WTO Ministerial Section • Volume 9 • Number 39 • 16th November 2005
WTO Environment Committee Debates Draft Text For Hong Kong
Discussions on versions of the draft ministerial declaration text on trade and the environment for the WTO’s Hong Kong Ministerial Conference continue to reflect Members’ divisions over how to identify environmental goods and services for the purpose of liberalising trade in them.
The latest version of the draft text, put together by environment negotiations Chair Ambassador Toufiq Ali of Bangladesh, was discussed at an informal 9 November meeting of the Committee on Trade and Environment Special Session (CTE-SS). The text recognises the "significant work" that Members have undertaken under the Doha negotiating mandate, particularly on reducing tariff and non-tariff barriers to environmental goods and services as per Paragraph 31(iii) of the Doha Declaration, and asks them to intensify their efforts. It also takes note of work done under Paragraph 31(i), on the relationship between WTO rules and trade obligations set out in multilateral environmental agreements (MEAs); and Paragraph 31(ii), on facilitating information exchange between MEA Secretariats and relevant WTO committees and on developing criteria for the granting of observer status.
Environmental goods and services prove controversial
The draft text’s provisions on the liberalisation of trade in environmental goods and services proved the most controversial at the meeting, with Members’ comments reflecting their broad division into two camps on how to go about it.
In general, developed and newly industrialised countries have been supporting the so-called ‘list’ approach, which would have Members multilaterally agree on a list of goods that would be slated for expedited liberalisation. Most developing countries, however, remain sceptical of this approach, arguing that the lists submitted so far are dominated by goods of export interest to rich nations. The only alternative to the list approach that is seriously being discussed at this stage is India’s ‘environmental project’ approach, which provides for temporarily liberalising market access for environmental goods and services used in specific, approved projects (see BRIDGES Weekly, 21 September 2005).
The draft text provides two broad alternatives for future work on environmental goods and services: that the CTE-SS should cooperate with other relevant negotiating groups to intensify work either "based on shared approaches to fulfilling the mandate" or "with a view to identifying environmental goods and services."
List supporters have supported the second option, since they favour language encouraging the creation of a list of environmental goods that would then be subject to special tariff cuts negotiated in the non-agricultural market access (NAMA) talks. The US went a step further, calling for an explicit reference to collaborating with the Negotiating Group on NAMA and omitting the reference to environmental services from the text. The EU proposed a specific timeline for the negotiations, suggesting 1 March 2006 as the date when negotiations should be completed in the CTE-SS and outcomes handed over to the NAMA group.
Developing countries, on the other hand, favoured the less specific language of the first option, reflecting their desire not to commit to any particular approach at this point. They expressed opposition to the inclusion of any timelines, and argued that the language preferred by the list supporters would prejudge the outcomes of the negotiations, and effectively turn the environmental goods talks into a sectoral NAMA discussion. They strongly resisted references to other negotiating groups and particularly a specific one to the NAMA negotiations.
Process concerns about "information exchange sessions"
Developing countries were also wary of the draft’s reference to the "information exchange sessions" which have taken place ahead of previous CTE meetings, including one organised by the US and two by the WTO Secretariat. Members — primarily supporters of the list approach — used them to outline the benefits to developing countries of removing barriers to trade in the environmental goods on their lists. Developing countries felt that these sessions — though useful for clarification purposes — had been serving as a forum for advancing the examination of lists. Already anxious that the meetings were indirectly becoming part of regular CTE-SS work, they expressed concern that mentioning them in the draft would effectively formalise them as a part of the negotiating process.
At the end of the 9 November meeting, the Chair announced that he would revise the text based on Members’ discussions, circulate it, and consult again with them as soon as possible. A new proposal from New Zealand to include a paragraph that recalls the broad support for negotiations on environmental services will also be addressed at that time.
ICTSD reporting.