Bridges Weekly Trade News Digest • Volume 10 • Number 22 • 21st June 2006
Developing Countries Present Views On Environmental Goods
At an informal meeting of the WTO Committee on Trade and Environment Special Session (CTE-SS) on 12-13 June, several developing countries reiterated their objections to designating a finite list of specific ‘environmental goods’ for expedited trade liberalisation under Paragraph 31(iii) of the Doha Declaration.
The gathering was originally supposed to continue a product-by-product evaluation to determine which of the 480-odd goods that Members have proposed for such liberalisation truly qualify as ‘environmental’ (see BRIDGES Weekly, 17 May 2006). These technical discussions have been marked by disagreement between developing and developed countries — the former argue that a single potential non-environmental end use should suffice to disqualify a product from consideration; the latter counter that this would exclude all but a handful of items.
As planned, the meeting started with presentations by some of the ‘friends of environmental goods’ — a group of mainly developed countries that support the ‘list’ approach — about the products they had suggested for liberalisation. For instance, Japan made a presentation on hybrid cars; the US, on equipment for analysing water and air pollution. Switzerland spoke on ‘environmentally preferable products’ such as railway trains and bicycles, and whether or not they should be considered as environmental goods.
However, as the meeting progressed, many developing countries continued to express doubts about the effectiveness of the product-by-product evaluation, arguing that the discussions were going in circles. They reiterated that areas of concern to them, such as special and differential treatment, non-tariff barriers, and technology transfer, needed to be taken into account in the negotiations.
Developing countries have long been sceptical about the list approach, fearing that the products ultimately slated for sped-up liberalisation would not be of export interest to them.
Developing countries’ concerns
Argentina, Brazil, Egypt, India, Mexico and South Africa, along with several other developing countries tabled an informal document detailing more systematic complaints and criticisms regarding the list approach, stressing the importance of only liberalising trade in environmental goods that serve a single environmental end-use.
The group of countries, referring 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 need to be made, they suggested, to make sure liberalisation under the environmental goods mandate actually serves real environmental and developmental goals.
The sponsors of the paper said that the supporters of the ‘list approach’ had failed to show that the products they were proposing had only a single environmental end-use, and had also not succeeded in demonstrating any clear environmental or developmental benefits of liberalisation.
Instead, they said that in order to get clear environmental and developmental benefits, Members should focus on India’s ‘environmental project’ approach.
India presents refined ‘project approach’
Under this approach, each Member country would set up a ‘designated national authority’ to authorise projects as ‘environmental’ and thus eligible for temporary market access concessions on goods and services used in them (see BRIDGES Trade BioRes, 23 June 2005). India defended its favoured methodology in a new submission (TN/TE/W/67).
The Indian paper argues that unlike the ‘list approach’, the project approach addresses non-tariff barriers and obstacles to environmental services, and would respond more effectively to changes in technology. The paper rejected criticisms that the project approach lacked predictability and transparency, pointing out that it would create multilaterally-agreed criteria for liberalising trade in environmental goods and services — and that the domestic implementation of these criteria would be subject to WTO dispute settlement. The approach, it argued, would define boundaries within which individual countries would address their national environmental goals along with global environmental objectives in a developmentally supportive way.
In response to allegations that the project approach would provide no new incentive to liberalise since countries can already unilaterally reduce tariffs for projects, India argued that concessions would have to be granted to all WTO Members equally, that is, through the ‘most-favoured nation’ principle. It also pointed out that the approach provided for ‘temporal binding’ — any concessions agreed to would be temporarily bound for the duration of the project in question.
A compromise?
Colombia also presented an informal ‘non-paper’ (JOB(06)149) which appeared to suggest a compromise. It outlines potential criteria for defining products with a single environmental use: they must be used either for improving the environment or reducing waste and the consumption of natural resources, and must have a "direct and verifiable" environmental application that complies with the objectives of multilateral environmental agreements (MEAs). For goods with dual and multiple uses, Colombia proposes that Members would only need to liberalise trade if they were used in a project, programme, plan or system deemed to have verifiable environmental benefits by a designated national authority.
The document aimed to bring together India’s project approach, the list approach, and Argentina’s "integrated" approach that would create a list of goods and services that would then be eligible for project-specific liberalisation (see BRIDGES Trade BioRes, 28 October 2005), while also addressing concerns about special and differential treatment and multiple use.
Sources expressed hope that the Colombian submission would be able to bridge the gaps between Members, but indicated that all of the new proposals needed to be further debated and refined.
Another proposal from Uruguay will be discussed at the next formal meeting of the CTE-SS, scheduled for 6-7 July.
ICTSD reporting.