Civil Society Dialogue on the Draft Final...

Civil Society Dialogue on the Draft Final Report Monday 1st February, 2016

TRADE14/D1/D16

Environmental Goods Agreement Trade SIA- Final Steering Committee

Project Team to present for feedback the Draft Final Report including results of stakeholder outreach activities

• Presentation of Final Report – Assessment of key barriers to trade in environmental goods and

services and potential impacts of liberalisation of trade under the Environmental Goods Agreement

– Feedback from stakeholder outreach

– Case study analysis

– Sectoral analysis

• Timeline for final phase of the project

• Feedback and discussion

Overview

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• Published online 20th December 2015

• Advertised via to stakeholder network of 1,496 people

• Since launch, our website has had 4,853 additional page views (total since March 2015: 35,470)

Draft Final Report

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Draft Final Report: Introduction

Introduction

Trade SIA as part of the three stage assessment process for international trade agreements

Three complimentary elements of this Trade SIA: 1. Desk research including interviews and input from senior

experts 2. Stakeholder outreach 3. Case study analysis

Key conclusions and policy recommendations

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Draft Final Report: Introduction

Research methodology

As the list of EGS was under negotiation throughout the course of the study, the project team based our study on primarily on two lists: The APEC EGs List (2012) and the Friend of Environmental

Goods List (2009) In addition, the econometric modelling conducted in house by

DG Trade included a list of goods that were in August 2015 under discussion in the EGA negotiations.

Complimentary studies that utilise other lists of EGs were referenced in the report.

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EGA history and modality

The WTO and the Environment

The adoption of the ITA “list” modality

Progress in APEC and Friends of EGs

Defining “Environmental Goods”

Environmental Services

Interactions with other multilateral and regional

agreements

Status of the EGA negotiations and next steps

Draft Final Report: Background

Background section:

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Potential socio-economic impacts of the EGA • Employment and wealth creation:

– Tariff barriers in the G-17 on product categories under discussion are already relatively low however important exceptions are driving up prices

– At the macro level, the potential effects of the EGA seem small ; however, could be significantly greater if adopted at a multilateral level.

• Impact on social welfare created by increased access to electricity, safe water, clean air and other resources

• Impact on Sustainable Development Goals (SDGs)

• Decent work impacts and CSR

Draft Final Report: summery of key conclusions

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Econometric modelling results (I): Potential impact of the EGA on volumes of trade in EGs

Scenario 1: List of around 160 subheadings



Potential increase in the value of trade of 1 per cent, or EUR 8 billion An increase in the value of trade among the G-17 of 1.3 per cent, or EUR 8 billion in trade is projected upon the conclusion of the EGA negotiations

Potential increase in the value of trade of 0.9 per cent, EUR 18 billion An increase in the value of trade among the G-17 of 1.2 per cent, EUR 17 billion in trade is projected upon the conclusion of the EGA negotiations

Potential increase in the value of trade of 0.9 per cent, or EUR 21 billion An increase in the value of trade among the G-17 of 1.2 per cent, or EUR 20 billion in trade is projected upon the conclusion of the EGA negotiations

Draft Final Report: summery of modelling outputs

*Modelling conducted at a HS6 level, therefore should be considered an upper bound of potential impacts.

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Econometric modelling results (II): Potential impact of the EGA on the price of EGs and energy




Projected to result in a decrease in the prices of related goods by 0.8 per cent (worldwide average)



*Modelling conducted at a HS6 level, therefore should be considered an upper bound of potential impacts.

Draft Final Report: summery of modelling outputs

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Potential environmental impacts of the EGA

• Depends on scope and coverage of the EGA

• Important systemic impacts

• Shows that environment worthy of its own trade agreement

• Impact on GHG emissions: 0,1 – 0,9% (Wooders, 2009). For China: minus 0,8%

• IMF: removal of fossil-fuel subsidies would reduce global carbon dioxide emissions by 13%


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Other benefits of the EGA

• GVCs: efficiency gains?

