WTO Trade & Environment Negotiation Yiting WAN Director, WTO Department, MOFCOM,China Dec., 2011

Structure of the Presentation ：  WTO and environment  WTO Trade and Environment Negotiation  China’s positions on WTO Trade and Environment negotiation

Part I: WTO and Environment

WTO and Environment  Preamble of Marrakesh Agreement Establishing the WTO: “…while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.”

WTO and Environment (cont.)  GATT art. 20 “General Exceptions”: “subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be contrued to prevent the adoption or enforcement by any contracting party of measures” (b) Necessary to protect human, animal or plant life or health (g) Relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption

WTO and Environment (cont.)  The Agreement on Technical Barriers to Trade (TBT): “…technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective taking account of the risks non-fulfilment would create” “such legitimate objectives are, inter alia, …protection of human health or safety, animal or plant life or health, or the environment”

WTO and Environment (cont.)  Para. 6 Doha Declaration(2001, Doha, Qatar): “…we recognize that under WTO rules, no country should be prevented from taking measures for the protection of human, animal or plant life or health, or of the environment at the levels it considers appropriate” “…subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade…”

Part II: WTO Trade and Environment Negotiation

Doha Mandate-Topics for Negotiation The negotiation focuses primarily on three issues: Para.31(i) The relationship between the WTO and MEAs Para.31(ii) Procedures for regular information exchange between MEA Secretariats and the WTO, and criteria for granting observer status Para.31(iii) The reduction or elimination of tariff and non-tariff barriers to environmental goods and services

Doha Mandate-STOs in MEAs  DMD Para.31(i) : “ the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs). The negotiations shall be limited in scope to the applicability of such existing WTO rules as among parties to the MEA in question. The negotiations shall not prejudice the WTO rights of any Member that is not a party to the MEA in question; ”

Doha Mandate-STOs in MEAs (cont.)  A focused discussion of the proposals on the table  Possible outcome include: reference to the mandate, observations on STOs in MEAs, the importance of internal coordination in the negotiation and implementation of MEAs, the use of MEA expertise in the context of dispute settlement

Doha Mandate-Observer Status for MEAs  DMD Para.31(ii) : “ procedures for regular information exchange between MEA Secretariats and the relevant WTO committees, and the criteria for the granting of observer status; ”  Elements paper for a future outcome: almost ready

Doha Mandate –Environmental Goods and Services Para.31 ( ⅲ ) members agree to negotiations, without prejudging their outcome, on: “ the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services. ”  CTESS to determine product scope, modality for concessions addressed by NAMA negotiation  Quite Clear scope for environmental services, being considered in services negotiations, request-offer  Slow progress since started; wide divergences among members;

Environmental Goods(1)  US, EU, Japan, Canada, New Zealand, Korea etc.  Support the Environmental goods list  9 members have submitted their lists  153 products Other lists: Philippines, Qatar, Saudi Arabia, Singapore

Environmental Goods(2)  India, Brazil, Argentina, Egypt  India: Environmental Project Approach (EPA)  the programs can only be authorized by the organizations designated by the country  and only the products covered by the program can enjoy the tariff concession  Brazil: Request-Offer Approach  demanding more flexibility for developing members  organic agricultural goods should be included

Environmental Goods(3)  Submission by India and China TN/TE/W/79 15 Apr transfer of technology ---a financial mechanism ---S&D(lower preference margin, exclusions for certain number of items, transition periods)

Environmental Goods(4)  A hybrid approach: a common core list, a complementary self-selected list ---by Australia; Colombia; HK,China; Norway; Singapore

Doha Mandate –Environmental Goods(4) Headaches…  Multiple-use products  Not full match between environmental products and HS headings  Non-tariff barriers  Technology transfer  Agricultural goods, eg. Organic products, biofuels (supporters: Brazil, India, Argentina, Ecuador, Colombida, Cuba,Egypt,)

Doha Mandate –Environmental Services(1)  Definition, Classification in the W/120 -A. Sewage service -B. Refuse disposal services -C. Sanitation services -D. Other

Doha Mandate –Environmental Services(1)  Classification in the CPC prov. - Sewage services (CPC 9401) - Refuse disposal services (CPC 9402) - Sanitation and similar services (CPC 9403) - Cleaning services of exhaust gases (CPC 9404) - Noise abatement services (CPC 9405) - Nature and landscape protection services (CPC 9406) - Other environmental protection services (CPC 9409)

