Fourteen members of the World Trade Organization (WTO)—including the U.S., China, the European Union (EU), and Japan—on Tuesday launched negotiations to eliminate tariffs or custom duties on wind turbines, solar products, and other environmental goods.
The first phase of negotiations between the 14 WTO members, which make up 86% of the global environmental goods trade, seeks to reduce import tariffs to 5% or less by the end of 2015 for 54 environmental goods listed by the Asia-Pacific Economic Cooperation (APEC) forum in 2012.
Total global trade in environmental goods reached about $955 billion in 2012, though tariffs on some products are as high as 35%. Markets for goods related to energy efficiency, air pollution, water desalination, and renewable power equipment are set to grow sizably in the coming decades.
The second phase of talks will address non-tariff barriers, which the WTO describes as “bureaucratic or legal issues” that could cause “hindrances to trade.” They will also address environmental services.
The WTO members involved in the talks in Geneva, Switzerland, are Australia, Canada, China, Chinese Taipei (Taiwan), Costa Rica, the EU, Hong Kong China, Japan, New Zealand, Norway, Singapore, the Republic of Korea, Switzerland, and the U.S.
The negotiations are part of a broader task of agreeing by December 2014 on a work program to conclude the latest round of trade negotiations among WTO members. Launched in Qatar in 2001, the so-called “Doha Round” seeks to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules.
Disputes between countries that trade environmental goods—particularly wind turbines and solar modules—have grown thornier over the past five years, and several WTO members have launched legal actions to settle allegations of unfair subsidization and other disagreements.
Participants said the talks launched on Tuesday are open to any WTO member. “[T]he results will be applied in accordance with the most-favoured nation principle, under which WTO members should treat their trading partners in a non-discriminatory manner,” the WTO said.
The talks were applauded largely by organizations in the U.S. that support a reduction of trade tariffs. However, as the Coalition for Affordable Solar Energy’s president, Jigar Shah, noted on Wednesday, a broad trade agreement on environmental goods won’t address the current countervailing duty and anti-dumping solar trade cases at the Department of Commerce.
“Policymakers must not lose sight of the immediate harm to the American solar industry caused by new preliminary countervailing duties, which are raising module prices by 14%, jeopardizing projects across the country and slowing job growth,” he said.
—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)