APEC Deal on Trade Environmental Goods to Kick Off?

Multiple sources say that an initiative aimed at liberalising trade in environmental goods could be announced by a small group of WTO members during Davos meet of 21 January. The plurilateral initiative would aim to build upon the momentum generated by the 2012 Asia-Pacific Economic Cooperation (APEC) deal on the same subject, where the 21 member economies made a non-binding commitment to reduce applied tariffs on a list of 54 environmental goods to five percent or less by 2015.

These goods in the APEC list are already face low tariffs, thus urging for the list of products to be broader.

Analysis shows that fully implementing the APEC commitment would reduce the overall simple average by only 0.8 percent. Nevertheless, for some goods and some countries, the tariff reduction would be significant.

Months of preliminary discussions have already taken place in Geneva among a group of members known as the Friends of EGS (environmental goods and services). To date, WTO members that have reportedly participated in these discussions include Australia, Canada, the EU, Japan, Korea, Norway, Switzerland, and the US.

China could be involved in such an initiative, given its large market, its status as a major producer of environmental goods, and its participation in the APEC pact. Beijing’s participation may not be part of the original announcement as such.

Others that may sign on include Costa Rica, Hong Kong, and Chinese Taipei. Some other names, such as Chile, Mexico, Singapore, and Turkey, have also been floated, though their participation has not been confirmed.