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Contribution of Trade Opening to Access to Climate-Friendly Goods and Services Vesile Kulaçoğlu Director, WTO Trade and Environment Division WTO Side Event.

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Presentation on theme: "Contribution of Trade Opening to Access to Climate-Friendly Goods and Services Vesile Kulaçoğlu Director, WTO Trade and Environment Division WTO Side Event."— Presentation transcript:

1 Contribution of Trade Opening to Access to Climate-Friendly Goods and Services Vesile Kulaçoğlu Director, WTO Trade and Environment Division WTO Side Event at COP 16, 8 December 2010

2 31. With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on: (iii) the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services. a unique mandate with both challenges and opportunities... - improving access to green goods and technologies - delivering on the trade, environment and development dimensions of the mandate - overlap with other areas of the DDA

3 Discussions in CTESS : Individual lists tabled by 9 Members : proposals on alternative approaches (India, Argentina, Brazil) July 08: Work Programme Oct. 09: Revised Work Programme (new timelines) New submissions on identification of EGs of interest and other issues under mandate April 2007: 153-items list by proponents (potential convergence set) technical discussions

4 Identifying goods (product coverage) Responding to the mandate under 31(iii)... Determining treatment (modalities) Determining treatment (modalities)

5 Identification of environmental goods In the context of a list... (9 countries) In the context of requests and offers... (Brazil) In the context of the integrated approach... (Argentina) Flexibilities for DgC (S&D)

6 Group of Friends (potential convergence set): Japan Japan Chinese Taipei Chinese Taipei European Union European Union Korea Korea New Zealand New Zealand Canada Canada United States United States Switzerland Switzerland Norway Norway Other Members that have contributed with submissions: Argentina, Brazil, China, Colombia, Cuba, India,Peru, Philippines, Saudi Arabia, Qatar Argentina, Brazil, China, Colombia, Cuba, India, Peru, Philippines, Saudi Arabia, Qatar

7 Phase of Identification of EGs of interest (universe) is continuing – exercise started in 2005 with a list of group of 9 OECD countries with additional submissions in (Saudi Arabia, Qatar, Japan, Argentina, Philippines, Singapore) Phase of Identification of EGs of interest (universe) is continuing – exercise started in 2005 with a list of group of 9 OECD countries with additional submissions in (Saudi Arabia, Qatar, Japan, Argentina, Philippines, Singapore) Identification of environmental goods List of goods consolidated in Chairs Report to TNC (TN/TE/3/Rev.1 in December 2010 ) List of goods consolidated in Chairs Report to TNC (TN/TE/3/Rev.1 in December 2010 )

8 Examples of categories of goods mentioned Renewable energy (wind; solar; geothermal); Renewable energy (wind; solar; geothermal); Waste management (Solid and hazardous waste; waste water); Waste management (Solid and hazardous waste; waste water); Air pollution control; Air pollution control; Environmental technologies for conservation, monitoring, analysis and assessment; Environmental technologies for conservation, monitoring, analysis and assessment; Energy efficient products; Energy efficient products; Carbon capture and storage, gas flaring emissions reduction, efficient consumption of energy; Carbon capture and storage, gas flaring emissions reduction, efficient consumption of energy; Biofuels; Biofuels; Organic products. Organic products.

9 Link to Climate Change Argentina (2009): Liberalizing goods required in context of projects under Clean Development Mechanism. Japan (2009): Including energy efficient products that contribute to climate change mitigation (time bound concessions, not permanent). US-EC proposal (2007): Elimination of tariff and non-tariff barriers on list of climate-friendly goods and technologies on an accelerated timeframe by 2013 (43 items identified in World Bank study).

10 Some examples of overlap between different submissions... ArgentinaFriends - Wind turbines - Solar water heaters - Biogas production tanks - Methane collection liners Climate change focus Examples of goods that could be used in CDM projects:

11 No agreed definition or criteria (past work in OECD, APEC – defining by doing) No agreed definition or criteria (past work in OECD, APEC – defining by doing) Coverage: industrial and agricultural goods? Coverage: industrial and agricultural goods? Majority of goods proposed have multiple uses (not just environmental) Majority of goods proposed have multiple uses (not just environmental) Technical issues relating to tariff classification (ability to distinguish at border; use of ex-outs) Technical issues relating to tariff classification (ability to distinguish at border; use of ex-outs) Constant evolution of the technology (Review mechanism needed? one off exercise?) Constant evolution of the technology (Review mechanism needed? one off exercise?) Identifying goods/product coverage: Some challenges

12 Tariff cuts over and above what will be agreed in NAMA Group of 9 countries S&D treatment could take the form of: Lower rates of liberalization Lower rates of liberalization Different timeframe for the elimination of tariffs (i.e. longer implementation periods) Different timeframe for the elimination of tariffs (i.e. longer implementation periods) Additional flexibilities (e.g. product exemptions) Additional flexibilities (e.g. product exemptions)

