Bridges Trade BioRes • Volume 6 • Number 11 • 16th June 2006
DEVELOPING COUNTRIES PRESENT VIEWS ON ENVIRONMENTAL GOODS
DEVELOPING COUNTRIES PRESENT VIEWS ON ENVIRONMENTAL GOODS
Developing countries put forward their views on how best to liberalise trade in environmental goods at an informal technical session of the WTO Committee on Trade and Environment Special Session (CTE-SS) on 12-13 June. Three documents from India, Colombia and a group of developing countries set out their objections to the list approach and their preferred approaches to the mandate under paragraph 31(iii) of the Doha Declaration to negotiate on the "reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services".
The meeting had been originally planned as the final technical session in a series of gatherings where WTO Members were to evaluate whether to liberalise products that had been proposed as candidates for inclusion in a list of environmental goods (see Bridges Trade BioRes, 19 May 2006). The remaining categories of products to be discussed included environmental monitoring, analysis and assessment equipment; remediation and clean up of soil and water; cleaner technology and products; environmentally preferable products based on end us or disposal characteristics; and high environmental performance or low environmental impacts. Several proponents of the list approach, which are members of the so-called ‘Friends of environmental goods’ group that includes mainly developed countries, made presentations about the products they had suggested for liberalisation. However, developing countries expressed doubts regarding the effectiveness of the step-by-step examination of products under the list approach, saying that discussions were going in circles.
Developing countries’ concerns
Several developing countries expressed concern that cross-cutting issues such as special and differential treatment, non-tariff barriers and technology transfer needed to be addressed in more detail. They noted that these concerns were very important to them, and needed to be taken into account in any approach to the negotiations. In addition, they repeated their opposition, expressed in previous meetings, regarding the practice of identifying specific products for liberalisation solely by name rather than by HS code — the so-called ‘ex-out’ approach.
However, developing countries also raised more systematic complaints and criticisms regarding the list approach. Egypt, India, Argentina, Brazil, Mexico and South Africa, along with several other developing countries, tabled a room document stressing the importance of only liberalising environmental goods that serve a single environmental end-use. The group of countries, who referred to themselves as the ‘Friends of the environment and sustainable development’, said that unless liberalisation was limited to these single end-use products, the paragraph 31(iii) mandate could be used to reduce tariffs without environmental benefits, which would only benefit the economy of the exporting country. Better efforts needed to be made, they suggested, to make sure products liberalised under the environmental goods mandate actually served real environmental and developmental goals. They said that the proponents of the ‘list approach’ had failed to demonstrate that the products they were proposing only had a single environmental end-use, nor had they shown the environmental or developmental benefits of liberalisation of the products. Instead, the developing countries said that Members should focus on India’s ‘environmental project approach’ in order to get clear environment and developmental benefits.
India presents refined ‘project approach’
India submitted a fourth version of its proposal to adopt an ‘environmental project’ approach to the negotiations (TN/TE/W/67). The project approach proposes enabling a designated national authority (DNA) to decide, on the basis of multilateral agreed criteria and parameters, whether an environmental project should qualify as a project under the WTO rules, and thereby be eligible for market access concessions on goods and services used for the duration of the project (see Bridges Trade BioRes, 23 June 2005).
The paper argues that the project approach responds to the objectives of Paragraph 31 (iii) of the Doha Ministerial Declaration in a much more effective and comprehensive manner than the ‘list approach’. Unlike the ‘list approach’, they argue, the project approach includes enhanced market access for environmental services, addresses non-tariff barriers and enables dynamic coverage of changing technologies. The paper also attempted to address some of the criticisms that have been made regarding the project approach, including the lack of predictability and transparency. It points out that the approach would multilaterally define the boundaries and parameters of policy space for Member countries to address their environmental problems in a developmentally-supportive way. In this sense, it addresses concerns by several developing countries that the list approach could restrict their flexibility to make environmental policy. Instead, India argues, the project approach would create multilaterally-agreed criteria for EGS liberalisation with which individual countries could address their national environmental goals along with global environmental objectives.
India also attempted to counter the allegation that since countries can already unilaterally reduce tariffs for projects, the project approach does not provide any additional reason to liberalise. The project approach would provide multilaterally-agreed definitions and criteria of environmental projects, they argued, whose domestic implementation would be subject to WTO dispute settlement. As such, the approach would provide additional binding tariff coverage of many environmental goods and services. Lastly, they pointed out that any concessions through the project approach would be granted to all WTO Members equally, that is through the ‘most-favoured-nation’ principle.
A compromise?
Colombia also presented a non-paper (JOB(06) 149) which addresses the concern of other developing country Members that goods and services liberalised under the paragraph 31(iii) mandate must be "clearly and obviously related to the environment" while taking into account the "special situation of developing countries". To qualify for liberalisation as a good that has a single environmental use, they propose that the product must have direct and verifiable environmental application in the categories of environmental control and environmental improvement which supports the objectives of multilateral environmental agreements (MEAs). For goods with dual and multiple uses, Colombia proposes that goods only be liberalised if a designated national authority has approved a project, programme, plan or system with verifiable environmental benefits that uses the good.
This non-paper seeks to bring together India’s project approach, the list approach, the Argentinean "integrated" approach (see Bridges Trade BioRes, 28 October 2005), special and differential treatment and multiple-use concerns. Sources expressed hope that the non-paper could bridge the gaps between the proponents of the list and project approaches, but indicated that all the proposals needed more debate and refinement. Another proposal from Uruguay will be discussed at the next formal meeting of the CTE-SS, which will be held on 6-7 July.
South Africa offers to open borders to environmental consultants
In related news, South Africa on 8 June presented an environmental services liberalisation offer which is the first response to a March request on opening the environmental services sector (see Bridges Trade BioRes, 3 March 2006). Under the negotiation process currently underway in the Committee on Trade in Services Special Session, groups of countries have made so-called "collective" requests to other countries to ask them to open up particular sectors, including the environment. In its offer, South Africa commits to liberalise its regulations on the cross-boundary temporary movement of people providing consultant services in the sewage, refuse disposal, sanitation, noise and vibration abatement and landscape protection services. In addition, it also offers to open up its soil remediation and noise and vibration abatement services sectors to cross-border supply, where only the service crosses the border, and the commercial presence of a company providing these services. The company would only be allowed to set up in the country, though, if it established a joint venture with a local service provider with a maximum of 51 percent foreign ownership. South Africa’s proposal explicitly points out that the proposal does not include services related to the collection, purification and distribution of water for human use.
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