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> Negotiations on environmental goods and services
on MEAs/WTO relationship
and non-agricultural negotiations
change issues in WTO's regular work
Note: This webpage is prepared by the Secretariat under its own
responsibility and is intended only to provide a general explanation of
the subject matter it addresses. It is in no way intended to provide
legal guidance with respect to, or an authoritative legal interpretation
of, the provisions of any WTO agreement. Moreover, nothing in this note
affects, nor is intended to affect, WTO members' rights and obligations
in any way.
In the Marrakesh Agreement establishing the WTO, members established a
clear link between sustainable development and disciplined trade
liberalization — in order to ensure that market opening goes hand in
hand with environmental and social objectives. In the ongoing Doha
Round, members went further in their pledge to pursue a sustainable
development path by launching the first ever multilateral trade and
Aimed at furthering trade opening, a number of aspects of the Doha Round
have a direct bearing on sustainable development and can therefore
contribute positively to efforts to mitigate and adapt to climate
change. As well, WTO's regular work provides a platform for addressing
the linkages between trade and climate change.
Negotiations on environmental goods and services back to top
Liberalizing environmental goods
Under the ongoing negotiations on mutual supportiveness of trade opening
with the environment, WTO members are working to eliminate trade
barriers in the goods and services that can benefit the environment.
Facilitating access to products and services in this area can help
improve energy efficiency, reduce greenhouse gas emissions and have a
positive impact on air quality, water, soil and natural resources
conservation. A successful outcome of the negotiations on environmental
goods and services could deliver a triple-win for WTO members: a win for
the environment, a win for trade and a win for development.
Environmental goods can cover a number of key technologies that may
contribute positively to the fight against climate change. Reducing or
eliminating import tariffs and non-tariff barriers in these types of
products will reduce their price and make them more accessible.
Increased competition will foster technological innovation in areas
related to protection of the environment and combating climate change.
According to a recent World Bank study on trade and climate change,
elimination of both tariffs and non-tariff barriers to clean
technologies could result in a 14 per cent increase in trade.
To illustrate, the Intergovernmental Panel on Climate Change has
identified a range of mitigation and adaptation technologies that can
assist in the challenge of climate change. Many of these technologies
involve products currently being negotiated in the Doha negotiations.
These include wind and hydropower turbines, solar water heaters, tanks
for the production of biogas, and landfill liners for methane
collection. A submission by the European Communities and the United
States in December 2007 proposes to give priority in the WTO
negotiations to climate-friendly goods and to services linked to
addressing climate change. These climate-friendly products comprise
about one-third of the environmental goods already identified by a group
Liberalizing environmental services
In the negotiations on environmental services, WTO members are seeking GATS specific commitments on activities which may be directly relevant to policies aimed at mitigating climate change.
During the Uruguay Round, negotiations focused on sewage services, refuse disposal services and sanitation services, which are listed in the environmental services sector of the Services Sectoral Classification List (MTN.GNG/W/120). Other environmental services, which are commonly understood to be covered by the category “Other” in this list, attracted limited attention at the time. Among them, services such as “cleaning of exhaust gases” and “nature and landscape protection services” are directly relevant to climate change mitigation measures. Cleaning of exhaust gases includes emission monitoring and services aiming to control and reduce the level of pollutants in the air, whether from mobile or stationary sources, which are mostly caused by the burning of fossil fuels. Nature and landscape protection services entail various services aimed at protecting ecological systems as well as studies on the inter-relationships between environment and climate.
In recent years, these “other” environmental services have expanded as a consequence of increasingly demanding environmental regulations and have gained in prominence both from an environmental and economic point of view. They are supplied mainly on a business-to-business basis and offer niche markets for small and medium-sized enterprises. These services are now on the negotiating table and should offer good prospects for new GATS commitments.
Negotiations on MEAs/WTO relationship back to top
WTO members are currently discussing ways to ensure a harmonious
co-existence between WTO rules and specific trade obligations in various
agreements that have been negotiated multilaterally to protect the
environment. Given the present consensus in the international community
for multilateralism and concerted actions to combat climate change, the
importance of these negotiations aimed at a harmonious relationship
between trade and environment regimes cannot be overemphasized.
up to now, there has been no evidence of conflict between the trade and
environmental regimes, a successful outcome to these negotiations will
nevertheless reinforce the relationship between the two legal regimes.
The negotiators have drawn from national experiences in the negotiation
and implementation of multilateral environmental agreements (MEAs) at
the national level. They are seeking ways to improve national
coordination and cooperation in this respect. Such mechanisms may be
central to the success of climate change mitigation and adaptation
efforts undertaken at national and international levels.
Moreover, it is
clear from the rules of the WTO and the UN Framework Convention on
Climate Change (UNFCCC) that both regimes do not operate in isolation.
