Experts Say EGA Negotiations Unlikely at WTO, but APEC Could Advance Goal
Former U.S. negotiators for the Environmental Goods Agreement at the World Trade Organization say the collapse of talks in 2016 means trying again with the countries that are major players in solar panels, wind turbines and the like is not likely to be productive this year. Mark Linscott, former assistant U.S. trade representative at the WTO, said he thinks even getting the fisheries subsidies deal done in Geneva this year is “dicey.” He recalled that it seemed promising when a plurilateral approach was taken on EGA, and China, when it was in the rotating chair at the G-20 group of nations, it pushed for a ministerial statement on the EGA that said it had found a landing zone, and the countries would “aim to conclude ... an ambitious, future-oriented EGA that that seeks to eliminate tariffs on a broad range of environmental goods by an EGA Ministerial meeting to be held by the end of 2016.”
“Unfortunately, true to form, soon after the ink was dry on that ministerial statement, China basically upended the negotiations,” he said during a Washington International Trade Association webinar April 20 on environmental trade. Linscott said that if China isn't at the table, there's a free rider problem, but if they're in, “do we ever get to an agreement?”
Maureen Hinman, former director for environment and natural resources at USTR, who was in the 2016 EGA negotiations, suggested that an interim agreement, similar to the U.S.-Japan mini deal, could allow participating countries to lower or eliminate tariffs on environmental goods without doing so for Chinese exports.
Linscott said while the legality of that is not clear, it could “prompt healthy debate” on the Most Favored Nation tariff principle.
Panelist Vangelis Vitalis, New Zealand's deputy secretary for trade, said that the Asia-Pacific Economic Cooperation (APEC) organization will aim to expand its past list of 54 environmental goods assembled in 2012. While the APEC countries said they would either keep tariffs below 5% on that list, or cut the rates to meet that standard, by 2015, in 2021, the 19th of 21 countries complied with the voluntary agreement. That list included both goods designed to help countries meet carbon emissions goals and goods that are greener than some alternatives, such as bamboo flooring.
Sarah Thorn, senior director of global government affairs at Walmart, said her company is less interested in the EGA covering goods like bicycles and more interested in goods it needs to meet its carbon goals -- charging stations, nitrogen fuel for forklifts, low-carbon concrete, greener refrigerants. She said that even though Walmart sells a lot of bikes, “When you look at the EGA you don’t want an agreement that’s going to topple under its own weight.”
Vitalis said APEC wants to announce the list update by the end of the year, and also commit to regularly reviewing the list to see if more goods should qualify for the low tariffs. “We’re very anxious to avoid a protracted process,” he said, and he hopes the results can provide momentum in Geneva for a plurilateral EGA restart.
A webinar viewer asked why Walmart cares about environmental goods. Thorn said, “This is for us about supply chain resilience, supply chain sustainability. People are seeing the impact of climate change real time. Fires, tornados, hurricanes. People feel it very personally now, and they want to know what companies are doing.”