Negotiators make progress on “wish list” in Environmental Goods Agreement trade talks

8 December 2014

Countries involved in negotiating a deal to liberalise trade in select environmental goods are making progress on a possible “wish list” of products, sources confirmed following last week’s third round of talks in Geneva, Switzerland. At the current rate, officials say, these initial technical discussions could pave the way for the launch of full tariff negotiations early next year.

The Environmental Goods Agreement (EGA) negotiations, as the talks are formally known, currently feature some of the world’s largest traders of environmental products in its ranks, including the US, China, and the 28 member states of the EU.

The discussions last week focused on three categories of environmental products and technologies, including those related to water and wastewater treatment; the abatement of noise and vibrations; as well as environmental remediation and clean-up.

 EGA participants have said that they plan to build on a list of 54 environmental goods agreed to by the Asia-Pacific Economic Cooperation (APEC) alliance over two years ago but are also committed to exploring a wide range of additional products. The EGA group currently includes nine participants that are also in APEC.

Under the APEC pact the forum’s 21 economies have pledged to lower applied tariffs on the agreed 54 tariff lines to five percent or less by the end of 2015.

Categories

The nomination of possible EGA products is advancing based on different environmental goods categories, or sectors. The aim of this approach is to ensure that the selection and nomination of products for inclusion in the eventual tariff negotiations will be based on the product's environmental credibility.

Participants have been invited by the chair of the negotiations to put forward products relevant to each category, which are then discussed by the group as a whole, with a view to help determine whether given products merit inclusion. This should eventually create a master list of possible EGA products that will be the subject of tariff-specific talks.

All but three of the current EGA participants have tabled an initial indicative list of products that they believe fall under the categories discussed in the past two rounds, held in July and September, respectively. (See BioRes, 30 September 2014)

Sources report that China has said that it hopes to be in a position to follow suit in January after finishing its relevant domestic consultations.

Formal negotiations on tariff lines are expected to start next April after each of the categories has been discussed.

Sources told BioRes that this latest round helped to clarify how much technical work lies ahead, particularly as product nominations start to come in, given that some products will need to be carefully defined vis-à-vis tariff lines.

Negotiators also invited representatives from several industry associations and individual firms to present on various environmental products and their components, as well as recent market trends.

Environmental services?

The EGA group first signalled its intention to pursue a “green goods” trade agreement in January at the World Economic Forum’s annual meet in Davos, Switzerland. (See BioRes, 28 January 2014

At the time, participants said they would create a ''future oriented agreement,'' capable of addressing upcoming global challenges and able to contribute directly to green growth and sustainable development.

Some EGA officials speaking to BioRes have stressed that while the talks are currently focusing on tariff issues related to environmental goods, several participants have not ruled out returning to issues such as environment-related services and non-tariff barriers (NTBs) in the negotiations at a later date.

An informal meeting between EGA officials and delegates charged with negotiating a proposed Trade in Services Agreement (TISA) – another standalone pact that would liberalise services trade – took place during the week. While there is substantial overlap between the memberships of these two ongoing negotiations, these groups are not identical.

Discussions in the informal meeting reportedly focused on how best to address the challenges related to increasing the trade of environment-related services and a specific Canadian TISA proposal on the topic. The ninth round of TISA negotiations also took place last week in Geneva, Switzerland.

Expanding membership

The group has said that it is open to working with other WTO members in this endeavour, as long as they are interested in pursuing similar objectives and ambition as current EGA participants.

To this end, the group has been updating the WTO’s Committee on Trade and Environment on the progress made in the negotiations, and EGA members have also conducted a number of transparency meetings with interested trade partners.

Israel has been the first to apply to join the EGA group, followed by Turkey, and now more recently Iceland.  

In order for a new participant to join, however, each existing EGA member needs to agree, following relevant domestic consultations. This includes, for example, a 90-day notification period to Congress for the US. EGA hopefuls cannot take part in the actual negotiations until the Congress notification period has ended.

It is expected that this US process will end in mid-January for Israel ­– allowing them to join the fourth round of negotiations – and by mid-February for Turkey. The US has yet to notify Congress of Iceland's interest in joining the negotiations.

A number of other WTO members have reportedly also signalled an interest in joining these talks.

Questions of participation are important for the EGA given that these negotiations are being conducted on a so-called open plurilateral basis.

This means that the full benefits of the eventual agreement will be extended to other WTO members on a most favoured nation basis once EGA participants agree on the critical mass threshold for its operationalisation - in other words, how much world trade in goods selected for liberalisation is captured by the group’s participants.

According to ICTSD research, and based on COMTRADE data, it is estimated that the 14 WTO original EGA participants, counting the EU as one member, accounted for 86 percent – 78 percent of imports and 93 percent of exports – of global trade in the 54 APEC subheadings in 2012. (Editor’s note: ICTSD is the publisher of BioRes.)

Next steps

The fourth round of the EGA negotiations is planned for the last week of January in Geneva, and is expected to address topics such as goods and technologies related to cleaner and renewable energy, as well as energy efficiency. A fifth round is scheduled for 16-20 March.

ICTSD reporting.

 

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