13 Interested Members would draw their own individual list of goods to be liberalized on an MFN basis Interested Members would draw their own individual list of goods to be liberalized on an MFN basis Process of bilateral negotiationsProcess of bilateral negotiations Avoids one size fits all (not a unique set of products); more in line with Members individual goals and level of development Avoids one size fits all (not a unique set of products); more in line with Members individual goals and level of development Requests and offers (Brazil)

14 Integrated Approach (Argentina) 1- Agree multilaterally on categories of environmental activities to combat climate change; 2- In accordance with categories, identify climate change mitigation and adaptation goods that may be used in national projects; 3- Proceed to reduce/eliminate tariff and NTBs with respect to goods required in the context of projects under the Clean Development Mechanism (time bound)

15 Import barriers related to customs procedures, valuation of goods; Import prohibitions; Immigration procedures; Local content requirements; Lack of intellectual property rights protection.Import barriers related to customs procedures, valuation of goods; Import prohibitions; Immigration procedures; Local content requirements; Lack of intellectual property rights protection. Some Horizontal examples of NTMs but are these not already subject to the existing WTO Agreements Some Horizontal examples of NTMs but are these not already subject to the existing WTO Agreements Non-tariff barriers (NTBs) Need to establish mechanism to deal with NTBs specific to environmental goods Need to establish mechanism to deal with NTBs specific to environmental goods Addressing other issues under the mandate

16 Transfer of technology / TA/ S&D Not specifically mentioned in mandate; There is a WTO Working Group on Trade and Transfer of Technology established as part of Doha Work Programme Not specifically mentioned in mandate; There is a WTO Working Group on Trade and Transfer of Technology established as part of Doha Work Programme In CTESS: some information exchange on existing projects or activities to promote transfer of environmentally-sound technology; no specific/detailed proposal to date In CTESS: some information exchange on existing projects or activities to promote transfer of environmentally-sound technology; no specific/detailed proposal to date Addressing other issues under the mandate Argentina and Brazil call for developed countries to provide information to enable developing countries to better assess available environmentally sound technologies in a given field as well as to properly apply and manage them to suit their specific needs and priorities Argentina and Brazil call for developed countries to provide information to enable developing countries to better assess available environmentally sound technologies in a given field as well as to properly apply and manage them to suit their specific needs and priorities

17 Addressing other issues under the mandate Link to Services negotiations Environmental services are covered as part of broader mandate for Services liberalization (voluntary, request/offer basis) Environmental services are covered as part of broader mandate for Services liberalization (voluntary, request/offer basis) Members Proposals to revise current Environmental services classification Members Proposals to revise current Environmental services classification Environmental services relevant in context of environmental goods identification but negotiations following two separate tracks Environmental services relevant in context of environmental goods identification but negotiations following two separate tracks

18 Universe of EG Submissions October 2010

19 EG Submissions 6 Submissions (as of 1 September 2010): Submission by the 9 Members (Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Chinese Taipei and the United States): JOB(09)/132 circulated 9 October 2009 Submission by Saudi Arabia: JOB(09)/169 circulated 6 November 2009 Submission by Japan: TN/TE/W/75/Add.1 circulated 16 February 2010 Submission by the Philippines: JOB/TE/2 circulated 16 February 2010 Submission by Qatar: JOB/TE/4 circulated 14 June 2010 Submission by Singapore: JOB/TE/5 circulated 23 June 2010 HS2002 Classification used in Submissions: All submissions are based on the HS2002 classification. However, data of WTO Members from are recorded also in the HS1992, HS1996, and HS2007 classifications. To ensure maximum coverage, in this presentation HS6-codes from all 4 HS-Revisions have been used – thus, the number of HS6-codes per submissions are larger than the number of HS6-codes contained in the original submissions.

20 1 Friends (F): 195 HS6 3 Japan (J): 90 HS6 2 Saudi Arabia (S): 291 HS6 4 Philippines (P): 24 HS6 Universe of EGs: 514 HS6-Codes (Containing both original HS2002-codes AND corresponding HS1992,HS1996,HS2007-codes) 5 Qatar (Q): 20 HS6 6 Singapore (Si): 91 HS6

21 Overlap between Lists Example for a Quadruplicate: Gas Turbines / – two submissions (9M,P) only consider the use with bio-gas and landfill gas; two submissions (S,Q) also include use with natural gas

22 Saudi Arabia Friends 92 items in common Categories from Friends list with a high level of convergence are: - Waste water management and potable water treatment -Air Pollution Control - Heat and Energy Management - Noise and Vibration Abatement - Natural Risk Management 263 items (HS) used for: - Carbon capture and storage - Gas flaring emissions reduction - Efficient consumption of energy Some examples of overlap between different submissions...

