to address special and differential treatment (S&D) in the negotiations. It called on the CTE to undertake an in-depth analysis of the development dimension of the talks and of potential forms that S&D could take.

The paper also expressed support for the project approach, arguing that it was "best suited to making S&D viable" because it required the environmental objective to be clearly defined. On the contrary, the development dimension would not be guaranteed by the list approach, Cuba argued.

Market access modalities premature?

The US, Canada, the EU, New Zealand, Norway, Singapore and Switzerland reiterated their call for developed countries and developing countries "declaring themselves in a position to do so" to eliminate tariffs on environmental goods by 2008 (TN/MA/W/70; TN/TE/W/65), with other developing countries to subsequently follow suit (see BRIDGES Weekly, 17 May 2006). That paper had suggested that the market access concessions would be based on the environmental goods identified in the CTE-SS.

As before, this prompted protests from a number of developing countries, including Egypt. They described the proposal's consideration of modalities for liberalising trade in environmental goods as premature, since Members had not even agreed on the best way to approach the negotiations, let alone a final list of goods. They also argued that the CTE was not a forum for market access negotiations.

Chair Ambassador Toufiq Ali (Bangladesh) concluded the discussions by saying that there was still "no convergence" on how to achieve the mandate. He added that the technical sessions had helped begin to clarify what might be acceptable to different Members, but that they "still have a long way to go."

The next formal CTE meeting will likely be held in September.

Additional Resources

Submissions to the CTE.

ICTSD reporting.