Doha Mandate –Environmental Services(3)  General - Environmental services: one of the least-committed sectors under the GATS -59 Members have undertaken specific commitments in at least one of the seven CPC sub-sectors of environmental services -In total, 318 sub-sectors have been scheduled -Recently acceded Members have undertaken a proportionally higher level of commitments

Doha Mandate –Environmental Services(4)  Request on environmental servces -Bilateral requests of other WTO Member to China -Plurilateral request  Offers on environmental services  Signaling conference in July, 2008

Doha Mandate – Issues for Discussion To give particular attention to:  Para.32(i) The effect of environmental measures on market access, and those situations in which the elimination or reduction of trade restrictions and distortions would benefit trade, environment and development  Para.32(ii) The relevant provisions of TRIPs Agreement  Para.32(iii) Labelling requirements for environmental purposes

Doha Mandate – Effect on Market Access  Para. 32(i) : to give particular attention to “the effect of environmental measures on market access, especially in relation to developing countries, in particular the least-developed among them, and those situations in which the elimination or reduction of trade restrictions and distortions would benefit trade, the environment and development”  Standards, technical regulations, labelling requirements, packaging and recycling requirements, charges and taxes for environmental purposes

Doha Mandate – Labelling Requirements  Para. 32(iii) to give particular attention to “labelling requirements for environmental purposes”

Doha Mandate – Effect on Market Access and Labelling Developing countries’ concerns:  Increasing number, complexity and stringency of environmental and health requirements, set by different actors (“patchwork of requirements”)  Inadequate access to information about existing or new requirements by producers from developing countries

Doha Mandate – Effect on Market Access and Labelling (cont.) Developing countries’ concerns:  high compliance cost in sectors where SMEs play an important role  Insufficient participation in international standard-setting activities (or at consultation stage) to safeguard developing country interests  Environmental requirements often ignore the principle of “common but differentiated responsibilities”

Doha Mandate – Effect on Market Access and Labelling (cont.)  Reasonable objective to protect environment vs. excessive technical requirement  Avoid de facto trade barriers  Technical assistance, notification, consultation, data sharing, capacity building by training

Doha Mandate – relation with TRIPS Agreement  Para. 32(ii) to give particular attention to “relevant provisions of TRIPS agreement”  Environment protection and technology transfer  Relation between Convention on Bio- diversity(CBD) and TRIPs (addressed in DDA TRIPs negotiation)  Not active discussion

Doha Mandate-TA&CB  Para 33 “We recognize the importance of technical assistance and capacity building in the field of trade and environment to developing countries, in particular the least-developed among them……”  Eg. Preparation of technical regulations, establishment of relevant bodies, facilitating participation in international standard system, training for government officials, workshops to introduce new environmental measures

Doha Mandate – Environment and Development  Para. 51 “The Committee on Trade and Development and the Committee on Trade and Environment shall, within their respective mandates, each act as a forum to identify and debate developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development appropriately reflected”

Part III China’s Positions on DDA Trade and Environment Negotiation

China’s Positions on DDA Trade and Environment Negotiation  Main objective: triple wins for environment, development and trade; to enhance the mutual supportiveness  Part of the “development” agenda; The result should help enhance the ability of developing countries in addressing their environmental problems by themselves ； enhance the ability of environment protection and sustainable development in developing countries

China’s Positions on DDA Trade and Environment Negotiation(cont.)  The negotiation is not supposed to create additional barriers to trade  Members should not promote only trade interests in the disguise of environmental protection  Technology transfer and financial assistance to developing countries should be addressed effectively

China’s Positions on DDA Trade and Environment Negotiation(cont.)  Not opposed to a list for the genuine “single-use” environmental products(EGs)  Clear definition and standards for the EGs to avoid “free-riders” on the list  The result should reflect the S&D treatment for developing members  Eg. Developed members offer zero tariff while developing countries offer a lower tariff level;  Willing to work together with other members for the solution of multiple-use products

China’s DDA Offers in Environmental Services  Signaling Conference, July, 2008, Geneva  Allow solely foreign-owned companies in sub-sectors of environmental services, provided our requests in mode 4 and maritime services be accomodated

Current Access to Environmental Services in China  8 sub-sectors: sewage services, solid waste disposal services, cleaning services of exhaust gases, noise abatement services, nature and landscape protection services, other environmental protection services, sanitation services  Covering all modes of services, allowing major shares by foreign investors

China’s National Policy  China’s 11 th Five-year National Plan( ), Chapter 6 Titled “To Encourage the Development of Resources-conservative and Environment- friendly Society”  “…the production should strictly implement the environmental protection criteria…, appropriately control the export of high energy- consuming, heavy-polluting products.”