Environmental Goods Agreement talks review product list

13 May 2015

Negotiations for a planned tariff-cutting deal on environmental goods by a group of 17 WTO members completed a first reading of a compiled product nominations list last week in Geneva, Switzerland, reviewing just over 650 tariff lines and more than 2000 products.

According to trade sources, this sixth round of talks gave delegates the chance to express preliminary support or signal concern over specific nominations, with a view to moving towards consensus on a final list of products for the eventual Environmental Goods Agreement (EGA).

The format of the round, whereby similar products were grouped together, also allowed EGA participants to further clarify with each other the environmental dimensions of some nominations.

Sources confirm that each EGA participant has put forward, or signalled support for, a list of product nominations. These lists – subsequently compiled by Andrew Martin, Counsellor, Permanent Mission of Australia to the WTO, who  chairs the talks in his personal capacity, into a master list – collate various indicative product proposals made during previous rounds, which addressed products related to ten categories of environmental goods, ranging from cleaner and renewable energy to water and wastewater treatment.

Turkey, a newcomer to the talks since the March round, is said to have nominated 143 tariff lines, four of which are not covered by other nominations.

The initial EGA group – including Australia, Canada, China, Costa Rica, the EU, Hong Kong, Japan, Korea, New Zealand, Norway, Singapore, Switzerland, Chinese Taipei, and the US – have been joined this year by Israel, Iceland, and Turkey. Talks formally kicked off in July 2014, building off of an initiative announced earlier that year at the World Economic Forum’s annual meet in Davos. (See BioRes, 10 July 2014)

Negotiating mode

The latest round reportedly marked a distinct shift away from the earlier discussion-oriented talks towards a more concerted negotiating mode.

A core group of products nominated by several EGA participants received broad support during the plenary sessions, officials have confirmed. China and South Korea are said to have informed other participants that they were not yet in a position to support various product nominations due to ongoing domestic consultations but that they hoped these would be completed in time for upcoming rounds.

EGA participants will now engage intersessionally before their next round in June to advance their efforts toward reaching a final, agreed product list. This might include bilateral outreach and efforts to clarify the classification of certain products.

Trade sources report that in certain instances, some EGA participants have nominated the same tariff line under the World Customs Organization’s Harmonised System (HS) subheadings, but with different product descriptions for goods not fully captured in the HS codes – known in trade jargon as “ex-outs” – as well as attached different environmental justifications to these. Delegates have said they will attempt to clear up some of these technical details, including by liaising with their respective customs officials.

A number of bilateral meetings were also held throughout last week, during which some of the more sensitive tariff lines were flagged, sources say. These discussions focused on products related to nuclear energy, biofuels, bicycles, and large scale hydropower.

The EU and the US have reportedly put horizontal reservations on product nominations related to vehicles, with a view to further discussion at a later date. Other EGA participants are said to have nominated products and components related to energy efficient cars.

China reportedly raised the issue of special and differential treatment (S&DT) provisions in relation to its non-paper on the talks’ process, which it circulated following the March round. Beijing has suggested building in certain flexibilities for developing countries that become party to the agreement, such as by including a separate sensitive list for developing members, or allowing them longer staging times for tariff elimination.

The move to include broad horizontal S&DT proposals has been met with some resistance by several participants, trade sources say, although these players may be open to discussing the subject on a more case by case basis.

Other aspects of China’s non-paper, including the need to conduct outreach to other potential developing country participants and maintaining a focus on the environmental credibility of the talks, have received support from some other current EGA participants.

Next steps

The next EGA negotiating round will be held from 15-19 June, followed by another from 27-31 July in Geneva. Subsequent rounds are scheduled from 14-18 September, as well as sessions provisionally slated for October and November.

EGA officials said that the current plan for the next two rounds is to conduct additional detailed readings of the compiled nominations list. Several sources said that the June round could facilitate a more profound and targeted look at some of the product proposals. 

After the July round, the EGA chair could play a role in putting together a revised list for participants’ consideration, according to one suggestion floated last week. The exact manner in which to approach the finalisation of the list, however, has not yet been decided.

Some participants indicated that the EU may come forward with a draft text for the framework of the agreement in subsequent rounds. This draft document could potentially prompt discussion on arrangements for reviewing the list and other substantive modalities.

EGA participants also agreed to hold an outreach session for other WTO members during the June round, given the reported interest of several members in joining the talks. In order to formally join new members must be approved by all current participants.

Officials said last week that they were continuing to aim for the WTO’s Tenth Ministerial Conference (MC10) this December in Nairobi, Kenya as a target for hammering out the key points of the deal.

APEC implementation

At the launch of the talks last July, EGA participants said they would build on a list of 54 tariff lines agreed to by the Asia Pacific Economic Cooperation (APEC) forum in 2012. The 21-country APEC group has made a non-binding commitment to lower applied tariffs on these 54 tariff lines to five percent or less by the end of this year. 

The APEC list, however, also includes some ex-outs that will have to be translated into national tariff schedules. APEC economies are due to submit detailed implementation plans by the end of this month, which trade sources say could help provide some certainty on the APEC commitment’s final contours.

An upcoming meeting of APEC senior officials is scheduled to be held in Boracay, Philippines from 10-21 May, followed by a gathering of APEC trade ministers from 23-24 May. Discussion on progress on the APEC environmental goods agreement is slated to be on the agenda.

The Philippines recently cut tariffs on 51 green goods to five percent, according to recent media reports, with several other APEC economies having also made the necessary tariff adjustments.

ICTSD reporting; “Apec economies to bring down tariffs on ‘green goods’ – DTI,” BUSINESS MIRROR, 7 May 2015. 

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