23 WTO Nominal Exports (in Trillions of US$, 514 HS6-Codes, Source: UN Comtrade) ( : +217%) ( : +230%)

24 Share of EGs in WTO Merchandise Exports 2008 (in Trillions of $; 514 HS6-Codes; Data Source: UN Comtrade)

25 WTO Nominal Trade of EGs by Category (in Trillions of US$, 514 HS6-Codes, Data Source: UN Comtrade)

26 Top 15 WTO Exporters 2008 (in Billions of US$, Compilation List, 108 WTO Members available, Data Source: UN Comtrade)

27 Top 15 WTO Importers 2008 (in Billions of US$, Compilation List, 108 WTO Members available, Data Source: UN Comtrade)

28 Average Bound Tariffs 2009 on EGs (514 HS6-Codes, Data Source: WTO Integrated Database, TL-Weighted Averages)

29 Average Applied Tariffs 2009 on EGs

30 Percentage of Duty-Free Tariff Lines 2009

31 Average MFN Tariffs 2009 by Category (Data Source: WTO Integrated Database, TL-Weighted Averages)

32 Linkages with other areas of DDA negotiations (NAMA/Ag modalities) Linkages with other areas of DDA negotiations (NAMA/Ag modalities) Next Steps Further discussions needed starting with cross-cutting and development-related issues in parallel to the work on the identification of goods within categories Further discussions needed starting with cross-cutting and development-related issues in parallel to the work on the identification of goods within categories 30 November 2010 TNC meeting: 2011 a window of opportunity for the Doha Round negotiations 30 November 2010 TNC meeting: 2011 a window of opportunity for the Doha Round negotiations Trade and Environment negotiations will accelerate from 10 JanuaryTrade and Environment negotiations will accelerate from 10 January

33 Thank You

34 Trade Negotiations Committee (TNC) Negotiating Group on Market Access Negotiating Group on Rules Special Session of the Committee on Agriculture Special Session of the Council for Trade in Services Special Session of the Dispute Settlement Body CTE Special Session TRIPS Special Session GENERAL COUNCIL Para 31(iii)

35 Friends Philippines Renewable energy Renewable energy: PV cells; solar water heaters; towers and lattice masts for wind turbines; hydraulic turbines Heat and Energy Management Heat and Energy Management: heat exchangers to be used in RE systems Waste Management, Recycling and Remediation Waste Management, Recycling and Remediation: parts for biomass boilers; soot removers (air pollution control) 17 items in total, 16 of which are also contained in Friends list Some examples of overlap between different submissions...

36 Submissions identifying EGs of interest: - Friends (Job(09)/132) - Argentina (TN/TE/W/74) - Japan (TN/TE/W/75 and add.1) - Saudi Arabia (Job(09)/169 and add.1) - Philippines (Job/TE/2) - Qatar (Job/TE/4) - Singapore (Job/TE/5) - Brazil (JOB/TE/6) (Biofuels) Some overlaps with respect to products... State-of-Play under the Work Programme

37 Caveats Trade Data (UN Comtrade Database): Based on entire HS6-Lines Nominal US$ Values in Time Series using Current Exchange Rates (and not Purchasing Power Parity – Rates) Recording Errors and Evaluation Differences between reporting importing and reporting exporting countries Officially reported trade flows, when available, otherwise estimated via official reports of trading partners Tariff Data (WTO Integrated Database and ITC): Simple (Tariff-Line-Weighted) Averages that weigh all scheduled Applied MFN tariff lines equally – regardless of actual trade volumes Trade and Tariffs: HS-Concordance – All EG-lists apply the HS2002 Revision, which currently is only used by 23 Members. The concordance to other Revisions may be imprecise, since many codes have no one-to-one relationship with HS2007 and HS1996 codes. Developed, Developing, LDCs: All WTO Members are counted as Developing with the exception of Australia, Canada, the EU27, Iceland, Japan, Liechtenstein, New Zealand, Norway, Switzerland and the USA that are counted as Developed, and all LDCs, that are counted as LDCs

38 HS6-Codes per List (Containing both original HS2002-codes AND corresponding HS1992,HS1996,HS2007-codes)

39 Maximum Number of HS6-Lines per Category (Drawn from all HS6-Revisions: HS92,HS96,HS02,HS07) Environmental Technologies: 1. Carbon Capture and Storage Technologies (CCS), Gas Flaring Emission Reduction Technologies (GFR), Efficient Consumption of Energy Technologies (EC) 2. Cleaner or More Resource Efficient Technologies and Products (CT/P) 3. Energy Efficiency (EE) 4. Environmental Monitoring, Analysis and Assessment Equipment (M/A) 5. Heat and Energy Management (H/EM) 6. Natural Risk Management (RM) 7. Noise and Vibration Abatement (N/V) Others: 1. Environmentally Preferable Products based on End-Use or Disposal Characteristics (EPP) 2. Natural Resources Protection (NR) 3. Renewable Products and Energy Sources (RPE) 4. Other (OTH)


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