APEC Trade Ministers Aim for Green Goods List by September

11 June 2012

Trade ministers from the 21 Asia-Pacific Economic Cooperation (APEC) countries hope to have a list of environmental goods for tariff liberalisation by September, officials announced after meeting in Kazan, Russia last week. The two-day gathering also saw ministers address issues such as food security and trade facilitation, while continuing discussions on liberalising trade in services and information technology products in the WTO context.

Last November, APEC leaders adopted the Honolulu Declaration, in which they outlined plans to develop a list of environmental goods that “directly and positively contribute to our green growth and sustainable development objectives” (see Bridges Trade BioRes, 14 November 2011).

Leaders had pledged to reduce by the end of 2015 the applied tariff rates on such products to five percent or less and to draw up a list of goods subject to these tariff cuts in 2012. While the Honolulu text includes references to environmental services, specifically with regard to other trade concerns related to local content and government procurement, currently only goods are set to be liberalised.

China cautious

At the 4-5 June trade ministers’ meet, officials agreed to push for a list of environmental goods to be ready in time for the annual APEC Leaders’ Meeting in September. Several ministers attending the meeting expressed satisfaction that convergence on environmental goods was emerging. China, however, remained cautious.

While Chinese Commerce Minister Chen Deming expressed support for EGS trade liberalisation in principle, he reiterated some of Beijing’s concerns regarding the economic differences among APEC members and the particularity and complexity of environmental goods and services (EGS).

With this in mind, he said that economies should first discuss and set the standards for this liberalisation and aim to reach consensus by the end of 2012, while also avoiding broadening the definition of EGS. Chen also stressed that economies should adhere to the principle of common but differentiated responsibilities (CBDR), and that the liberalisation should indeed embody the principle of voluntarism.

At this stage in the discussions, the US has reportedly proposed cutting tariffs on solar panels, water and wind turbines, water treatment pumps, waste incinerators, deep discharge batteries, and other products. Thirteen other APEC economies have also submitted environmental goods lists of their own, though China has yet to do so, a USTR spokeswoman told Reuters.

Related to APEC’s EGS agenda, ministers also acknowledged in their declaration a discussion of local content requirements and the facilitation of trade in renewable and clean energy products, and encouraged information exchange on standards and efforts toward ensuring a more sustainable transport sector, among other topics.

The officials added that they aimed “to ensure that measures taken for environmental purposes should be least trade restrictive and should be consistent with our international obligations.”

Trade facilitation, supply chains

The subject of trade facilitation resurfaced at the APEC trade ministers’ meet. The issue has gained increased prominence at the WTO in recent months, as members evaluate whether a trade facilitation pact might be a possible deliverable in the absence of overall progress in the Doha Round of talks.

Officials in Kazan pledged to “promote broader integration, and trade and investment liberalisation and facilitation in the APEC region.” The ministers also vowed to support “further discussions of relevant issues [relating to global supply chains] including policy recommendations for trade facilitation.”

WTO Director-General Pascal Lamy, who attended the meeting, emphasised the importance of the regional group in the global trade arena.

“May I suggest that APEC, as a group, is in a good position to contribute to a compromise on trade facilitation [in the Doha talks],” Lamy said.

Chinese Commerce Minister Chen cautioned that, while China is interested in trade facilitation being one of the early results of the Doha talks, it should not be the only result. Emerging economies, such as India and Brazil, have repeatedly argued against de-linking trade facilitation from other aspects of the Doha Round.

Development issues, especially those pertaining to the WTO’s least developed country (LDC) members, must also be emphasised, Chen said. The Chinese minister also added that the trade facilitation negotiations need to address the issues of technical assistance and capacity-building - a long-standing concern of developing countries, particularly LDCs, in the talks.

Food security

The role of agricultural trade in achieving food security also featured at the two-day gathering, with ministers in their statement noting the “crucial importance of encouraging science-based standards, rejecting protectionism, and encouraging the development of regionally integrated markets,” echoing language used by APEC ministers focusing on food security, who met late last week.

Notably, however, the APEC ministers responsible for food security also referred to the controversial subject of food export restrictions, which was not mentioned in the trade ministers’ statement.

“Recognising that bans and other restrictions on the export of food may cause price volatility, especially for economies that rely on imports of staple products, we reconfirmed the commitments on protectionism made by APEC leaders,” the food security ministers said.

Export restrictions are a particularly sensitive subject for Russia, which holds the APEC presidency this year. Moscow has, in the past few years, imposed export bans on products such as wheat, which have been linked to food price spikes.

Services, Information Technology Agreement

Liberalisation of services trade and expansion of the Information Technology Agreement (ITA) - the 70-plus member WTO agreement dealing with liberalisation of trade in information technology products -  raised most recently by trade ministers meeting in Paris earlier this month, also featured during the Kazan discussions.

Last month, various WTO members - including Canada, Costa Rica, Japan, Malaysia, South Korea, Chinese Taipei, Singapore, and the US - tabled a concept paper for starting informal bilateral and plurilateral consultations on which products to add to the coverage of the ITA, an idea that gained the support of Australia, the EU, Israel, Peru, and New Zealand, among others.

At the APEC gathering, the US reiterated its support for expanding the pact, with US Trade Representative Ron Kirk noting that trade in information technology products is “still an area where high tariffs are keeping some countries out of the global production chain.”

Kirk also repeated his call for an international services agreement, an idea that is currently under discussion among a subset of WTO members and has come under fire by others that worry about the precedent set by adopting a plurilateral approach to negotiations.

No new TPP entrants, yet

Ministers of the nine Trans-Pacific Partnership countries - Australia, Brunei, Chile, Singapore, New Zealand, Malaysia, Peru, the US, and Vietnam - also met on the sidelines of the two-day APEC gathering to discuss the progress of the negotiations for the proposed pact.

As expected, while officials did address the possibility of Canada, Japan, and Mexico joining the negotiations, no decision was made on whether to accept new entrants. The nine current members have been holding consultations with Ottawa, Tokyo, and Mexico City since the three expressed interest in joining the negotiations last November.

Since then, discussions on whether to permit new members have focused on whether doing so will allow the TPP negotiations to be concluded within a short timeframe - particularly given the tentative end-2012 goal set for the talks - and still permit a high-ambition agreement.

While much attention has been focused on the US’ stance on permitting new entrants, officials from the prospective new members have stressed that it is not just a Washington issue.

More information

The 21 members of APEC include Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Chinese Taipei, Thailand, the US, and Vietnam.

ICTSD reporting; “U.S. Hasn’t Decided on Expanding Pacific Talks, Obama Aid Says,” BLOOMBERG, 5 June 2012; “APEC members eye green products list by September,” REUTERS, 5 June 2012.

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