Launch of the Joint Statement Regarding Trade in Environmental Goods

Annual Meeting of the World Economic Forum

Davos, Switzerland

Transcript, E&OE, proof only

24 January 2014

Ambassador Froman (USTR): Over the last two decades environmental issues have become increasingly important to the trade agenda, to trade agreements, regional agreements and at the WTO. We believe environmental issues are absolutely critical to broader efforts to liberalise trade, so I am excited to be here today with my colleagues to announce our continued commitment to liberalise trade in environmental goods.

On behalf of the US, I would like to make a couple of introductory remarks and then read a joint statement. Then I will ask some of my fellow ministers to speak on this issue.

President Obama announced his support for free trade in environmental goods as part of his climate action plan last year because he believes that by eliminating tariffs on renewable and clean energy technology we an make them cheaper and more accessible for everyone and support our efforts to combat climate change.

Global trade in environmental goods totals nearly a trillion dollars annually and some countries apply tariffs as high as 35 per cent. The countries here today launching this initiative represent 86 per cent of the global market in those products.

We were with many in this room today when we chaired the APEC Leaders' Meeting in 2011 to reduce tariffs on environmental goods, and our successful efforts in APEC have created momentum and a foundation on which we are committed to build. Our announcement here today is just the beginning and in the coming weeks and months we will be consulting closely with stakeholders, including our Congress, business and environmental communities, to ensure that such an agreement enhances our environmental objectives and supports economic growth, green jobs and innovation.

We look forward to working together and encourage others to join with us in a similar commitment to liberalise trade and environmental protection along the way. The door is wide open and everyone stands to benefit as we launch this initiative.

Here is the joint statement:

We, the representatives of Australia; Canada; China; Costa Rica; the European Union; Hong Kong, China; Japan; Korea; New Zealand; Norway; Singapore; Switzerland; Chinese Taipei; and the United States welcome Asia-Pacific Economic Cooperation (APEC) Leaders' agreement to explore opportunities in the World Trade Organisation (WTO) to build on its ground-breaking commitment to reduce tariffs on the APEC List of Environmental Goods by the end of 2015. So today, we announce our commitment to achieve global free trade in environmental goods, and pledge to work together, and with other WTO Members similarly committed to liberalization, to begin preparing for negotiations in order to advance this shared goal.

We are convinced 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.

We anticipate a structure for an environmental goods agreement that would reinforce the rules-based multilateral trading system and benefit all WTO Members, including by involving all major traders and applying the principle of Most Favoured Nation. Such an agreement would take effect once a critical mass of WTO Members participates.

Our work will build upon APEC Leaders' commitment to reduce tariffs on the APEC List of 54 Environmental Goods. APEC has given us a good start, and we are committed to exploring 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, that can also directly and positively contribute to green growth and sustainable development.

Building on the momentum created by the agreement reached in Bali, we strongly believe that this effort in the WTO will add impetus and energy to the multilateral trading system and support its mission to liberalise trade, and make a significant contribution to the international environmental protection agenda, including our shared efforts in the ongoing United Nations Framework Convention on Climate Change negotiations to combat climate change and transition to a green economy.

At this point I would like to welcome State Secretary, Marie-Gabrielle Ineichen-Fleische to give brief remarks.

Marie-Gabrielle Ineichen-Fleische (State Secretary of Switzerland): Thank you very much, Ambassador. On behalf of Switzerland, I am pleased to underline with this announcement today, our commitment to engage actively in the process of liberalising environmental goods, to take this initiative further in the WTO, thus reinforcing the multilateral trading system in an area with think is important in terms of sustainable development.

We are convinced that the availability of resource-efficient goods is a precondition for a green economy and we are also convinced that the liberalisation of environmental goods would not only contribute to the protection of the environment, but would also contribute to sustainable economic development.

In order to achieve this, Switzerland aims to a high level of ambition including a broad coverage of the products for tariff elimination, as well as the involvement of as many participants as possible.

We are committed to working together with all WTO Members who share the same objectives and I would therefore like to invite also those Members who are not yet in a position to support this initiative to join us in due course. Thank you very much and I give the floor to the Minister from Costa Rica.