• Business interests (SMEs)

• - global alliance building

• - Mitigation of regulatory risk

• - Increased market volume and global scalability

• - Cash stays in local economy

• - Level playing field for open supply chains

• - Greater certainty and predictability


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Policy recommendations (I): 1. In order to maximise the economic and commercial effects

from the EGA, focus should be on achieving full tariff elimination

2. Establish an effective permanent negotiation mechanism to implement the “living agreement”

3. Work to eliminate NTBs that are detrimental to trade in EGs, while maintaining high environmental standards that encourage the development of sustainable technologies, as well as harmonising international environmental standards.

4. Inclusion of enabling environmental services to products being liberalised under the EGA


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Policy recommendations (II): 5. Establish a cooperation mechanism with the World

Customs Organization to ensure that future iterations of the HS nomenclature better reflect emerging and future environmental items

6. Cooperation with the TFA to consider EGA implementation issues for developing countries, in particular LDCs

7. Statement committing to the reduction of subsidies for conventional energy

8. Establish a 'roadmap' for the development of the EGA


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Southeast Asia regional workshop, Kuala Lumpur, Malaysia September 10th 2015

• 34 participants from 7 countries

Singapore Malaysia Indonesia

Vietnam Thailand Myanmar

Cambodia

Stakeholder type Number

Government 18

IOs 2

Industry 6

NGO 7

Academia 1

Government NGO Industry

IOs Academia

Country Number

Malaysia 15

Singapore 6

Thailand 5

Vietnam 4

Indonesia 2

Myanmar 1

Cambodia 1

Stakeholder engagement: regional workshops

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Latin America regional workshop, Mexico City, Mexico September 25th 2015

• 35 participants from 9 countries

Mexico Brazil Costa Rica Colombia

Jamaica Uraguay Chile Belize

Industry Government

NGOs IOs

Acedemia

Country Number

Mexico 18

Brazil 5

Costa Rica 3

Colombia 3

Jamaica 2

Uraguay 1

Chile 1

Belize 1

Guatemala 1

Stakeholder type

Number

Industry 18

Government 11

NGOs 3

IOs 2

Acedemia 1


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Workshop reports have been drafted and will be made available on the project website in the coming days.


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Elimination of tariff barriers facing environmental goods can contribute to their increased uptake, which will have benefits for many areas of environmental conservation and climate mitigation.

The EGA will create opportunities for stakeholders in developing countries (in particular SMEs) to participate more deeply in global value chains for environmental products.

The decentralised nature of renewable energy could encourage the electrification of remote and rural areas and contribute to providing access to sustainable energy for all (in line with Sustainable Development Goal 7).

The EGA will encourage the uptake of high-quality, imported products, creating business opportunities for local stakeholders, and providing greater options for business in choosing environmental products.

Workshop reports summery: potential opportunities of the EGA


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It is important to ensure that high-quality products are traded internationally

Good communication between developers and local communities should be maintained at all times

Potential customs issues should be resolved so that all stakeholders can fully benefit from the EGA

The harmonisation of environmental standards could be included in the EGA to even the playing field for all stakeholders

The framework and modality for the inclusion of future technologies needs to be further developed

Longer implementation periods for sensitive industries in developing countries may need to be considered

Summery: potential challenges for the EGA


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Stakeholder engagement

• Public meetings • Newsletters • March 25th meeting in

Beijing on investment • June 3rd Roundtable in

Brussels • Interviews

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• Website www.egatradesia.com has received 35,470 page views

• Linkedin Account has over 1,000 connections

• Twitter account has 132 followers

Online outreach

http://www.egatradesia.com/

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• 73 submissions

• Both the developed and developing world were well-represented,

• Respondents were involved in a variety of fields related to environmental goods, and worked in nearly every major environmental goods and services sector

Questionnaire

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Questionnaire reports is online, Annex III of the Draft Final Report

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Questionnaire feedback: Products which SHOULD be included:

Pipes

Rain water harvesting systems

Polyurethanes and polystyrenes for insulation

Paper products and machinery that helps to improve the efficiency of paper manufacturing

Water purification systems

Air quality assessment goods

Bioethanol and related products such as industrial sugar (Sugarcane ethanol)

Biomass

Nuclear technology

Chemical products belonging to HS chapters 28 – 39

Only final goods/end-products for an exclusive environmental use should be included

Bicycles and bicycle parts

Products which should NOT be included:

