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New Initiative Aims to Eliminate Tariffs on Environmental Goods

Monday, January 27, 2014
Sandler, Travis & Rosenberg Trade Report

The U.S. and more than a dozen other countries announced Jan. 24 a commitment to achieve global free trade in environmental goods and to begin preparing for negotiations toward that goal. The participants said they anticipate a structure for this agreement that would reinforce the rules-based multilateral trading system and benefit all World Trade Organization members, including by involving all major traders and applying the most-favored-nation principle. A press release from the Office of the U.S. Trade Representative said the effort currently includes Australia, Canada, China, Costa Rica, the European Union, Hong Kong, Japan, Korea, New Zealand, Norway, Singapore, Switzerland and Taiwan, which together account for 86% of global trade in environmental goods, and that an agreement would take effect once a critical mass of WTO members participates.

USTR Mike Froman said this effort represents the kind of “fresh, credible approach” to trade negotiations that led to the conclusion of an agreement on trade facilitation and other issues at the WTO’s recent ministerial meeting in Indonesia. It will also build on commitments members of the Asia-Pacific Economic Cooperation forum have made to reduce tariffs on a list of 54 environmental goods to 5% or less by the end of 2015. Specifically, participants said they plan to explore “a broad range of additional products, in the context of a future oriented agreement able to address other issues in the sector and to respond to changes in technologies in the years to come.” The European Union added that while the negotiations will first focus on goods, the hope is to create an agreement that will “grow and evolve according to future needs, thereby making it possible to address other barriers to trade in green goods and services.”

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