ENVIRONMENT: MEMBERS PROGRESS ON INFORMATION EXCHANGE, STILL STUCK ON EGS

Members recently discussed all aspects of the Doha negotiating mandate on environment. According to sources, participants at the 2-3 May meeting of the special (negotiating) session of the WTO Committee on Trade and Environment (CTE) mainly made progress on ways to facilitate information exchange between multilateral environmental organisations and relevant WTO bodies (Para 31 (ii) of the Doha Declaration). This area of work represents the best bet for agreement on a possible way forward towards text-based negotiations.

While engaging in efforts to clarify their positions, Members did not reach convergence with regard to how to define the relationship between WTO rules and specific trade obligations (STOs) set out in multilateral environmental agreements (Para 31 (i) of the Doha Declaration), nor on the "reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services" (Para 31 (iii) of the Doha Declaration).

With regard to the latter, some (primarily developed) countries want the WTO Membership to agree to a 'list' of specific environmental goods for liberalisation, and submitted a revised list at the meeting. However, many developing countries are sceptical of this approach, since they fear that products of export interest to them may fail to figure in the list.

New Australian proposal on the MEA-WTO Relationship

In order to move discussions forward, Australia made a proposal to draft a report with regard to the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs) (TN/TE/W/72). Australia proposed that the CTE special session recommend ways in which Members could build on conclusions and observations from the discussions at the CTE on the topic, and continue to enhance the mutually supportive relationship between the WTO and MEAs. While most countries welcomed the Australian proposal and a report as delivering on the Para 31 (i) mandate, the EU and Switzerland felt that it did not go far enough to address the substance of the mandate, which they said involved developing principles to clarify the relationship between existing WTO rules and specific trade obligations set out in the MEAs.

Members converge on information exchange, observership

According to trade sources, Members were close to reaching convergence on the Para 31 (ii) mandate at the meeting. They reportedly broadly agreed on the use of a set of indicative questions proposed earlier by the US to determine observership (TN/TE/W/70), as well as on a new submission by Canada and New Zealand developing the issue further (TN/TE/W/71). The latter proposal could, according to one developing country trade source, form the basis of an early draft text on Para 31 (ii).

Canada and New Zealand provided a list of MEAs (contained in TN/TE/S/2) that had participated in CTE information sessions. With respect to the CTE special session, the co-sponsors agreed that UNEP and seven MEA secretariats* that presently have ad-hoc observer status should be granted observership status for the remainder of the Doha negotiations. The proposal recognised that this was not the same as 'permanent observer status.'

Demandeurs submit revised proposal on environmental goods

Canada, the EU, Japan, Korea, New Zealand, Norway, Chinese Taipei, Switzerland and the US (termed the "Friends of Environmental Goods") submitted a joint proposal (JOB (07)/54) featuring a revised list of environmental goods following a review of their previous lists. Hong Kong, China supported the proposal without officially being a co-sponsor.

The revised list set out a reduced set of goods in response to concerns raised by trading partners, and sought to offer the potential for convergence among Members. With their proposal, the proponents hoped to encourage more focussed engagement on products of interest and trigger momentum in the negotiations.

Coined "the potential convergence set" of products by its co-sponsors, the list contains 153 products (including a number of ex-outs, ie specific products identified solely by name rather than by HS code). The number of products on the list is significantly lower than on the previous consolidated list of goods (totalling 465 products). The list groups the various products under the broad environmental categories, with details related to the environmental benefits of each product described in an additional column.

The proposal envisages special and differential treatment (S&DT) mainly in terms of extended liberalisation periods for developing countries. The proposal includes a review mechanism to ensure that the list does not remain static over time.

Members still disagree on fundamental approach to EGS

Developing countries generally felt that the new proposal did not address the crucial issue of the negotiating approach. Many countries, including major players like Brazil and India, said they wanted discussions on whether to adopt a 'list' or 'project-based' approach -- or a compromise solution -- before progressing to discussions on specific products. Reportedly, India is set to submit a new proposal fleshing out issues related to the project approach, including more development elements.

Although the proponents stressed that their list had been significantly cut, many Members felt that the proposal to liberalise items at the six-digit HS level meant the list covered a large number of products. According to one developing country trade delegate, the new proposal further did not clarify how many of the products on the revised list were 'dual-use' items (meaning they could be used for other purposes than solely environmental ones).

The co-sponsors of the EGS submission said they welcomed comments from Members by the next CTE special session, scheduled for 11-13 June. The Chair, Ambassador Toufiq Ali (Bangladesh), promised to engage in informal bilaterals with Members in the meantime and called for Members to work harder on Para 31 (i) and (iii).

*The Basel Convention, the Convention on Biological Diversity, the Convention on International Trade in Endangered Species, the Montreal Protocol on Substances that Deplete the Ozone Layer, the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (PIC), the Stockholm Convention on Persistent Organic Pollutants, and the UN Framework Convention on Climate Change.

ICTSD reporting.