The Environmental Goods Agreement (EGA) is a trade agreement being negotiated by 17 members of the World Trade Organization (WTO), focusing on reducing tariffs on products that benefit the environment. These products include solar panels, wind turbines, and energy efficiency, as well as air pollution, waste and water management technologies. Once concluded, the EGA will also play a role in helping to implement the Paris Agreement on climate change and the UN Sustainable Development Goals.
What is the EGA?
The Australian Government announced in January 2014 that Australia would join a number of other members of the WTO to negotiate an agreement to remove tariffs on a range of environmental goods. The global market for environmental goods was estimated to be worth US$1 trillion when negotiations were launched in 2014, and is expected to expand to around US$3 trillion by 2020. Australia’s exports of environmental goods in 2014-15 were estimated at $1.5 billion, and imports at $8.7 billion.
The countries involved in the negotiations aim to build on the list of 54 environmental goods which APEC leaders agreed for tariff reduction in 2012. The EGA will incorporate and expand this list to include additional goods that represent the latest innovations in products with environmental benefits.
In addition to Australia, WTO members currently participating in these negotiations are Canada, China, Costa Rica, the European Union and its 28 member states, Hong Kong, Iceland, Israel, Japan, Korea, New Zealand, Norway, Singapore, Switzerland, Chinese Taipei, Turkey and the United States.
Australia chairs the negotiations and is playing a pivotal role in the development of the EGA.
Benefits of the EGA
Australian innovation: Removing tariffs on a wide range of environmental goods will benefit the Australian economy. A growing number of Australian firms are finding niche markets for their products overseas, using cutting-edge technology and unique Australian innovation. Removing tariffs would help Australian industries to better access this rapidly growing global sector. It will spur further Australian innovation and facilitate new investment in climate and clean energy technologies in Australia. In addition, many EGA goods are imported inputs into Australian production and reducing Australia’s tariffs will lower costs for Australian businesses.
Strengthening multilateral trade: The EGA negotiations are important in reinforcing the rules-based multilateral trading system by being open to all WTO members. Tariff elimination undertaken by EGA members will be accessible to all WTO members, and the EGA will only come into force when a critical mass of global trade is reached in the covered environmental goods.
The EGA negotiations currently bring together WTO Members which already account for around 85-90 per cent of global trade in environmental goods. The agreement will be open to any country that shares the aim of promoting free trade in environmental products.
Global environmental benefits: Eliminating tariffs on environmental goods will make them cheaper and more accessible. It will contribute to creating a cleaner environment and improve access to safe water, sanitation and clean energy. This initiative complements the Government’s broader efforts to promote green growth and sustainable development.
The goods under negotiation address a wide range of environmental issues. They include equipment for:
- air pollution control;
- solid and hazardous waste management;
- environmental remediation and clean-up;
- cleaner and renewable energy;
- energy and resource efficiency;
- wastewater management and water treatment;
- noise and vibration abatement;
- environmental monitoring, analysis and assessment; and,
- ‘environmentally-preferable’ products.
A detailed Trade Sustainability Impact Assessment (SIA) on the EGA was published on 19 April 2016. The EU-funded assessment concluded that an ambitious EGA will have significant positive environmental, economic and social impacts.
At the G20 Trade Ministers’ Meeting in Shanghai from 8-10 July, Ministers agreed to aim to conclude the EGA negotiations by the end of 2016, having achieved a landing zone by the G20 Summit in September. The landing zone for the EGA was developed during the fifteenth round of negotiations, held from 24-29 July 2016 in Geneva.
On 5 September, G20 Leaders welcomed the landing zone and reaffirmed the commitment to conclude the EGA negotiations by the end of 2016. A side meeting of participating EGA Ministers was held during the WTO Mini-ministerial meeting in Oslo on 21-22 October 2016. A final meeting of EGA Ministers is expected to take place in December 2016, following a series of negotiating rounds in September, October and November.
History of the negotiations
On 8 July 2014 participating WTO members released the 'Joint Statement Regarding the Launch of the Environmental Goods Agreement Negotiations.' The Statement marked the start of negotiations on the goods to be included for tariff elimination.
The first round of negotiations (9-10 July 2014) focused on setting the negotiation framework. At its conclusion, the parties issued an official statement summarising key outcomes. During the second round (22-26 September 2014) the parties discussed a possible list of product categories of environmental goods, and held more detailed discussions on two specific categories, namely air pollution control and solid and hazardous waste management. This included an initial information exchange on the types of products that could be included under these two categories. The parties also explored ways to build on the APEC list. The outcomes of the second round were summarised in a Chair’s statement for the 23 October WTO Committee on Trade and Environment.
The third (1-5 December 2014), fourth (26-30 January 2015) and fifth rounds (16-20 March 2015) considered product nominations under each environmental product category. New EGA members Israel, and then Iceland and Turkey were also welcomed at the fourth and fifth rounds, respectively.
The sixth (4-8 May 2015), through to the eleventh (31 November - 5 December) negotiating rounds further focused negotiations on nominated environmental products.
A Chair’s statement on 14 December 2015, during the 10th WTO Ministerial Conference in Nairobi, highlighted the progress that had been achieved in the eleven previous negotiation rounds over an eighteen-month period.
EGA members reconvened for the twelfth round on 2-4 March 2016 and agreed on further work to navigate a path toward conclusion. At the thirteenth round (18-22 April 2016), negotiators continued work to resolve outstanding issues and exchanged information about more sensitive products, including those which might require tariff elimination staged over a number of years. The fourteenth EGA round (20-24 June 2016) saw a renewed focus on product coverage, with member countries highlighting key sensitivities and priorities; text related issues were also covered.
At the fifteenth round (24-29 July 2016), EGA officials - following the lead of G20 Trade Ministers - agreed on a landing zone upon which to focus negotiations in the second half of 2016. Following G20 Leaders’ encouragement to aim for the conclusion of the negotiation by the year-end, the sixteenth round (19-23 September 2016) and seventeenth round (16-20 October 2016) of negotiations focused on the tasks required to meet this goal.
Consultations and public outreach
The opportunity to nominate additional environmental goods as part of the EGA negotiation has closed. However, we would welcome receiving supplementary information concerning environmental goods already nominated, or environmental goods and services that could be considered in any future review of the EGA. Contact details are:
Phone: 02 6261 1537
Below is the list of stakeholders which have provided submissions during industry consultations on the EGA which commenced in 2014. Copies of submissions are attached where interested parties have provided permission for their public release. Sensitive commercial information has been removed.