Last reviewed 26 February 2014
Eric Davies reports on the liberalisation of trade in “green goods”, following an announcement by the EU and other members of the World Trade Organization (WTO).
Announced at January 2014’s meeting of the World Economic Forum in Davos, the so-called Green Goods Initiative aims to eliminate tariffs on a range of goods and technologies that can help protect the environment and combat climate change.
From bamboo to biomass boilers, the definition of green goods covers a diverse range of goods and technologies, which have in common their ability to promote sustainable development by tackling air pollution, managing waste and generating renewable energy.
The Green Goods Initiative will initially be based on a list of 54 items compiled by the Asia-Pacific Economic Cooperation (APEC). Among the goods currently included on the list are:
bamboo flooring panels (bamboo has a short growing cycle and is therefore an environment-friendly construction product)
parts for biomass boilers
solar water heaters
gas turbines for electrical generation from recovered landfill gas
instruments for measuring the ozone layer and monitoring natural risks such as earthquakes and tsunamis
Water-filtering or purifying machinery and apparatus.
Although, in the first instance, it will be based on a limited range of goods, the countries behind the initiative aim to ensure that it will be able to respond to changing circumstances and technologies by creating a “living agreement” that can expand to cover additional products and services in the coming years.
The Green Goods Initiative seeks to establish an agreement at the WTO that will enable free trade in environmental goods. In the Green Goods Initiative statement issued at Davos, signatories expressed their conviction that: “One of the most concrete, immediate contributions that the WTO and its members can make to protect our planet is to seek agreement to eliminate tariffs for goods that we all need to protect our environment and address climate change.”
To be based on the established Most Favoured Nation concept, the Green Goods Initiative will be launched when enough WTO members agree to participate.
The Green Goods Initiative is expected to have a significant impact on developing countries, which should find it easier and cheaper to obtain environmental goods, services and technologies to help them tackle environmental issues that are often exacerbated by rapid urbanisation.
The move follows the WTO’s December 2013 Ministerial Conference held in Bali, Indonesia, which adopted a number of decisions focusing on the need to increase trade for developing countries.
In October 2013, the EU welcomed APEC’s intention to discuss at the WTO a proposal to reduce tariffs on selected green goods by the end of 2015. The EU’s support for the initiative was made clear by Trade Commissioner Karel De Gucht, who said: “The EU is firmly committed to promoting and liberalising trade in 'green goods and services'. All WTO members need better access to the goods and technologies that protect our environment and combat climate change. Today's commitment is an important trade contribution towards addressing key environmental challenges as part of our broader, ambitious, sustainable growth agenda.”
Between them, the countries committed to the Green Goods Initiative account for some 90% of world trade in green goods. In addition to the EU, the countries that signed the Joint Statement on Trade in Environmental Goods at Davos are: Australia, Canada, China, Costa Rica, Chinese Taipei, Hong Kong (China), Japan, Korea, New Zealand, Norway, Switzerland, Singapore and the USA.