US, EU propose green goods accord at Doha

The US and the EU have jointly proposed priority action on climate change and energy security related technologies.

The US and the European Union have jointly proposed priority action on climate change and energy security related technologies as part of the Doha round negotiations on use of environmental goods and services.

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A proposed new environmental goods and services agreement (EGSA) in the World Trade Organisation (WTO) seeks removal of barriers to trade to a specific set of climate-friendly technologies with a higher level of commitment on the part of developed and the most advanced developing countries like India.

"WTO members have an unprecedented opportunity to address in a concrete and meaningful way the global environmental challenge of climate change," said US Trade Representative Susan C Schwab while announcing the proposal in Washington on Friday.

"By eliminating tariff and non-tariff barriers to environmental goods and services, particularly clean energy technologies, we can lower their costs and increase global access to and use of these important products," she said.

The joint proposal seeks to eliminate tariff and non-tariff barriers to environmental technologies and services through a two-tiered approach starting with a "first-ever in the WTO agreement on worldwide elimination of tariffs on a specific list of climate friendly technologies recently identified by the World Bank".

The second tier suggests "a higher level of commitment on the part of developed and the most advanced developing countries to eliminate barriers to trade across a broader range of other environmental technologies and an array of environment-friendly services."

The initiative was prompted by President George W Bush's initiative earlier this year to seek an agreement with major economies including India and China on a new international climate agreement, Schwab's office said.

Describing it as a groundbreaking proposal, White House press secretary Dana Perino said: "By eliminating these tariffs and non-tariff barriers to environmental goods and services - particularly clean energy technology such as solar panels, wind turbines, fuel cells - we can lower their costs and increase global access and use of these products around the world."

"This initiative is the result of the president's commitment earlier this year to work with nations to eliminate the tariffs and other barriers to trade and clean energy technologies, and we certainly celebrate that decision," she said.

US Commerce Secretary Carlos M. Gutierrez hailed the proposal as "a very important step that corresponds directly to the Doha mandate as well as the president's energy and climate change initiative". The initiative would provide mutually reinforcing benefits for the global economy and the environment, he said.

One of the Commerce Department's agencies, the International Trade Administration (ITA), led a Clean-Energy Technologies Trade Mission to India and China in April 2007 to promote American clean technology goods and services that can help improve the environment.

The proposal underscores the importance of liberalising trade in environmental goods and services in parallel by recognising, for the first time, how the market works in this sector how goods are bundled with services, USTR said.

For example, designing more energy efficient buildings can require consulting, design and construction services, as well as solar panels for heating.

Global trade in the environmental goods covered by the US and EU proposal totalled approximately $613 billion in 2006, and global exports of these goods have grown annually by an average of 15 per cent since 2000.

WTO members currently charge duties as high as 70 per cent on certain environmental goods, impeding access to and use of these important technologies.

USTR said a recent World Bank study on climate and clean energy technologies suggests that by removing tariffs and non-tariff barriers to key technologies, trade could increase by an additional 7-14 per cent annually.

A corresponding increase in use of such technologies and services could contribute importantly to global efforts to address climate change and energy security. The World Bank report also concludes that liberalising trade in these technologies could facilitate more high-end technology investment, it said.