First, Article 3.5 of the UNFCCC and Article 2.3 of the Kyoto Protocol
provide that measures taken to combat climate change should not
constitute a means of arbitrary or unjustifiable discrimination or a
disguised restriction on international trade and should be implemented
so as to minimize adverse effects, including on international trade, and
social, environmental and economic impacts on other Parties. Moreover,
WTO rules leave sufficient policy space to accommodate under certain
conditions the use of trade measures to protect the environment.
At the inter-institutional level, members are also exploring ways of
enhancing information exchange and cooperation between the WTO and MEA
secretariats. Concrete elements are being discussed to improve or
complement existing practices and cooperation mechanisms. This
information exchange extends to participation in respective meetings and
also to the organization of information exchange sessions and joint
technical assistance and capacity-building activities. Cooperation is
already taking place between the WTO and climate change bodies. The UNFCCC participates in meetings of the WTO Committee on Trade and
Environment (CTE) and is an ad hoc observer to the Committee overseeing
the specific trade and environment negotiations (CTESS).The WTO
Secretariat attends UNFCCC Conference of Parties meetings.
Agricultural and non-agricultural negotiations back to top
Some benefits to climate change mitigation and adaptation, albeit
indirectly, may result from the
negotiations on agriculture and
market access for non-agricultural goods. First, the elimination of
tariff and non-tariff barriers and a reduction in agricultural support
in developed countries may lead to a more efficient allocation of global
resources and production.
Second, trade negotiations will lead to increased trade opportunities
for developing countries which could lead to important income gains for
these countries. Increased incomes may enable poorer countries to reduce
their vulnerability to the effects of climate change by investing in
irrigation, for example. In the longer term, the enhanced predictability
associated with WTO commitments from the Doha Round, and associated
monitoring and surveillance activities, could help to offset the less
predictable shifts in weather and productivity. This will ensure that
developing countries do not suffer disproportionately from the negative
impacts of climate change.
The challenge of climate change has also contributed to the development
of the biofuel sector, as many countries see that biofuels can assist
them in meeting their reduction commitments for greenhouse gas emissions
under the Kyoto Protocol. Since the production of biofuels is
concentrated mostly in the consuming countries, trade in biofuels is not
currently very significant. Trade in biodiesel tends to take place
between EU countries as production and consumption is currently
concentrated in the EU. However, trade in bioethanol has been growing
over the last few years, with Brazil emerging as the leading exporter.
Since 2000, 37 measures on biofuels have been notified by 20 WTO members
in the context of the Agreement on Technical Barriers to Trade.
HS classification of biofuels has implications on how WTO disciplines
apply to domestic measures aimed at these products. Until recently, both
biodiesel and bioethanol used to be traded as agricultural products. In
2005, the World Customs Organization decided to put “biodiesel” in
Chapter VI on “products of chemical and allied industries” (HS 382490).
Bioethanol is still traded under HS 2207 in Chapter 22 on “beverages,
sprits and vinegar”. Any outcome of the Doha negotiations on agriculture
and non-agricultural market access will apply to the biofuels sector.
Climate change issues in WTO's regular work back to top
The Committee on Technical Barriers to Trade (TBT Committee)
The TBT Committee provides an important forum to discuss technical
regulations adopted by governments to mitigate climate change. Technical
specifications and labelling requirements related to climate change are
not new to the WTO. Indeed they fall squarely within the disciplines of
the TBT Agreement which imposes, among other things, rules on avoidance
of unnecessary obstacles to trade and harmonization. In addition, the
TBT Agreement requires members to share information on technical
regulations that may have an impact on trade.
In recent years, a number
of product standards and labelling requirements targeted at energy
efficiency or emissions control were notified. The climate
change-related technical regulations discussed in the TBT Committee so
far appear to principally concern product requirements. Examples of
regulations discussed so far include: fuel economy standards for cars;
eco-design requirements for energy-using products; energy efficiency
programmes for consumer products and emission limit values for diesel
The Committee looks at climate change measures to ensure they do not
pose unnecessary obstacles to international trade, while still achieving
the legitimate objective of protecting the environment, and encourages
As for international standards, the International Organization for
Standardization (ISO) has adopted four standards (14064 — 1, 2 and
3:2006 and 14065:2007) that include requirements for quantification and
reporting of greenhouse gas emissions and reductions. These standards
are related to conformity assessment procedures and do not include any
product-specific requirements on emission levels.
An increasing number of private sector standards might include
production or labelling requirements, with the stated objective of
mitigating or adapting to the negative effects of climate change. Though
non-mandatory, they may affect market access conditions for a range of
The Committee on Trade and Environment (CTE)
The work programme of the Committee on Trade and Environment (CTE)
covers the main issues at the intersection of trade and environment. A
number of issues indirectly relating to climate change, such as the
environmental benefits of removing trade restrictions in the energy and
forestry sectors and the effect of energy efficiency labelling on market
access, have been discussed in the CTE. The Committee serves as an
incubator for ideas to advance the trade and environment agenda and is
the main gateway should members decide to explore further the linkages
between climate change and trade.
> The impact of trade opening on climate change
> Climate change and the
potential relevance of WTO rules