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The Negotiations on Environmental Services in the CTS - SS Workshop on Environmental Goods and Services for Developing Country Members WTO - 18 February.

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Presentation on theme: "The Negotiations on Environmental Services in the CTS - SS Workshop on Environmental Goods and Services for Developing Country Members WTO - 18 February."— Presentation transcript:

1 The Negotiations on Environmental Services in the CTS - SS Workshop on Environmental Goods and Services for Developing Country Members WTO - 18 February 2010

2 envserv/feb102 Negotiations on environmental services Two main aspects in the Special Session of the Council for Trade in Services: Definition and classification of environmental services Market access negotiations Undertaking new specific commitments on environmental services

3 envserv/feb103 Definition and classification of services under the GATS There are two reference instruments: Services Sectoral Classification List (W/120) UN Central Product Classification List (CPC) Members use the 1991 version (co-called CPC prov.) There is no compulsory classification system Members can use the classification system of their choice. In practice, most Members use a combination of the W/120 and the CPC prov. Important: classification instruments do not determine the scope of the GATS!

4 envserv/feb104 Environmental services in W/120 6.ENVIRONMENTAL SERVICES CPC prov. A. Sewage services 9401 B. Refuse disposal services 9402 C. Sanitation and similar services 9403 D. Other - -

5 envserv/feb105 Remaining CPC items Cleaning services of exhaust gases CPC 9404 Noise abatement services CPC 9405 Nature and landscape protection services CPC 9406 Other environmental services n.e.c. CPC 9409

6 envserv/feb106 Other environment-related services Moreover, other activities, found in various sections of the W/120, are relevant for the provision of environmental services and for the protection of the environment more generally, for instance: research and development services on natural science (CPC 851); engineering design services for the construction of sewage, industrial and solid waste treatment plants (CPC 86724); integrated engineering and project management services for water supply and sanitation works turnkey projects (CPC86732); testing and analysis services of chemical and biological properties of materials such as air, water, waste, soils (CPC 86761); construction services of water and sewer mains (CPC 5135).

7 envserv/feb107 Infrastructure ES Focus of negotiations during Uruguay Round Predominant role for public sector Public good characteristics Ex: cleaning of streets Prone to natural monopolies Special distribution or collection networks High capital investments But Trends towards delegation of certain tasks to private operators Private sector also represents an important market.

8 envserv/feb108 Non-Infrastructure ES Increasing importance to confront environmental challenges Climate change Rapid technological changes, more sophisticated technologies Niches for SMEs More prone to B2B relations But public authorities also buy these services.

9 envserv/feb109 Classification of ES: is it outdated? Debate among Members and several proposals EC proposal: Identifies 7 core subsectors classified according to environmental media (air, water, solid and hazardous waste, noise, soil, biodiversity, etc.) Breakdown is different than in W/120, but references to CPC prov. remain Main novelty: proposal to include a reference to water distribution service.

10 envserv/feb1010 EC Classification proposal 6A)WATER FOR HUMAN USE & WASTEWATER MANAGEMENT Water collection, purification & distribution services through mains, except steam & hot waterPart of Waste Water Services9401 6B)SOLID/HAZARDOUS WASTE MANAGEMENT Refuse disposal services9402 Sanitation & similar services9403 6C)PROTECTION OF AMBIENT AIR AND CLIMATE Services to reduce exhaust gases and other emissions and improve air quality9404 6D)REMEDIATION AND CLEANUP OF SOIL & WATER Treatment, remediation of contaminated/polluted soil and waterPart of E)NOISE & VIBRATION ABATEMENT Noise abatement services9405 6F)PROTECTION OF BIODIVERSITY AND LANDSCAPE Nature & landscape protection servicesPart of G)OTHER ENVIRONMENTAL & ANCILLARY SERVICES Other services not classified elsewherePart of 9409

11 envserv/feb1011 Classification debate: where are we? No consensus so far to modify the classification of environmental services in the W/120. Multilateral discussions are de facto suspended. But, new classifications are used in the market access negotiations by those Members interested in doing so.

12 envserv/feb1012 A Members obligations are defined by GATS and national schedules GATS provisions and its schedule of specific commitments

13 envserv/feb1013 Environmental services and modes of supply Mode 1 – cross-border supplyRemote monitoring and control of air pollution levels Mode 2 – consumption abroadSolid waste are treated abroad Mode 3 – establishment of commercial presence Subsidiary provides solid waste treatment services Mode 4 – presence of natural persons Foreign technician provides natural disaster assessment services

14 envserv/feb1014 How GATS schedules are structured

15 envserv/feb1015 Distribution of specific commitments across sectors (Number of WTO Members)

16 envserv/feb1016 Specific commitments on environmental services Members Sub-sector All Members Recently acceded Members Sewage services4920 Refuse Disposal4820 Sanitation5022 Other4921 NB: based on EC-12 Schedule

17 envserv/feb1017 Services market access negotiations 2001 Negotiating Guidelines: No a priori exclusion of any sector or mode of supply Starting point for the negotiations: current schedules Main negotiating method: request and offer approach Appropriate flexibility for individual developing country Members for opening fewer sectors, liberalizing fewer types of transactions Annex C of Hong Kong Ministerial Declaration: LDCs not expected to undertake new commitments Negotiating objectives (Modes/MFN exemptions/scheduling principles) Plurilateral request-offer negotiations

18 envserv/feb1018 The collective request on environmental services (1) Recalls that environmental goods and services were singled out in paragraph 31 (iii) of the Doha Declaration and notes that liberalized environmental services market benefits both exporters and importers of these services as well as environment and development Refers to the right to regulate: It is understood that liberalization in these sectors will not impair the ability of governments to impose performance and quality controls on environmental services and to otherwise ensure that service suppliers are fully qualified and carry out their tasks in an environmentally sound manner. In addition, as under current obligations, each WTO Member can establish, maintain, and enforce its own levels of protection, inter alia, for consumers, health, safety, and the environment.

19 envserv/feb1019 The collective request on environmental services (2) Sub-sectors included: CPC 9401 to 9409 Water distribution is not included Members can use the classification system of their choice W/120, EC proposal, etc. Stresses importance of undertaking commitments in related sectors Ex: construction, engineering

20 envserv/feb1020 The collective request (3) – Scope of commitments sought Modes 1 & 2 : request seeks full commitments. Mode 3: calls for ambitious commitments. Removal of barriers to commercial presence (e.g. foreign equity limitations, joint operation requirements, restrictions or requirements on types of legal entity for foreigners, such as joint venture). When exclusive rights exist, foreign suppliers should be able to participate in the supply of the service. Mode 4: Members are encouraged to schedule mode 4 commitments.

21 envserv/feb1021 Offers on environmental services 16 offers by developed and developing countries, involving all sub-sectors Several restrictions concern public networks. Some Members propose to redefine their commitments pursuant to a new classification.

22 envserv/feb1022 Services Signalling Conference – Report of the Chairman of the TNC (July 2008) Many indications of improvements were given across the range of environmental services, including: sewage services; sanitation services; refuse and solid waste disposal services; waste water management services; soil remediation and clean-up; environmental laboratory services; and other services related to air pollution control and noise abatement. In addition to expanding sectoral coverage, several participants were willing to expand the modal scope of their commitments, and to reduce or eliminate restrictions such as joint venture requirements and foreign equity limitations. Several participants expressed aspirations for new commitments on all modes of supply across the range of environmental services. A specific request was made for commitments on advisory services under mode 1.

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