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Contribution of Trade Opening to
Access to Climate-Friendly
Goods and Services
WTO Side Event at
COP 16, 8 December 2010
Vesile Kulaçoğlu
Director, WTO Trade and Environment Division
“31. With a view to enhancing the mutual supportiveness
of trade and environment, we agree to negotiations,
without prejudging their outcome, on:
(iii) the reduction or, as appropriate, elimination of tariff
and non-tariff barriers to environmental goods and
services.
“a unique mandate” with both challenges and opportunities...
- improving access to green goods and technologies
- delivering on the trade, environment and
development dimensions of the mandate
- overlap with other areas of the DDA
Discussions in CTESS
2002-2005:
Individual lists
tabled by 9
Members
2002
2003
April 2007: 153-items
list by proponents
(“potential
convergence set”)
July 08:
Work
“technical
Programme
discussions”
2004
2005
2006
2007
2005-2007: proposals on
alternative approaches
(India, Argentina, Brazil)
2008
Oct. 09:
Revised Work
Programme
(new timelines)
2009 2010
New submissions on
identification of EGs
of interest and other
issues under mandate
Responding to the mandate
under 31(iii)...
Identifying goods
(product coverage)
Determining treatment
(modalities)
Identification of environmental goods
In the context of a list...
(9 countries)
In the context of requests and offers...
(Brazil)
In the context of the integrated approach...
(Argentina)
Flexibilities for DgC (S&D)
• Japan
• Chinese Taipei
• European Union
• Korea
Group of Friends
(“potential
convergence set”):
• New Zealand
• Canada
• United States
• Switzerland
• Norway
Other Members that have contributed with submissions:
Argentina, Brazil, China, Colombia, Cuba, India, Peru,
Philippines, Saudi Arabia, Qatar
Identification of
environmental goods
• Phase of Identification of EGs of interest (“universe”)
is continuing – exercise started in 2005 with a list of
group of 9 OECD countries with additional
submissions in 2009-10 (Saudi Arabia, Qatar, Japan,
Argentina, Philippines, Singapore)
• List of goods consolidated in Chair’s Report to TNC
(TN/TE/3/Rev.1 in December 2010 )
Examples of categories of goods mentioned
• Renewable energy (wind; solar; geothermal);
• Waste management (Solid and hazardous waste;
waste water);
• Air pollution control;
• Environmental technologies for conservation,
monitoring, analysis and assessment;
• Energy efficient products;
• Carbon capture and storage, gas flaring
emissions reduction, efficient consumption of
energy;
• Biofuels;
• Organic products.
Link to Climate Change
• US-EC proposal (2007): Elimination of tariff and
non-tariff barriers on list of climate-friendly goods
and technologies on an accelerated timeframe by
2013 (43 items identified in World Bank study).
• Japan (2009): Including energy efficient products
that contribute to climate change mitigation (time
bound concessions, not permanent).
• Argentina (2009): Liberalizing goods required in context
of projects under Clean Development Mechanism.
Some examples of overlap
between different submissions...
Friends
Climate
change
focus
Argentina
Examples of goods that
could be used in CDM
projects:
- Wind turbines
- Solar water heaters
- Biogas production tanks
- Methane collection liners
Identifying goods/product coverage:
Some challenges
• No agreed definition or criteria (past work in
OECD, APEC – “defining by doing”)
• Coverage: industrial and agricultural goods?
• Majority of goods proposed have “multiple uses”
(not just environmental)
• Technical issues relating to tariff classification
(ability to distinguish at border; use of ex-outs)
• Constant evolution of the technology (Review
mechanism needed? “one off” exercise?)
