WTO Update: Environmental goods talks focus on climate

1 July 2010

The WTO's negotiations to open up trade in environmental goods and services saw solid progress during the latest spe- cial session of the Committee  on Trade and Environment (CTE-SS), held on 30 June and 1 July 2010 in Geneva. Under the Doha mandate, Members are seeking ways to cut tar- iffs on products and services that help improve the state of the environment; among these, climate friendly goods have drawn particular attention.

Progress was stimulated by a new proposal from Qatar that identified specific tariff lines for  environmental goods, a submission by Singapore  that also identified environmen- tal products, a communication from Brazil on biofuels, and a joint proposal from Argentina and Brazil on special and differential treatment for developing countries.  Climate- friendly goods - specifically those related to energy efficien- cy - continued to be at the heart of the various proposals.

Members appeared to be responding to the Chair's request that they identify products of trade interest; several del- egates stressed that this generated a positive atmosphere in the negotiations. Some delegates noted that there had been less progress on the most contentious issues - namely whether to use a list approach, a project approach, a re- quest-offer system, or an integrated approach to identify environmental goods and services for liberalisation. Others, however, contend that such negotiations are too time con- suming and would be better tackled after delegates have determined a specific basket of goods.

How tackle special and differential treatment?

The submissions by Brazil, Argentina, Singapore, and Qatar were a continuation of contributions from countries like Ko- rea and Taiwan that are outside the ‘Friends of Environmen- tal Goods' group. The  ‘Friends' group comprises Canada, the EU, Japan, Korea, New Zealand, Norway, Switzerland, Taiwan and the US.

The  joint proposal from Brazil and Argentina on  special and differential treatment (TN/TE/W/76) attracted a fair amount of attention. The WTO agreements include certain provisions that accord  developing countries special rights and privileges  that are often referred to as "special and differential treatment" (or S&DT). The provisions generally allow the global trade body's poorer members greater flex- ibility in cutting their tariffs and subsidies. Exactly how this special treatment should be structured, however, is a mat- ter of ongoing debate.

The Brazil-Argentina submission did not propose specifically how much smaller the tariff cuts should be for developing countries compared to developed  countries. It did, how- ever, outline a guideline that would offer developing coun- tries longer  implementation periods for the liberalisation of goods and services, although it did not precisely indicate how much longer the implementation periods for develop- ing countries should be.

The Brazil-Argentina proposal also contained a clause that would require developed countries to provide importers of their products with  information  about any subsidies they had provided to developers, suppliers and traders of envi- ronmental goods before they could qualify for any reduction or elimination of tariffs.

Identifying environmental goods of interest

Singapore submitted a list of 35 environmental products in seven categories: waste management, air pollution control, noise  pollution control,  wastewater treatment, environ- mental  monitoring, analysis and analysis equipment, re- newable products and energy sources, and energy-efficient products. The list was based on Singapore's own trade data analysis - an approach that could be useful for determining the impacts of EGS liberalisation and that could help ease market-access concerns.

Saudi Arabia clarified that it would put carbon capture and storage (CCS) into its own category, separate from air pollu- tion control, renewable energy, waste management and wa- ter treatment and environmental technologies. Saudi Arabia also added standards (conformity assessment, certification and labelling) and intellectual property rights to its list of non-tariff barriers.

Less polluting fuels: environmental?

Brazil and Qatar made submissions on fuels (natural gas and bi- ofuels) that are supposed to be cleaner than crude oil and coal.

Qatar's submission contained a list of gas to liquids (GTL), natural gas, CCS, gas flaring and fuel cell products. This sub- mission complemented Qatar's 2003 proposal (TN/TE/W/19) and identified energy sources that are "relatively cleaner" than crude oil and goods that can be used to make fossil fuel production more sustainable (both in terms of carbon dioxide and sulphur, nitrogen and other particulate emissions).

In line with Qatar's submission, Brazil's proposal praised the climatic benefits of biofuels relative to traditional fossil fuels. Brazil also raised the issue of energy security through the use of biofuels. Thus, Brazil called for biofuels to be recognised as relevant goods for liberalisation under the EGS negotiations.

All submissions stated that they were without prejudice to the submitters' positions on the specific items that would be included in any final coverage of environmental goods. Thus, the submitting members retained the right to add, withdraw, or revise items in their submission or make appro- priate proposals on other items. Looking ahead, members are expected to continue to revise different lists of environ- mental goods for liberalisation.

Joachim  Monkelbaan is a Global Platform  Programme Officer at the International Centre for Trade and Sustainable Development (ICTSD).

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