Biofuels and bioethanol

Wastewater management and water treatment facilities and services

Goods and services that have limited environmental impact

Bicycles and bicycle parts

Man-made fibres of chapters 54 and 55

Any product which is protected by anti-dumping measures

Nuclear technology

Goods without direct environmental applications

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Product Name HS Classification

Average of most recent MFN customs duties applied by G-17*

2013 MFN customs duty applied by Malaysia

Wall and roof insulation

HS 450410 (agglomerated cork)

2.2% 20%

HS 701931 (glass fibre)

3.1% 20%

HS 680610 (slag wool, stone wool)

2.8% 25%

Multiple walled insulating units of glass

HS 700800 3.9% 30%

Horizontal sunshading HS 392530 4.9% 20% R134a Chiller HS 841583 4.5% 15%

Case Studies

27 case studies under development, 20 drafts included in draft final report

Structure: 1. Product(s) background 2. Case study background 3. Tariffs and NTBs 4. Socio-economic impacts 5. Environmental impacts 6. Conclusion

HS code

Projected global price reduction from EGA

Projected global trade increase from EGA

680620 -0.5% 0.4%

741220 -1.2% 0.4%

840681 -2.2% 0.6%

841940 -3.0% 7.3%

842121 -0.7% 0.5%

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Case Studies

AIR POLLUTION CONTROL (APC) 1 Ceramic substrates and filters, China 2 Marine scrubbers

CLEANER & RENEWABLE ENERGY (CRE) 3 Solar Tuk-Tuks, Cambodia 4 Lake Turkana Wind Power Project, Kenya 5 Small solar lighting/ electrical equipment, Myanmar 6 Polysilicon for solar panel production, China 7 Small hydro, Colombia 8 Geothermal, Iceland

ENERGY EFFICIENCY (EE) 9 Heat pumps, Poland 10 Electric Motors with IE4 Standards 11 Building Energy Efficiency Project, Malaysia 12 Green Building Project, Milan Expo, Italy

ENVIRONMENTAL MONITORING AND ANALYSIS (EMAA) 13 Radiator thermostat, Poland 14 Emissions trading system, EU

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Case Studies

ENVIRONMENTALLY PREFERABLE PRODUCTS (EPP) 15 Renewable wood products, Finland 16 Coniferous Wood Products (wood pallets, plywood) 17 Bamboo flooring, Canada 18 Bioplastic, Italy

RESOURCE EFFICIENCY (RE) 22 Drip irrigation project, India 23 Sealing devices, Australia

SOLID AND HAZARDOUS WASTE TREATMENT (SHWM) 24 Medical and biohazard waste disposal, US 25 City wide recycling system, Germany

NOISE AND VIBRATION ABATEMENT (NVA) 21 Agglomerated cork for insulation, Portugal

ENVIRONMENTAL REMEDIATION AND CLEANUP (ERC) 19 Trawl net, Gulf region 20 Hydrocarbon sorbents for oils spill remediation, Australia

WASTEWATER MANAGEMENT AND WATER TREATMENT (WMWT) 26 Wastewater management and treatment facility, Israel 27 Desalination plant, India

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Case Studies

High efficiency irrigation that reduces inputs and improves outputs

Andhra Pradesh, a large province in southern India, initiated a program to encourage farmers to adopt drip irrigation systems to replace inefficient flood irrigation.

The program led to significant water savings, and large crop yield increases.

Many farmers significantly improved their economic positions as a result of the adoption of drip irrigation technologies and practices

Drip irrigation, Andhra Pradesh Micro Irrigation Project, India

HS

Code

HS Classification Detail Average

customs

Duty, G-17

Customs

Duty,

India

3917.39 391739 - Tubes, pipes

and hoses

3.2%* 10.0%

3917.40 Tubes, pipes and hoses

fittings

3.8%* 10.0%

8424.81 Mechanical appliances

(whether or not hand-

operated) for projecting,

dispersing or spraying

liquids or powders

2.4%* 7.5%

8481.10 Taps, cocks, valves and

similar appliances for

pipes,

2.4%* 7.5%

* average of the G-17, excluding Switzerland which charges a per unit-weight duty

HS code Expected Price reduction

Expected Trade Increase, EGA

3917.39 -1.2% 0.4% 3917.40 -1.1% 0.8% 8424.81 -0.6% 0.1% 8481.10 -1.1% 1.8%

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Case Studies

During the initial stage of the spill, booms could be deployed to contain the oil slick before its dispersal. A boom is a barrier, which generally extends above and below the water.