Group of 9 countries
Tariff cuts “over and above” what will be
agreed in NAMA
S&D treatment could take the form of:
• Lower rates of liberalization
• Different timeframe for the elimination of tariffs
(i.e. longer implementation periods)
• Additional flexibilities (e.g. product exemptions)
Requests and offers (Brazil)
• Interested Members would draw their own individual
list of goods to be liberalized on an MFN basis
•Process of bilateral negotiations
• Avoids “one size fits all” (not a unique set of
products); more in line with Members’ individual goals
and level of development
Integrated Approach (Argentina)
1- Agree multilaterally on categories of environmental
activities to combat climate change;
2- In accordance with categories, identify climate
change mitigation and adaptation goods that may be
used in national projects;
3- Proceed to reduce/eliminate tariff and NTBs with
respect to goods required in the context of projects
under the Clean Development Mechanism (time bound)
Addressing other issues
under the mandate
Non-tariff barriers (NTBs)
• Some Horizontal examples of NTMs but are these not already
subject to the existing WTO Agreements
•Import barriers related to customs procedures, valuation of goods;
Import prohibitions; Immigration procedures; Local content
requirements; Lack of intellectual property rights protection.
• Need to establish mechanism to deal with NTBs specific to
environmental goods
Addressing other issues
under the mandate
Transfer of technology / TA/ S&D
• Not specifically mentioned in mandate; There is a WTO Working
Group on Trade and Transfer of Technology established as part of Doha
Work Programme
• In CTESS: some information exchange on existing projects or
activities to promote transfer of environmentally-sound technology;
no specific/detailed proposal to date
• Argentina and Brazil call for developed countries to provide
information to enable developing countries to better assess available
environmentally sound technologies in a given field as well as to
properly apply and manage them to suit their specific needs and
priorities
Addressing other issues under the
mandate
Link to Services negotiations
• Environmental services are covered as part of broader
mandate for Services liberalization (voluntary, request/offer
basis)
• Members’ Proposals to revise current Environmental
services classification
• Environmental services relevant in context of environmental
goods identification but negotiations following two separate
tracks
“Universe” of EG Submissions
October 2010
EG Submissions
6 Submissions (as of 1 September 2010):
• Submission by the „9 Members“ (Canada, the European Union, Japan, Korea, New
Zealand, Norway, Switzerland, Chinese Taipei and the United States): JOB(09)/132
circulated 9 October 2009
• Submission by Saudi Arabia: JOB(09)/169 circulated 6 November 2009
• Submission by Japan: TN/TE/W/75/Add.1 circulated 16 February 2010
• Submission by the Philippines: JOB/TE/2 circulated 16 February 2010
• Submission by Qatar: JOB/TE/4 circulated 14 June 2010
• Submission by Singapore: JOB/TE/5 circulated 23 June 2010
HS2002 Classification used in Submissions:
• All submissions are based on the HS2002 classification. However, data of WTO Members
from 2003-2008 are recorded also in the HS1992, HS1996, and HS2007 classifications.
To ensure maximum coverage, in this presentation HS6-codes from all 4 HS-Revisions
have been used – thus, the number of HS6-codes per submissions are larger than the
number of HS6-codes contained in the original submissions.
Universe of EGs: 514 HS6-Codes
(Containing both original HS2002-codes AND corresponding HS1992,HS1996,HS2007-codes)
2 Saudi Arabia (S):
291 HS6
1 Friends (F):
195 HS6
5 Qatar (Q):
20 HS6
3 Japan (J):
90 HS6
4 Philippines (P):
24 HS6
6 Singapore (Si):
91 HS6
Overlap between Lists
400
368
350
300
250
200
150
102
100
37
50
Example for a Quadruplicate:
Gas Turbines 841181/841182 –
two submissions (9M,P) only
consider the use with bio-gas
and
landfill
gas;
two
submissions (S,Q) also include
use with natural gas
7
0
Singles (no overlap)
Duplicates
Triplicates
Quadruplicates
Some examples of overlap
between different submissions...
