Dodwell in SOM1 Moscow - Post 7

February 14, 2012

In Honolulu last November, APEC leaders gave instructions for officials to draw up a clear list of Environmental Goods and Services that would carry tariffs of 5% or less. So ABAC officials have dedicated themselves to a fascinating but inconclusive debate over the goods that would qualify to sit on an EGS list. It took an APEC official from Indonesia to remind all that APEC first tried to draw up an EGS list in 1995. Sobering thought. Experts from the World Bank, General Electric, Environmental Business International, Beijing Normal University and the International Center for Trade and Sustainable Development reminded us of how complicated it is simply to define an “environmental good”:

On the one hand you have UNCTAD’s definition: “Products which cause significantly less “environmental harm” at some stage of their life cycle than alternative products that serve the same purpose, or products the production and sale of which contribute significantly to the preservation of the environment.” Phew. 

By contrast, the OECD looks to “activities which produce goods and services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil as well as problems related to waste, noise and ecosystems.” Double phew!!

With these, and other definitions under discussion, it is hardly surprising officials have had difficulty drawing up a definitive EGS list. For our very-practical trade officials, there is the additional problem that for a good to be defined as an “environmental good” it will have to have its own distinct 6-digit “HS  code”. As our World Bank presenter noted: “There is no way of liberalizing energy efficient refrigerators separately from non-energy efficient refrigerators because both fall under the same HS code.” The argument boils down to agreements on new HS codes.

In an attempt to cut through the arguments like those over whether an electric car can have a separate HS code from a normal petrol-consuming car, the WTO has drawn up a possible list of 153 products to put on a low-tariff EGS list. This list was apparently whittled down from an original list of 450. The World Bank was in Moscow to tell us that they had identified 43 products that we could move ahead on without problems. Such fun and games.

ABAC’s own Takeshi Hajiro from ABAC Japan presented views from Japanese business – and very sensibly called for officials to build a larger list, which should include (for example) environmentally-friendly vehicles and energy-efficient electrical appliances. Let’s see if our officials can rise to the challenge. Drawing up an EGS list remains one of 2012’s key priorities, so for APEC’s Senior Officials, the pressure is on.

One is of ABAC Japan staffer Hajiro-san (first from the left) speaking at the Trade Policy Dialogue on Environmental Goods and Services.

The lobby of the Crowne Plaza (Moscow), everyone’s meeting point at the APEC SOM1 meetings.
[ Back ]