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Negotiations to Eliminate Tariffs on Environmental Goods Could Begin This Summer

Tuesday, March 25, 2014
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative notified Congress March 21 that the U.S. intends to enter into negotiations on a new trade agreement aimed at eliminating tariffs on a wide range of  environmental goods. This notification starts a 90-day consultation period after which talks may formally begin, although USTR notes that this will not happen until all of the other participants finalize their domestic consultation procedures as well. These participants include fellow World Trade Organization members 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.

A USTR press release notes that in 2013 the U.S. exported $106 billion of environmental goods, such as wind turbines, solar panels, and wastewater treatment technologies. Global trade in this sector is estimated at nearly $1 trillion annually, but some WTO members impose tariffs on such products as high as 35%.

USTR Mike Froman said earlier this year that the forthcoming negotiations will build on commitments that 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 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.”

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