Friends
Saudi Arabia
263 items (HS)
used for:
92 items in common
Categories from Friends’ list with a
high level of convergence are:
- Waste water management and potable
water treatment
-Air Pollution Control
- Heat and Energy Management
- Noise and Vibration Abatement
- Natural Risk Management
- Carbon capture
and storage
- Gas flaring
emissions
reduction
- Efficient
consumption of
energy
WTO Nominal Exports 2003-2008
(in Trillions of US$, 514 HS6-Codes, Source: UN Comtrade)
$12
$11.1
$10
(2003-2008: +217%)
$9.6
$8.3
$8
$7.2
$6.3
$6
Total Merchandise Exports
Exports Environmental Goods
$5.1
$4
$2.6
$2
$1.3
$1.6
$1.9
$3.0
$2.2
$0
2003
2004
2005
2006
2007
2008
(2003-2008: +230%)
Share of EGs in WTO Merchandise
Exports 2008
(in Trillions of $; 514 HS6-Codes; Data Source: UN Comtrade)
All Goods: $11 Trillion
Environmental Goods
$3
27%
Other Goods
$8
73%
WTO Nominal Trade of EGs by Category
(in Trillions of US$, 514 HS6-Codes, Data Source: UN Comtrade)
$1.60
$1.40
$1.36
$1.23
$1.20
$1.02
$1.00
APC
$0.90
$0.80
$0.60
$0.40
$0.20
$0.00
RE
WM
$0.79
ET
$0.65
$0.57
$0.40
$0.34
$0.15
$0.10
$0.08
2003
$0.44
$0.30
$0.21
$0.12
$0.10
2004
$0.14
$0.11
2005
$0.49
$0.35
$0.17
$0.14
2006
$0.60
$0.58
$0.41
$0.26
$0.16
2007
$0.30
$0.19
2008
Oth
Top 15 WTO Exporters 2008
(in Billions of US$, Compilation List, 108 WTO Members available, Data
Source: UN Comtrade)
Others, $415, 14%
15. Turkey, $36, 1%
1. EU27 External
14. India, $50, 2%
2. China
3. USA
13. Norway, $56, 2%
1. EU27 External, $598,
19%
12. Thailand, $57, 2%
11. Chinese Taipei, $71,
2%
6. Singapore
7. Canada
8. Mexico
10. Malaysia, $81, 3%
9. Hong Kong, China,
$83, 3%
2. China, $410, 14%
6. Singapore, $133, 4%
5. Rep. of Korea, $134,
4%
4. Japan, $324, 11%
9. Hong Kong, China
10. Malaysia
11. Chinese Taipei
8. Mexico, $101, 3%
7. Canada, $125, 4%
4. Japan
5. Rep. of Korea
12. Thailand
3. USA, $363, 12%
13. Norway
14. India
15. Turkey
Others
Top 15 WTO Importers 2008
(in Billions of US$, Compilation List, 108 WTO Members available, Data
Source: UN Comtrade)
1. USA
2. EU27 External
Others, $623, 20%
1. USA, $624, 20%
15. Turkey, $44, 1%
6. Rep. of Korea
7. Singapore
8. Hong Kong, China
9. Mexico
14. Brazil, $47, 2%
13. India, $51, 2%
12. Indonesia, $59, 2%
11. Australia, $64, 2%
10. Chinese Taipei, $72,
2%
9. Mexico, $93, 3%
8. Hong Kong, China,
$94, 3%
7. Singapore, $108, 3%
6. Rep. of Korea, $113,
4%
5. Canada, $116, 4%
3. China
4. Japan
5. Canada
2. EU27 External, $603,
19%
3. China, $237, 8%
4. Japan, $169, 5%
10. Chinese Taipei
11. Australia
12. Indonesia
13. India
14. Brazil
15. Turkey
Others
Average Bound Tariffs 2009 on EGs
(514 HS6-Codes, Data Source: WTO Integrated Database, TL-Weighted
Averages)
0%
5%
10%
15%
20%
25%
30%
40%
45%
42%
LDCs
27%
Developing Countries
Industrial Countries
35%
5%
Average Applied Tariffs 2009 on EGs
0%
5%
10%
LDCs
11%
Developing Countries
Industrial Countries
15%
6%
2%
20%
25%
30%
35%
40%
45%
Percentage of Duty-Free Tariff Lines 2009
0%
10%
20%
30%
40%
Industrial Countries
60%
58%
Developing Countries
LDCs
50%
39%
11%
70%
Average MFN Tariffs 2009 by Category
(Data Source: WTO Integrated Database, TL-Weighted Averages)
16.0%
14.4%
14.0%
12.0%
11.2%
10.9%
10.7%
10.8%
10.0%
10.0%
LDCs
8.0%
Developing Countries
6.1%
5.5%
6.0%
4.0%
6.1%
5.5%
3.0%
1.9%
2.0%
1.9%
1.5%
1.8%
0.0%
APC
RE
WM
ET
Oth
Industrial Countries
Next Steps
• Further discussions needed starting with cross-cutting and
development-related issues in parallel to the work on the
identification of goods within categories
• Linkages with other areas of DDA negotiations (NAMA/Ag
modalities)
• 30 November 2010 TNC meeting: 2011 a window of
opportunity for the Doha Round negotiations
•Trade and Environment negotiations will accelerate from
10 January
Thank You
•
GENERAL COUNCIL
Special
Session of the
Committee on
Agriculture
Trade Negotiations
Committee (TNC)
Session
TRIPS Special
Session
Special
Session of
the Council
for Trade in
Services
CTE
Special
Negotiating
Group on
Market
Access
Special Session
of the Dispute
Settlement Body
Para 31(iii)
Negotiating
Group on
Rules
Some examples of overlap
between different submissions...
