Environmental Goods Agreement trade talks look to hone product list

24 June 2015

Delegates from 17 WTO members negotiating a tariff-cutting deal on environmental goods completed another reading of a compiled list of over 650 tariff lines and more than 2000 products during a meeting held last week in Geneva, Switzerland, with sources confirming progress in identifying which products have broad support for including in a final deal.

The occasion also reportedly helped identify other products where further discussion is needed. A similar approach will continue for the next session, scheduled for the last week of July, in a bid to provide further clarification on the support for various products.

Andrew Martin, Counsellor at the Australian mission to the WTO who chairs the talks in his personal capacity, will then provide participants in August with a draft list of goods that appear to have garnered the most consensus, trade sources also confirmed.

Participants in the plurilateral Environmental Goods Agreement (EGA) negotiations, as the talks are formally known, each submitted various product nominations in April, which the chair subsequently compiled into a master list.

“We are now entering a key phase of the negotiations. Countries have made their proposals and we are now discussing those proposals between us,” EU Trade Commissioner Cecilia Malmström told stakeholders at conference in early June, ahead of the latest round.

“When we come back in September we will be into the real political process, leading up to the WTO's ministerial conference in Nairobi in December,” she continued, referring to the global trade body’s scheduled high-level meet in the Kenyan capital.

Technical groundwork

Following the format established in an earlier May meeting, where the talks moved more decisively into a negotiating phase, delegates last week continued the process of asking questions and seeking clarity on various product nominations. Similar products were grouped together to help facilitate this effort. 

The format reportedly helped develop delegates’ understanding of the scope of some nominations and gave participants another opportunity to signal support for various products suggested by their negotiating partners. A number of participants, including those that had remained quieter in previous rounds, engaged in indicating product support in the latest session.

Following consent from participants, the chair will provide suggestions in the coming weeks on areas that may require additional focus in the next round in order to help deliver a useful chair’s consensus list in August, sources say. The July round could also see participants dedicate more time to bilateral meetings in an effort to tackle specific issues, with the plenary serving as a key space to report back on progress.

Since May, EGA participants have also worked on clarifying nominations where the same tariff line has been nominated under the World Customs Organization (WCO)’s Harmonised System (HS) subheadings, but with different product descriptions for goods not fully captured in these HS codes. More bilateral efforts are expected in the coming weeks.

In this context, the chair of the talks is also due to circulate a revised compiled list of participants’ nominations to date ahead of the July round, reflecting new proposals as well as any technical clarifications secured in the coming weeks. Several new product nominations were put forward by Switzerland ahead of the latest round. 

Technical work undertaken at this stage, some sources said, would prove critical to enabling political conversations further down the line.

Meanwhile, players such as the EU have also said that it will be critical to secure a deal that is easy to implement by customs authorities, and that input from these stakeholders should regularly feed into the negotiations from September onward.

Building consensus  

While the compiled product list is not publicly available, the nominations cover a range of environmental categories discussed by EGA participants during the early months of talks, including goods related to cleaner and renewable energy, energy efficiency, air pollution control, environmental monitoring and analysis, and solid and hazardous waste management, among others. (See BioRes, 13 May 2015)

EGA participants have also said they plan to build on a list of 54 tariff lines and product descriptions targeted for tariff reductions to five percent or less by the 21-nation Asia-Pacific Economic Cooperation (APEC) alliance by the end of this year.

The APEC list of environmental goods includes several products related to clean energy, such as parts related to solar panels and wind turbines. Some sources indicated that the APEC goods were likely a safe bet for inclusion in the chair’s consensus list. Efforts will likely be made to learn more on where the APEC implementation efforts stand, given that group’s end-2015 target date.

Several bilateral meetings held during the week served as an opportunity to focus on products proving to be more controversial, including in relation to their environmental credibility, sources confirmed.

These products reportedly include goods relating to nuclear power, biofuels, car parts, various chemicals, plastics, as well as those related to waste. Some other commercially sensitive product nominations will also likely be addressed as part of the regular give and take of trade deals. Various sources have pointed to the significant estimated growth potential for several environmental goods sectors in the coming years. 

Some participants also said that the eventual final EGA deal should ideally go well beyond APEC’s 54-product list and, while opinions still vary, one option would be to secure an additional 150-200 products for tariff liberalisation.

Next steps

An ambassador-level meeting held last Friday reportedly resulted in broad consensus on EGA timing and delivery. While many participants remain hesitant on setting strict deadlines, ambassadors from the 17 WTO members agreed that the end of this year will see a confluence of events such as the UN climate talks and tenth WTO ministerial conference, which set an important landscape for the EGA deal.

Several ambassadors are said to have backed an ambitious outcome for goods tariff liberalisation, with some using the opportunity to highlight goods they strongly supported. The EU, for example, reportedly underscored renewable energy, as well as waste and water management, while Norway pushed for keeping an eye on products of interest to developing country members.

While several other WTO members have expressed interest in joining the talks, including some developing nations, no formal applications have been made.

Some sources suggested that while current participants would continue to remain open to countries joining the talks, additional product nominations could become more complex, given hopes to wrap up as much as possible of the tariff line talks by year’s end. 

The EU has also reportedly indicated plans to distribute a version of a draft text for the final deal in time for the next round. The bloc’s 28 member states could discuss and finalise the document early next month to send to other EGA participants by mid-July.

The text could cover the elements of the deal’s framework, including technical aspects for including the EGA liberalisation in WTO members’ tariff schedules – meaning these would be enforceable through the global trade body’s dispute settlement mechanism – along with a review mechanism, as well as how to tackle related questions on environmental services and technical barriers to trade.

ICTSD reporting. 

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