Bridges Weekly Trade News Digest • Volume  • Number  • 21st September 2005

CTE Moves On To Technical Discussions On Environmental Goods

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WTO Members largely set aside the relationship between WTO rules and multilateral environmental agreements (MEAs) during the 15-16 September meeting of the Special (negotiating) Session of the Committee on Trade and Environment (CTE-SS), focusing instead on how to advance the talks on environmental goods.

In a shift from earlier debates that revolved broadly around how to go about liberalising trade in environmental goods, delegates got down to more pragmatic discussions regarding the environmental and developmental justifications of specific products.

Identifying win-win-win opportunities

As part of a product-specific process, WTO Members welcomed a meeting convened by the US just prior to the CTE session where it provided case studies on the environmental and developmental benefits of liberalising trade in the environmental goods on its own proposed list. Many delegates felt that such exercises could help test the credibility of lists, to streamline them, and to critically analyse potential win-win-win opportunities for trade, environment and development. Some Members, including Switzerland and Canada, suggested that they might hold similar workshops for their respective lists.

On the way forward for the negotiations, Canada proposed structuring discussions according to categories, naming goods related to sanitation, wastewater management and renewable energy as three possibilities. They said this approach would help clean up existing lists and support developing countries in the preparation of their own lists. The proposal was generally welcomed as a potential starting point for more detailed debate, although delegates expected that additional categories would emerge in the course of the discussions.

India continued to promote its ‘environmental project approach,’ which would temporarily liberalise trade for particular environmental goods and services used in approved environmental projects (BRIDGES Trade BioRes, 13 July 2005). In contrast to the previous CTE meeting, India appeared more willing to consider a combination of the project and list approaches, as long as its two main concerns were addressed — namely that environmental goods chosen for increased liberalisation did indeed contribute to environmental protection, and that the ‘dual use’ issue (i.e. the fact that certain environmental goods may have both environmental and conventional uses) was dealt with.

Brazil insisted on the need to consider criteria for identifying environmental goods, though it welcomed the US and Canadian initiatives. Its delegates noted that such criteria would help to more clearly specify the limits of the expected outcome, including the expected scope and volume of trade in the listed goods. They also suggested that clear criteria would give developing countries the confidence to come forward with lists of their own.

The road to Hong Kong

Observers generally agree that it is unlikely that Members will finalise a list in time for the Hong Kong Ministerial Conference in December, though precise expectations for the summit remain unclear.

Discussions in the CTE have for some time focused almost exclusively on environmental goods under Paragraph 31(iii) of the Doha Declaration. Nevertheless, some delegations rejected a suggestion by CTE-SS Chair Ambassador Toufiq Ali of Bangladesh to drop MEA-related negotiations under Paragraphs 31(i) and (ii) until after the Hong Kong meeting. Developing countries in particular expressed the fear that such a move could set a procedural precedent, given that so far no other negotiating issue has been formally dropped from discussions in the lead-up to December. In addition, MEA-related issues, which are of particular interest to some developed countries such as the EU and Switzerland, may serve as a potential bargaining chip — in exchange for agreement on an issue of interest to developing countries — at a later juncture in the negotiations.

Citing the lack of agreement on other important negotiating issues, notably agriculture, several countries highlighted that movement in these areas would be a prerequisite for major progress on environment-related issues.

The next regular session of the CTE will be held on 12 October, followed by the CTE-SS from 13 to 14 October.

ICTSD reporting.