Trade and Environment
The 1994 Marrakesh Agreement refers to the importance of optimally using the world’s resources in accordance with the objective of sustainable development and seeking to protect and preserve the environment. As such, the role of the WTO in relation to trade and environment is to ensure that environmental policies do not act as obstacles to trade, and that trade rules do not stand in the way of legitimate domestic environmental protection.
Trade and environment issues within the WTO are dealt with by the Committee on Trade and Environment (CTE), which was created by the 1994 Ministerial Decision on Trade and Environment. The Committee’s mandate is broad, and provides opportunities for WTO members to raise a wide range of issues relating to trade and environment. Some of the topics currently being examined by the Committee include eco-labelling and environmental technology dissemination.
Environmental Goods Negotiations
Trade and Investment Minister Andrew Robb announced in January 2014 that Australia would join 13 other members of the World Trade Organization (WTO) to negotiate a plurilateral agreement to remove tariffs on a range of environmental goods. The global market for these environmental goods was worth US$1 trillion in 2012, and is expected to expand to around US$3 trillion by 2020. Australia’s exports of these environmental goods in 2013 were estimated at $1.3 billion, and imports at $7.2 billion.
In addition to Australia, other countries that have agreed to participate in these negotiations are Canada, China, Costa Rica, the European Union, Hong Kong, Japan, Korea, New Zealand, Norway, Singapore, Switzerland, Chinese Taipei and the United States.
Removing tariffs on a wide range of environmental goods is in the interests of the Australian economy. It would help reduce costs for Australian industries and exporters, and give them better access to this significant and fast growing global sector.
The agreement would also be good for the environment by making environmental goods cheaper and more accessible for everyone. This could directly improve the quality of life by providing a cleaner environment and better access to safe water, sanitation or clean energy. While the agreement will not solve the environmental challenges we face locally and globally, it would make a contribution.
The production of environmental goods encompasses a wide variety of areas, including equipment for air pollution control, management of solid and hazardous waste and recycling systems, soil and water remediation, renewable energy, heat and energy management, waste and water management, potable water treatment, noise and vibration abatement, and environmental monitoring, analysis and assessment. This is an innovative sector, and a growing number of Australian firms are finding niche markets in several overseas markets, using cutting-edge technology and unique Australian innovation.
The negotiations will focus initially on the APEC list of 54 environmental goods agreed by APEC Leaders in 2012 , and will be expanded to take into consideration rapidly changing technologies in the environment sector.
The negotiations are important in reinforcing the rules-based multilateral trading system by: being open to all WTO members; extending tariff elimination to all WTO members; and only coming into force when a critical mass of global trade in the relevant goods is covered. They have brought together WTO Members which account for 86 per cent of global trade in environmental goods. The agreement will be open to any other countries sharing the ambition to promote free trade in environmental products. Its successful launch highlighted the value of a major group of economies working together to further liberalise trade.
The Department of Foreign Affairs and Trade (DFAT) is inviting submissions (see Departmental media release) as input into these negotiations. DFAT is also seeking comments on products Australian industry would like to have covered in the agreement in addition to the 54 items already identified (see above). Submissions can be lodged at firstname.lastname@example.org.
A pro-forma is attached [DOCX 30 KB] | [PDF 82 MB] to assist those who wish to make focused submissions on product coverage for the agreement. The information provided in the proforma will be treated on a strictly commercial-in-confidence basis. It would be helpful if information could include detailed description of products, their tariff numbers, and environmental uses and benefits.
Submissions will be made publicly available on the DFAT website unless otherwise specified.
Free Trade Agreement Policy and New Issues Section
Office of Trade Negotiations
R.G. Casey building
John McEwen Crescent
Barton ACT 0221
Phone: + 61 2 6261 1537
Fax: + 61 2 6261 2927