Bridges Trade BioRes • Volume 5 • Number 20 • 11th November 2005

WTO ENVIRONMENT COMMITTEE DEBATES DRAFT TEXT FOR HONG KONG

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WTO ENVIRONMENT COMMITTEE DEBATES DRAFT TEXT FOR HONG KONG

WTO Members have been convening in informal meetings of the Committee on Trade and Environment Special Session (CTE-SS) to discuss proposed text to be included in the draft Ministerial Declaration of the Hong Kong Ministerial Conference in December. Discussions on the draft text brought out underlying divisions over how to identify and liberalise trade in environmental goods and services.

The latest draft text — proposed by CTE-SS Chair Ambassador Toufiq Ali of Bangladesh and discussed at a 9 November meeting — recognises the "significant work" undertaken in the CTE-SS under the Doha Declaration Paragraph 31 and calls on Members to "intensify work on all parts" of the mandate. With regard to the specific negotiating items, the draft text recognises the work undertaken on 31(i) on the relationship between WTO rules and multilateral environmental agreements and 31(ii) on information exchange between MEA and WTO Secretariat and the criteria for granting observer status. The draft text acknowledges that "more work has been undertaken" under Paragraph 31(iii) which mandates the "reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services", and calls for the intensification of these negotiations.

The parts of the text dealing with trade liberalisation of environmental goods and services (EGS) proved the most controversial. Members remain broadly divided into two camps over the approach to EGS liberalisation. One group dominated by developed and newly industrialised countries supports the so-called ‘list’ approach, which consists of listing goods earmarked for enhanced liberalisation. The second group which includes most developing country Members remains sceptical of the list approach, arguing that the lists submitted so far only contain goods of export interest to rich nations. The only alternative to the list approach that is seriously being discussed at this stage is the ‘environmental project’ approach put forward by India according to which tariffs on environmental goods and services that are being used in specific projects would be reduced or eliminated for the duration of the project (see BRIDGES Trade BioRes, 24 September 2005).

This divide is clearly reflected in the comments on the proposed text. List supporters have favoured a draft text that would encourage the creation of a list of environmental goods to be subject to tariff cuts negotiated in the Negotiating Group on Non-agricultural Market Access (NAMA). Thus, they have supported text that would call on Members to intensify work under Paragraph 31(iii) "with a view to identifying environmental goods and services". Going one step further, the US has called for environmental services to be omitted from the text and suggested to include an explicit reference to collaborating with the Negotiating Group on NAMA. The EU proposed a specific timeline for the negotiations, suggesting 1 March 2006 as the date when negotiations should be completed in the CTE-SS and outcomes handed over to the NAMA Group.

Developing countries, on the other hand, would like to keep the options for the approach and process open at this point. They expressed concern that the language proposed by the list supporters would prejudge the outcomes of the negotiations, effectively turning the environmental goods talks into a sectoral NAMA discussion. Thus, they supported language that would call for the intensification of work "based on shared approaches to fulfilling the mandate" and opposed the inclusion of specific timelines. They strongly resisted specific references to the NAMA negotiations, advocating keeping open the possibility of collaboration with other negotiating groups, such as those dealing with agriculture and services.

Developing countries have also been wary of references to the "information exchange sessions" that have been organised ahead of previous CTE meetings, including one session organised by the US and two sessions organised by the WTO Secretariat. During these sessions, Members — primarily representing the list supporters — made technical presentations outlining the benefits to developing countries of expedited liberalisation in the environmental goods that they proposed in their lists. Developing countries felt that these informal sessions — while generally useful for clarification purposes — had so far mainly served the list supporters by providing a forum for advancing the examination of lists. They expressed concern that mentioning the sessions would effectively formalise them as a part of the negotiating process.

At the end of the informal session, the Chair announced that he would circulate a new version of a draft text based on the discussions and consult again with Members as soon as possible. A new proposal from New Zealand to include a paragraph that recalls the broad support for negotiations on environmental services will also be addressed at that time.

ICTSD reporting.