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 World Trade Organization (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 (US Government estimate), and is expected to expand to around US$3 trillion by 2020. Examples of environmental goods include solar panels, wind turbines and water management technologies. Australia’s exports of 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. 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. Removing tariffs would help reduce costs for Australian industries and exporters, and give them better access to this significant and fast growing global sector. It will spur further Australian innovation and facilitate further investment in climate and clean energy technologies in Australia.
Eliminating tariffs would make environmental goods cheaper and therefore more accessible for everyone. This could make a contribution to improving quality of life by providing a cleaner environment and better access to safe water, sanitation or clean energy. This complements the Government’s broader efforts to promote green growth and sustainable development.
The production of environmental goods encompasses a wide variety of areas. The scope of the negotiations will 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.
The negotiating parties aim to build on the APEC list of 54 environmental goods agreed by APEC Leaders in 2012 , expanding this list to include additional goods which 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 around 85-90 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.
On 8 July 2014 the 14 WTO members who comprise the 'Supporters of Environmental Goods Agreement Negotiations' group released a 'Joint Statement Regarding the Launch of the Environmental Goods Agreement Negotiations.' The Statement marked the start of negotiations to reach agreement on the goods to be included for tariff elimination.
Three negotiating rounds have now been held. The first round, from 9-10 July, focused on setting the framework for the negotiations. At its conclusion, the parties produced an official statement summarising key outcomes. During the second round, from 22-26 September, the parties discussed a possible list of product categories of environmental goods, as well as 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. At the Third Round, from 1-5 December, the parties considered the wastewater management and water treatment, environmental remediation and noise and vibration abatement sectors.
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 1111
Fax: + 61 2 6261 2927