Last Thursday, November 20, GBD joined with the National Association of Manufacturers in hosting a public discussion of the Environmental Goods Agreement, EGA, now being negotiated in Geneva.
Jennifer Prescott, Assistant USTR for Environment and Natural Resources, was the first government speaker. In her opening remarks, Ms. Prescott took the audience through the history of these talks and underscored their importance to the United States, to the 13 other countries that are currently part of this plurilateral negotiation, and to the WTO as an institution.
Today's quote is from something she said during the closing segment of the event, in the back-and-forth of Q&A. We'll return to that exchange in a moment. First, however, it is worth recalling some of what Ms. Prescott said about the events that up to the current negotiations, specifically that in:
2011. The U.S. hosted its APEC partners in 2011 and used the opportunity to urge them to move forward on liberalizing trade in environmental goods. That work is reflected in the statement of the APEC leaders at their 2011 meeting in Honolulu. The essential commitment of the twenty-one APEC economies was to reduce tariffs on environmental goods to no more than 5 percent. At that point, however, APEC had not yet finalized an agreed list of such goods.
2012, APEC produced its list of 54 environmental goods, and it is that list which is the basis for the current WTO negotiations.
2013. In June, the Administration issued
The President's Climate Action Plan, and liberalizing trade in environmental goods is an integral part of it. The plan states, for example, that
"The U.S. will work with trading partners to launch negotiations at the World Trade Organization towards global free trade in environmental goods, including clean energy technologies such as solar, wind, hydro, and geothermal."January 2014. On the margins of the World Economic Forum in Davos, the United States and 13 other WTO members agreed to launch the negotiations called for in the President's action plan. The countries/economies that agreed to participate are:
Australia Canada
China Costa Rica
European Union Hong Kong
Japan Korea
New Zealand, Norway
Singapore Switzerland
Taiwan The United States
July 8, 2014. The WTO members participating in the EGA talks held their first round of negotiations in Geneva.
REGARDING THE PRODUCTS. As we have noted, the goal of these negotiations is to eliminate tariffs on a list of products, beginning with the 54 tariff lines identified by APEC as covering environmental goods. That list will change. The countries involved expect it to expand, and certainly some of those who will be affected, like NAM and its members, want to see products added.
But this is a delicate area.
Simon Newnham, Minister-Counsellor for Trade at the Australian Embassy and a speaker last Thursday's discussion, said it is important to ensure that the products on the EGA list are credible as environmental goods. If you can maintain that credibility, he said, "You do add a different set of stakeholders," and the "flavor of the negotiations" is different.
One member of the audience went further, suggesting that as technology advances, older environmental goods should perhaps be taken off the list.
But there was a question in the opposite direction as well. The editor of these pages posited this hypothetical. Suppose a group of countries accounting for 90 percent of the trade in a particular set of products were to agree to eliminate tariffs on those products. Should that opportunity be shelved because the goods have not been classified as environmental goods, notwithstanding the WTO's clear preference for more open trade?
Ms. Prescott was responding to that question when she gave the answer highlighted above. Here is her full response:
"I think that is exactly right, what Simon said. Environmental credibility is important because of, you know, the additional supporters and interest groups that you're able to bring into a negotiation like this, which is not, traditionally, of their interest.
"But also, I think you're making an important point, which is: This is the WTO, and as trade negotiators, we should be erring on the side of liberalization in the choices that we make in terms of the products that are part of this agreement and where tariffs are eliminated.
"And I think this maybe comes into greatest focus when we are talking about some of those dual-use products that Simon mentioned, where pipes, for example, can be used lots of different places in lots of different factories and applications.
But if you think about wastewater treatment and a wastewater treatment plant and you've ever been to one: it's a lot of pipes. You couldn't possibly build a wastewater treatment plant without a lot of pipes.
"And so, I think it's important that we try to sort of narrow that down to the specific pipes that are generally used in wastewater treatment equipment and those types of things. But I think that's also where, in our view, you very much err on that side of greater liberalization. If it's dual-use, in some cases like that maybe all the better. Maybe that's a good thing from our perspective.
"But I think it's a case by case basis, and we are looking at it that way, but I think that we do have a responsibility to err on the side of trade and trade liberalization and economic growth and jobs, as well as environmental protection."
