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Bangladesh: Multilateral deal on green goodsWednesday, May 06, 2015 > 09:03:49
(The Financial Express by Wasi Ahmed)
The increasing need for environmental security and protection has produced multi-dimensional initiatives across the globe in various shapes and forms. One such is liberalising trade in environmental goods and services, dubbed Green Goods Initiative. A large number of members of the World Trade Organisation (WTO), including the European Union (EU) and US, have recently got together to pursue "global free trade" in environmental goods. They have announced a plan to negotiate a plurilateral deal that would eliminate tariffs on such products.
The initiative, by way of spreading the use and benefits of environmental goods, services and technologies, is believed to augur well for the global efforts to tackle climate change. 'We are convinced that one of the most concrete and immediate contributions that the WTO and its members can make to protect our planet is to seek agreement to eliminate tariffs for goods that we all need to protect our environment and address climate change,' the participating group of countries said in a joint statement recently. It may be mentioned that total global trade in environmental goods reached nearly $955 billion in 2012, according to US data, with tariffs on some products as high as 35 per cent.
Lowering tariff and non-tariff barriers with regard to environmental goods and services (EGS) were part of the WTO Doha Round's original negotiating mandate, launched in 2001. The negotiations failed to make any headway with the WTO members at odds over issues such as how to identify these goods, and what products a global deal in this area would cover.
The key emphasis of the renewed green initiative is on redesigning trade policies of the member countries in a way that besides fetching trade benefits, should be able to deliver sustainable progress in the field of environmental protection. The focus would be on products and technologies that contribute to green growth and promote actions on climate security.
The goals, as in any other environment protection programme, envisage development through ensuring clean environment, clean water and air, efficient waste management, energy efficiency, increasing use of renewable energy etc.
The initiative's immediate focus is on trade policies pursued by countries in order to remove anti-environment bias and reshape the trade policy regimes so that they can contribute to dealing with environmental protection and climate change. At the outset, the talks will focus on removing tariffs on a list of 54 products. Tariff reduction of these identified products, believed to promote environment, is expected to set the stage for further negotiations. This, the lead countries hope, will facilitate increased use of the environmental products. The agreement to be inked in this respect will be so designed that it can respond to new technologies and add new products in future. In the process, it would be possible to include environment-related services and tackle non-tariff barriers, such as local content requirements or restrictions on investment.
The initiative also aims at stimulating the negotiations carried out under the WTO as part of the Doha Ministerial Declaration of 2001 in paragraph 31 (iii) on the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.
At this stage, it is not certain how long it will take for the negotiations to commence. However, the joint statement says that the agreement is meant to be a "future-oriented" pact that might later address other barriers to green goods. The WTO members who have got together are on their own, without any obligation to the world trade body. But once a critical mass is reached to get an agreement, this initiative is expected to involve all the WTO members under the Most Favoured Nation (MFN) principle. Ideally, the agreement would be made part of the package of the WTO accords so that member countries could take part in the negotiations and open up their own markets of environmental goods. Countries that are currently in agreement to work on and pursue their collaborative move include Australia, Canada, China, Costa Rica, Chinese Taipei, the EU, Hong Kong (China), Japan, Korea, New Zealand, Norway, Switzerland, Singapore, the United States. Together, these countries account for around 86 per cent of the world's trade in green goods.
Although the initiative is yet to chalk out its work programme, observers believe that in the days ahead the green initiative is going to assume a prominent place in global trade talks. And it is also presumed that the EU would be the prime mover of such talks. It may be recalled that in January 2014 the EU, together with 13 other WTO members, pledged to launch negotiations to liberalise global trade in environmental goods. The EU will thus be pushing for an ambitious and comprehensive agreement.
The green initiative is not without criticism. There are critics who have pointed out that the huge potential of green products and technologies in the EU is the main motivation that prompts it to draw ambitious plans and push those through in the multilateral forum. However, until the time negotiations get launched, it is unclear how things are going to be shaped in the link-up of trade and environment.