Bridges Trade BioRes • Volume 5 • Number 12 • 24th June 2005
INDIA’S ‘PROJECT APPROACH’ CAUSES STIR AT ENVIRONMENTAL GOODS TALKS
INDIA’S ‘PROJECT APPROACH’ CAUSES STIR AT ENVIRONMENTAL GOODS TALKS
At an informal consultation on environmental goods on 10 June, WTO Members discussed a new submission by India proposing the use of what is now referred to as the ‘project approach’, which would link the accelerated (albeit temporary) liberalisation of environmental goods to their use in environmental projects. Canada and New Zealand also submitted new proposals, which involved proposed lists of environmental goods.
New ‘project approach’
The Indian proposal (TN/TE/W/51) on a project approach aims to provide an alternative to the "list" and "criteria" approaches. Most of the recent submissions to the Committee on Trade and Environment Special Session (CTE-SS) have used a list approach, and have suggested a number of items that could be included on such a list. The criteria approach involves developing criteria or a definition of environmental goods at the WTO.
The list approach has raised concerns among many developing countries. In its submission, India outlines some of the problems associated with the list approach, including, among others, the fact that many items that would likely be contained in the list could have dual or multiple uses, the impact of unrestricted concessional market access for environmental goods on indigenous innovation, competitiveness of local industries, and the separation between environment goods and environmental services (EGS) in the negotiations. Also, the submission notes that simply permitting the flow of a number of goods into a country would not necessarily help achieve environmental objectives.
The project approach aims to address these concerns as well as ensure that both the environmental and development goals of the Doha negotiations and Agenda 21, adopted at the Rio Summit on Environment and Development in 1992, are met. To this end, environmental goods and services used in environmental projects would qualify for specified concessions for the duration of the project. Such projects would be approved by a Designated National Authority based on certain criteria to be developed by the CTE-SS and could include, for instance, air pollution control, renewable energy facilities, or environmentally preferable products (EPPs). This approach, India believes, provides sufficient policy space for national governments to achieve environmental objectives. It also mitigates concerns over dual use by making the trade concessions limited to the duration of the project while providing a coherent approach to the liberalisation of both environmental goods and services.
Several Members, in particular developed countries, questioned whether the proposed approach would have as widespread effects as envisaged under the Paragraph 31(iii) mandate on EGS, given that it would be applied on a case-by-case, temporary basis. Some noted that the benefits might in fact be limited to multinational corporations since an environmental project implies a certain scale that might be beyond the capacities of smaller enterprises, which would therefore not be able to take full advantage of this option. Many developing countries welcomed the new, alternative approach as a basis for further discussion, but also raised questions about practicalities.
While several developed countries have pushed for a list to be finalised by the next WTO Ministerial meeting in Hong Kong in December, most developing countries have resisted this attempt, fearing that a list approach would not provide any benefits for them (see BRIDGES Trade BioRes, 4 March 2005). If the Indian proposal attracts sufficient support as a viable alternative, efforts in the lead-up to Hong Kong are likely to focus on striking a balance between the list and project approaches.
NZ, Canada proposals
The New Zealand proposal (TN/TE/W/49) aims to apply its previously proposed use of "reference points" — such as the OECD or APEC lists of environmental goods, or relevant bilateral or regional Free Trade Agreements — in the identification of possible environmental goods. To this end, the proposal presents a list of goods sorted into categories along with the reference points used for each product. In addition to previously cited categories, New Zealand added EPPs, cleaner and more resource-efficient technologies and products, and waste and scrap utilisation as new categories. The proposal was generally well-received, although many countries asked for more time to consider the list and in particular the implications of the new categories.
The Canadian proposal (TN/TE/W/50) simply presents a list of proposed environmental goods, grouped under previously suggested categories that were mainly drawn from the OECD and APEC lists. Canada would like to see an initial list reflecting the trade and environmental interests of both developed and developing countries developed by the Hong Kong meeting. Members said they would need more time to look at the list in detail.
The next meeting of the CTE-SS will be held on 5-6 July.
ICTSD reporting.