Liberalizing Trade in Environmental Goods: What to include? International Technical Workshop on Measuring Progress in “Greening” the Economy: Policies and Practices Liberalizing Trade in Environmental Goods: What to include? Karsten Steinfatt Trade and Environment Division, WTO 15 May 2014

Doha Development Agenda: Paragraph 31(iii) Doha Ministerial Declaration (2001) With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on […] iii) the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services. Paragraph 31(iii) Identification of environmental goods and services Determination of modalities

Identifying environmental goods Possible parameters: Categories/activities End-use characteristics Contribution to internationally agreed environmental objectives Customs workability

Environmental Goods Submitted by Categories (excluding minerals products, motor vehicles and electric appliances)

The end-use criterion Goods with environmental end-use characteristics: Clear and direct environmental end use/benefit Only to be used in environmental control/improvement Contributes to the 3Rs Shortcomings: Dual/multiple uses Environmentally preferable goods

International instruments Agenda 21 Rio Declaration on Environment and Development Johannesburg WSSD Plan of Implementation MDGs MEAs (e.g., UNFCCC, CBD, Stockholm Convention on Persistent Organic Pollutants)

Customs “workability” HS is not always sufficiently specific 55% of HS-6 tariff lines submitted by WTO Members make reference to “ex-outs” Differentiation possible according to specific criteria Examples of past sectoral liberalization agreements

EG Identification: Challenges Constant evolution of technology 50% of existing technologies are expected to be replaced with new and different goods within 15 years (OECD, 2005); “One off” exercise? Review mechanism (proposed by New Zealand and “group of friends”). ?

EG Identification: Convergence Saudi Arabia: 259 HS6 Qatar: 20 HS6 7 3 3 1 4 2 158 1 9 Members: 169 HS6 21 1 53 2 Overlapping # HS-6 1x 278 2x 89 3x 35 4x 7 8 1 45 2 3 1 valves for boilers, gas turbines, (water) gas generators. 1 1 20 55 1 18 Philippines: 17 HS6 Japan: 59 HS6 Singapore: 72 HS6 Note: Proportions not respected

Environmental Goods Exports (excluding minerals products, motor vehicles and electric appliances)

Methodological issues Analysis based on the lists submitted in the CTESS and encompassing 409 different HS-6 tariff lines; Data sources: COMTRADE and WITS (WTO); Indicative analysis only: No consensus on the proposed environmental goods; Mineral products, (efficient) motor vehicles and (efficient) electric appliances omitted resulting in 348 HS-6 tariff lines; Trade flows overestimated because most of the 348 HS-6 submitted refer to “ex-out”.

APEC decision on environmental goods In 2012, APEC leaders endorsed a list of 54  EGs for which APEC economies will reduce applied tariff rates to 5% or less by end 2015, taking into account: - individual economies’ economic circumstances, and - without prejudice to economies’ positions in the WTO   Categories Number of HS sub-headings Renewable 15 Environmental Monitoring, Analysis, Assessment Equipment 17 Environmental-protection  21 Environmentally Preferable Products 1 Source: ICTSD

Conclusions Need for a closer dialogue between data experts and trade negotiators Technical assistance and capacity building to customs administrations would enlarge the realm of workable solutions Data needs: global value chains in environmental goods, NTBs.