Quick Win No. 1
Make trade green again by rebooting negotiations on environmental goods and services
Humanity must change its consumption patterns to limit greenhouse gas emissions and achieve the goals set out in the Paris Climate Agreement. This requires effort from all market participants, from producers to end-users, to accelerate the adoption of green products and services in all areas, such as energy, infrastructure, transport, and household consumption. The primary challenge is how to make these products and services available to all market participants, including ordinary citizens and small businesses. One thing is certain–the world cannot decarbonize without trade. Countries should make efforts to agree on joint green standards and eliminate tariffs and other trade barriers globally on “green” goods. This is possible with the revival and modernization of the stalled negotiations for an Environmental Goods Agreement (EGA).
The EGA talks are plurilateral negotiations involving 18 participants representing 46 WTO members, including the European Union (EU), the United States (US) and China. It was foreshadowed in the 2001 Doha Ministerial Declaration which called for the “reduction, or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.” Negotiations were launched in 2014 and, at that time, the participant countries accounted for nearly 90% of global trade in environmental goods. The aim of the talks is to eliminate tariffs from goods listed as “green” with the goal of making the list organic and open to the inclusion of additional products. Negotiations were well advanced but collapsed in December 2016. There were many reasons for the failure. One was that China introduced a revised list of environmental goods containing several controversial products at a late stage in the negotiations. Another reason was that the EU did not want to include bicycles on the list of “green” goods because of fears of Chinese overproduction of bicycles and intensive pressure from industry. With some effort, a compromise could have been reached, but with the election of Donald Trump as President of the United States in 2016, negotiations stalled. Now is the time to restart them.
Facilitating trade in technologies related to carbon capture, sewage systems, solar panels and wind turbines should be easily achievable, especially as it is in line with the Technology Mechanism of the United Nations Framework Agreement on Climate Change. Several countries have expressed interest in giving the EGA negotiations a new impetus. What complicates matters is not only current US-China tensions, but the challenge of balancing the different industrial policy interests of members and the complexity of the interface between trade and environmental policies. There are, however, signs of progress. Recently, all Republican members of the House Ways and Means Committee urged the US Trade Representative, Ambassador Katherine Tai, to resume the EGA negotiations for the sake of reducing global emissions and promoting American jobs.
A group of WTO members should explore the possibility of resuming talks on environmental goods and, importantly, include non-tariff barriers and environmental services in the mandate. A more ambitious EGA agenda would help to better align climate change and trade policies. To encourage negotiation on the basis of objective criteria, an external body or scientific advisory group could help define the scope of green products, green technologies and environmental services. The successful negotiation of a plurilateral agreement on environmental goods would be an important contribution to the fight against climate change. It would strengthen the connection between trade and climate, a link many members would like to see made more explicit. And finally, it would show that the WTO is still a vibrant international organization that can facilitate trade and combat climate change through the conclusion of important agreements.