Anabel Gonzalez (Trade Minister of Costa Rica): Thank you very much. Costa Rica is pleased to be part of this initiative. Environmental protection has been a priority in our national policy for many decades. We are convinced that sustainable growth can only be achieved hand-in-hand with environmental preservation, and we believe that the liberalization of environmental goods is an important element to promote the mutual supportiveness of economic development and environmental protection.

This will play a key role in facilitating access to environmentally friendly technologies, promote innovation and assist with the development of green economic activities. In our view, this initiative would bring about important gains for the multilateral trading system, both for the environment and for sustainable development. We encourage other WTO Members, especially developing countries, to participate in it. Thank you.

Mr Robb: Thanks, Ambassador. I think the case has very effectively been made by my three colleagues, I just - on behalf of Australia – would like to convey that we are very pleased to be a part of this commitment to achieve global free trade in environmental goods. From our perspective, this is the most concrete and immediate contribution that can be made to protect our planet. And you just have to look at the 86 per cent Ambassador Froman mentioned would be covered by this agreement. We are in a strong position and have an immediate opportunity to, in a very concrete way, do something tangible to protect our planet.

And the final point I would like to make is that this is a wonderful example of how a regional initiative in APEC can emerge and provide the basis for a multilateral initiative in the WTO. Thank you.

Mr Karl De Gucht (EU Trade Commissioner): I am delighted to launch this green goods initiative in the WTO today, because this ground breaking move is an important step towards globally eliminating barriers to trade in green goods and green technologies.

The EU is committed to creating a global green goods agreement; an agreement which would generate real benefits for trade and for the environment, including climate change. It will encourage innovation and respond to changes in technology.

This week the EU is launching its climate and energy package and the package sets out ambitious targets for greenhouse emission reductions by 2030. The green goods initiative that we are launching here today is an excellent example of how trade policy can help achieve these targets.

Our world faces a broad range of environmental challenges, which is why all WTO Members need better access and reduced costs to the goods and technologies that protect our environment, address climate change and facilitate the process of rapidly growing harmonization.

Our ultimate aim in this initiative is to remove tariffs on a broad range of products and we need to include the goods and technologies that are useful to tackle air pollution, to provide clean drinking water, to deal with waste management and to generate renewable energy based on wind, solar, hydro and biomass. We need to include all of these and even more so that we can have a real impact both on trade and on the environment.

Today's initiative is also a tangible and immediate response to the repeated calls from developing countries for better access to green technologies. Civil society, including the green industry worldwide, and including the emerging developing countries, has been a great supporter of this initiative.

But we do not want to limit ourselves to tariffs only. At some stage we also need to address other issues like non-tariff barriers and environmental services, because this will be a future barrier to agreements. If you want to produce wind energy, it is not enough just to buy the wind turbine. You also need to have access to the maintenance and engineering services necessary to keep it running smoothly.

From our perspective, in the post-Bali context, an ambitious agreement of this kind, which opens up the green goods market for all WTO Members, will bring multiple benefits. It will create real benefits for the multilateral system, it will strengthen the WTO and it will advance the Doha Development Agenda (DDA) mandate for removing tariff and non-tariff barriers to green goods and services.

We in the European Union look forward to working closely with all WTO Members who share our ambition for liberalising trade in green goods. It is important that such a global agreement gathers a critical mass of global participants, covering most of the world's trade. The more trading countries that are covered, the bigger the multilateral benefits we can jointly achieve by removing barriers to green trade. Thank you.

Moderator: Thank you. We will now take questions.

Paul Taylor, Reuters: My question is addressed to everyone, but I don't require you all to answer it. Journalistically, we have all these 'w's – who, where, what, why and when. I heard the answers to the first questions but not the 'when'. When do you expect such a free trade agreement in green goods to occur and to be up and running?

Ambassador Froman (USTR): We do not have a particular deadline in mind. This is the beginning of an initiative. We will now go through consultations, we will be working together to - as we have in other areas - begin that process and we will work as quickly as we can with each other to achieve the result. But there is no particular deadline in mind.

Ravi Khan, Washington Trade Daily: Any initiative to reduce tariffs in the WTO can be talked of in terms of reciprocity. A few of you sitting on this table, you have your environmental goods tariffs well below 5 per cent, while many of the countries where you are seeking this access will be having tariffs around 15 to 16 per cent. What would you actually be willing to pay these countries in terms of reciprocity, if ever this agreement was to get critical mass?