Hydrocarbon sorbents were used to break down the oil.

Oil spill clean-up, Pacific Adventurer incident, Australia


HS Code HS Classification Average

customs

Duty, G-17

Customs Duty, Australia

3909.50 Polyurethanes (hydrocarbon

sorbents)

2.2%* 5.0%

8413.60 Pumps for liquids 2.1%* 5.0%

8421.19 Filtering or purifying

machinery and apparatus,

for liquids or gases

1.7%* 5.0%

8907.90 Other floating structures (for

example, rafts, tanks,

cofferdams, landing-stages,

buoys and beacons)

2.9%* 5.0%



3909.50 -1.1% 0.7%

8413.60 -1.2% 0.6%

8421.19 -2.9% 1.8%

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Case Studies

Bamboo products, such as plywood made from bamboo and bamboo furniture, are good carbon reservoirs; the fast-growing nature of bamboo means bamboo groves capture significantly more carbon per acre compared to commercial forests.

The bamboo used in the project required only 0.02 per cent of the energy resources used by steel to obtain one unit of building material with an identical load capacity

Bamboo is also an excellent carbon sink, even better than forests

Bamboo flooring and panelling, LEED Platinum Building, Hamilton, Canada


HS Code HS Classification Average customs

Duty, G-17

Customs Duty,

U.S.

4418.79

Builders' joinery and carpentry of wood

2.2%* 3.2%

4409.21 Wood (including strips and friezes for parquet flooring, not assembled) … of bamboo

2.8%* 1.6% HS code Expected Price reduction


4418.79 -0.5% 1.4%

4409.21 -0.5% 0.6%

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Case Studies

Rural electrification with small hydro turbines and local grids, Rice Farms in Neiva, Colombia




4418.79 -0.5% 1.4%

4409.21 -0.5% 0.6%

In Neiva (Magdalena river valley), local farmers must

use diesel generators power pumps to irrigate their

rice paddies. A significant proportion of their income

must be devoted to this.

Smart Hydro initiated a project, using a 4 kW

hydroelectric generator, supplemented by solar and

diesel, to power the irrigation pumps for a remote

rice-growing community.

HS Code

HS Classification Customs Duty,

G-17

Customs Duty,

Colombia 8410.11

Hydraulic turbines … of a power not exceeding 1,000 kW

2.4%* 0.0%

8504.40 Electrical transformers, static converters

1.7%* 1.7%

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Lake Turkana wind farm, Kenya

Case Studies

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Draft Final Report: sectoral analysis

Value of trade globally in sector(s) Major import and export economies Trends: Projected future growth/development

of sector Drivers: What is driving growth in this sector

(including environmental policy and regulation) Sector coverage by the EGA – incl. potential ex-

out issues

Air pollution control (APC)

Cleaner and renewable energy (CRE)

Energy efficiency (EE)

Environmental monitoring analysis and assessment (EMAA)

Environmental remediation and clean-up (ERC)

Environmentally preferable products (EPP)

Noise and vibration abatement (NVA)

Resource efficiency (RE)

Solid and hazardous waste management (SHWM)

Wastewater management and water treatment (WMWT)

Innovation in sector, particularly eco-innovation Other issues and challenges Links to other sectors Sector overview – country-specific: value of trade

within country of focus, including key product lines (ex-out relevance), trends, innovation, domestic players, legal issues, policy initiatives, quantitative analysis, other issues and challenges

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Timeline and planning for final phase of the project

Phase 3

February Minutes of the Civil Society Meeting available online

February Workshop reports available online

March Final Report available online

March 3rd newsletter, following publication of final report

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Discussion and feedback

Contact the project team on: [email protected]

Website: www.egatradesia.com

mailto:[email protected]



http://www.egatradesia.com/

Civil Society Dialogue on the Draft Final...

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