There are some aspects in the World Trade Organisation (WTO) negotiations that do not catch the fancy of industry at large but hold the potential to spiral into a market access issue in the long run. One such aspect relates to the negotiations on environmental goods and services.
Negotiations in this area have been progressing over the years and there is now a critical mass of proposals on the table from different countries which will cover products and services that account for a sizeable part of global trade. At the special session of the Committee on Trade and Environment in Geneva in the first week of July, there was “solid progress”. The next round of negotiations is now slated for September/October this year.
While there is still no progress on the contentious issue of the approach to adopt for finalising these negotiations, some member countries of WTO seem to have responded to the chairperson’s request to identify products of trade interest to them.
Four specific proposals caught the attention of countries in the July meeting. These are proposals from Qatar and Singapore that identify specific tariff lines for environmental goods and products, a communication from Brazil on biofuels, and a joint proposal from Argentina and Brazil on special and differential treatment for developing countries.
The submissions by Brazil, Singapore and Qatar add to similar contributions by other countries, including Taiwan, while they remain outside the “Friends of Environmental Goods” group. The group comprises Canada, the European Union, Japan, South Korea, New Zealand, Norway, Switzerland, Taiwan and the US.
Singapore, for instance, submitted a list of environmental products in seven categories: Waste management, air pollution control, noise pollution control, wastewater treatment, environmental monitoring, analysis equipment, and renewable products & energy sources and energy-efficient products. Brazil and Qatar made submissions on fuels (natural gas and biofuels).
The joint proposal by Argentina and Brazil on special and differential treatment is of significance to countries like India since it raises the concern of providing larger time periods for developing countries to liberalise trade in environmental goods and seeks information from developed countries that want to export environmental products on the subsidies provided in producing those goods.
From an Indian perspective, industry has been opposed to the existing list-based approach where products are identified as environmental goods for tariff liberalisation or elimination. Industry in India has been of the view that there must first be an agreed definition of environmental goods and then goods should be qualified if they fit that definition.
While a definition-driven approach is logical, it is important for industry to closely follow the current proposals. India is already in discussions with like-minded countries like Brazil and Argentina on issues of interest.
A good amount of knowledgeable debate and discussion has already happened in the country on this issue and industry needs to take active interest in the negotiations since this is slowly turning into a market access issue, primarily for developed country members, as is evident from the list of countries in the “Friends of Environmental Goods” group and it seeks to mainly cover high-technology products. There would be several issues involved in the trade of high-end products like intellectual property rights or dual use which hurt developing countries’ interests, as has been pointed out by India and Argentina.
It is essential for WTO members to revisit paragraph 32 of the Doha Ministerial Declaration, which states that the Committee on Trade and Environment should pay particular attention to “the effect of environmental measures on market access, especially in relation to developing countries, in particular the least developed among them, and those situations in which the elimination or reduction of trade restrictions and distortions benefit trade, the environment and development”. The focus for now seems to be more on the third point of paragraph 31: It states that countries will agree to negotiations on “the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.
It is important to refocus on the ministerial objective since the current negotiations are being perceived as a way to enlarge the negotiations on market access for goods and not to protect the environment or help development as was originally conceived at Doha in 2001.
Perceptions differ among countries on what will help global environment. Therefore, indulging in a mercantilist approach of market access negotiations and not moving towards protecting the environment and aiding development may not yield the objective conceived at Doha.
The author is principal adviser with APJ-SLG Law Offices