Mr De Gucht (EU Trade Commissioner): Between us, I believe we will get to zero. But that is also why you have a negotiation, because not everyone starts from exactly the same basis and if you want to get to a plurilateral agreement that covers most of the trade in the world, you will need some asymmetry for different categories of countries. But the aim should be that we get tariffs down as quickly as possible and what developing and emerging countries have realised is that, ultimately, this is even more to their benefit than it is to ours.

Asahi Shimbun (Japanese newspaper): Regarding the post-Bali context, I believe that in December in Bali, you all agreed to have so-called program work that could be done by the end of 2014. The joint statement could be a good way to move the multilateral negotiations forward. So, from a DDA context, how would you evaluate this so-called plurilateral process?

Ambassador Otabe, Japanese Permanent Representative to the WTO: First, liberalisation is good for trade. At the same time, the important thing is that this initiative is very good for the green economy because innovative technology is the key to tackle climate change issues and, in order for all Members to have innovative technology, they have to open up their markets. So, the opening up of the market is good for trade and to enhance the introduction of innovative technology, which will help reduce greenhouse gases. So this initiative should be considered in a much broader context.

DPA (German news wire): I have to insist on the timing question. You said there is no deadline, but maybe you can say it will take ten years, five years or one year. Give us a sense of your plans.

Ambassador Froman (USTR): It will be concluded when we reach an agreement. The substance of the negotiation has to determine the timeframe of the negotiation. Everybody here is committed to moving this forward as rapidly as we can and we hope that others join us as well. But, ultimately, the timetable will be determined by the nature of the negotiations.

Nikkei (Japanese newspaper): Looking into the progress of the Information Technology Agreement (ITA) and the role that China has played in it, may I ask the Chinese representative here today about your willingness to negotiate?

Mr Yu Jian Hua (Chinese Permanent Representative to the WTO): First of all, I am very happy to be here, joining the others in launching this initiative. It is a very important initiative for this group and very important for the WTO membership generally.

China has had a very positive and constructive attitude towards the liberalisation of environmental goods. As you might know, we played a very constructive role in the formation of the list in the work of APEC and we made a very serious decision here. We are looking forward to working closely with others to bring forward a balanced outcome of negotiations, so as to enhance multilateralism and contribute to the completion of the post-Doha package.

Ravi Khan (Washington Trade Daily): Ambassador Froman, I just met with the Indonesian minister who was also part of the APEC initiative and he said there was no agreement in APEC on the environmental goods. He said Indonesia is not part of this. Do you see any reason why some APEC countries are not coming to join this initiative?

Ambassador Froman (USTR): Well, I think this is the start here and we will obviously be working with other countries to bring them in. I would just refer you back to the November 2011 statement in Honolulu which talks about an agreement in APEC to reduce tariffs on a list of 54 environmental items to below 5 per cent and that is the agreement that we are referring to.

Ravi Khan (WTD): The Indonesian minister said that subsequently there was another meeting and at that meeting there was no agreement on an APEC goods list because items like palm oil were not included.

Ambassador Froman (USTR): There is an agreement on this from 2011, I think it was further reaffirmed in Vladivostok in 2012 and that's the list that we are referring to.

Mr Robb: I just want to make the comment about the G20 initiative and the relevance that it can have for what we've just announced here this afternoon. At St Petersberg last year it was agreed by all of the members of the G20 that they would at this year's G20, which Australia has the privilege of chairing later in the year, each country would identify a whole series of domestic initiatives that they intend taking to lead to sustainable economic growth.

Now, I think this agreed strategy that we are embarking on today shines a light on the relevance of environmental goods, practices and services to trade and to, of course, sustainable economic growth.

So I would just like to take the opportunity to encourage the members of the G20 to, when they are compiling this list of domestic initiatives, which will demonstrate the key elements of their growths strategies, that they look to incorporate a whole series of initiatives that will become very much central to the negotiations that will take place under this plurilateral agreement. Thank you.

Paul Taylor (Reuters): You can't put a deadline on it, but do you hope to see this achieved in the lifetime of the Obama administration? Yes or no?

Ambassador Froman (USTR): Yes.

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