Friends
Philippines
17 items in total, 16 of which are
also contained in Friends’ list
Renewable energy: PV cells; solar water
heaters; towers and lattice masts for wind
turbines; hydraulic turbines
Heat and Energy Management: heat
exchangers to be used in RE systems
Waste Management, Recycling and
Remediation: parts for biomass boilers; soot
removers (air pollution control)
State-of-Play under the
Work Programme
Submissions identifying EGs of
interest:
- Friends (Job(09)/132)
- Argentina (TN/TE/W/74)
- Japan (TN/TE/W/75 and add.1)
- Saudi Arabia (Job(09)/169 and add.1)
- Philippines (Job/TE/2)
- Qatar (Job/TE/4)
- Singapore (Job/TE/5)
- Brazil (JOB/TE/6) (Biofuels)
Some overlaps with
respect to products...
Caveats
Trade Data (UN Comtrade Database):
• Based on entire HS6-Lines
• Nominal US$ Values in Time Series using Current Exchange Rates (and not Purchasing
Power Parity – Rates)
• Recording Errors and Evaluation Differences between reporting importing and
reporting exporting countries
• Officially reported trade flows, when available, otherwise estimated via official reports of
trading partners
Tariff Data (WTO Integrated Database and ITC):
• Simple („Tariff-Line-Weighted“) Averages that weigh all scheduled Applied MFN tariff
lines equally – regardless of actual trade volumes
Trade and Tariffs:
• HS-Concordance – All EG-lists apply the HS2002 Revision, which currently is only used
by 23 Members. The concordance to other Revisions may be imprecise, since many codes
have no one-to-one relationship with HS2007 and HS1996 codes.
• „Developed“, “Developing“, „LDCs“: All WTO Members are counted as „Developing“
with the exception of Australia, Canada, the EU27, Iceland, Japan, Liechtenstein, New
Zealand, Norway, Switzerland and the USA that are counted as „Developed“, and all
LDCs, that are counted as „LDCs“
HS6-Codes per List
(Containing both original HS2002-codes AND corresponding
HS1992,HS1996,HS2007-codes)
300
291
250
195
200
150
91
100
90
50
24
20
Qatar
Phillippines
0
Saudi Arabia
9 Members
Singapore
Japan
Maximum Number of HS6-Lines per
Category
(Drawn from all HS6-Revisions: HS92,HS96,HS02,HS07)
350
317
300
250
Environmental Technologies:
1. Carbon Capture and Storage Technologies (CCS), Gas Flaring Emission Reduction
Technologies (GFR), Efficient Consumption of Energy Technologies (EC)
2. Cleaner or More Resource Efficient Technologies and Products (CT/P)
3. Energy Efficiency (EE)
4. Environmental Monitoring, Analysis and Assessment Equipment (M/A)
5. Heat and Energy Management (H/EM)
6. Natural Risk Management (RM)
7. Noise and Vibration Abatement (N/V)
200
Others:
1. Environmentally Preferable Products based on
End-Use or Disposal Characteristics (EPP)
2. Natural Resources Protection (NR)
3. Renewable Products and Energy Sources (RPE)
4. Other (OTH)
150
86
100
41
50
38
32
0
Environmental
Technologies
Waste Management / Air Pollution Control Renewable Energies
Water Treatment
Others