Objectives of Negotiations ► Economic benefit – promote dynamic efficiency in production and greater access to consumption of goods at lower prices ► Development benefit – addressing basic human needs in terms of Millennium Development Goals ► Environmental benefit – promote sustainable modes of production and consumption.
Para 31(iii) Mandate ► To negotiate on reduction or, as appropriate, elimination of tariffs and non- tariff barriers to environmental goods and services ► With a view to enhancing the mutual supportiveness of trade and environment. ► ► Mandate is essentially environmental- benefit oriented, and market access is a means to that objective; not the objective itself.
EG Negotiations Approaches List Approach – earlier discussion on the definitional aspects and now, on preparing the list. Definitions: Some definitions given; no agreement on a common definition. Bottoms-up approach preferred - carving out WTO list out of OECD / APEC lists. 9 submissions so far - all from developed countries Project Approach – by India
Problems with the “list approach” ► ► Dual and multiple use – 480 goods; e.g. electricity meters, heat exchangers, microwave ovens, etc. ► ► No synergy between goods and services – many environmental activities entail delivery of services. ► ► Too diffused to meet environmental objectives ► ► Appears basically to address only market access objectives. Most of the developing countries are net importers. Export from South to South only; imports are from North. This will affect SMEs, which are 60% of the industrial base. ► ► Always need to negotiate – changes the balance of rights & obligations ► ► Lack of technology transfer mechanism.
Problems of developing countries ► Though developed countries have average tariff of less than 5%, and developing countries around 25%, exports from developed countries are around 80% of the environmental goods. ► Any indiscriminate tariff reduction would increase the trade deficit of developing countries.
Export / Import Ratio for OECD and APEC list Source: UNCTAD Study
EG Trade Patterns of DCs ► ► Trade significance based on OECD/ APEC lists of EG is low. ► ► Export dynamics to developed countries is high. ► ► If EPPs are included, it brings some marginal improvement in EG trade pattern.
Environmental Project Approach ► Objective of the approach To bring trade liberalization to meet environmental and developmental goals To bring synergy between environmental goods and services. To address diversity in environmental standards. To bring common but differentiated responsibilities. To give policy space to national governments. Capacity building, technology transfer.
Environmental Project ► Any activity with a view to achieving environmental objectives ► Tariff concessions for goods used in the project for the project period ► Both public or private projects to be included ► Many countries already have something like this – e.g. India, Indonesia, China & Thailand.
Environmental Objectives Examples: Water management – drinking water or surface water Waste management – solid or soil Energy saving management Renewable resources – energy or water Industrial applications – energy saving management or devices, process optimization Land, air and water pollution clean up noise abatement Can include any other environmental objective.
Advantages of ‘Project Approach’ ► Integrates goods and services. ► Focused & direct – goals of environmental objectives ► Accommodates changing needs of global environmental requirements ► Positive measures ► Technology transfer – with the services. ► Does not affect market access schedules of the goods – does not lead to “zero-for-zero” sectoral NAMA negotiations ► Enhances mutual supportiveness of trade & environment. ► National flexibility and policy space available. ► Approach – need-based and objective oriented.