Legislative Train: 6A A Balanced and Progressive Trade Policy To Harness Globalisation

LEGISLATIVE TRAIN 09.
2019
6A A BALANCED AND PROGRESSIVE TRADE POLICY TO HARNESS
GLOBALISATION
PLURILATERAL ENVIRONMENTAL GOODS AGREEMENT (EGA) [ ON HOLD ]
> MULTILATERAL AND PLURILATERAL TRADE AGREEMENTS WITHIN AND OUTSIDE THE WTO
FRAMEWORK
CONTENT
Background and state of play
The parties had hoped to finalise negotiations during the last negotiating round, which took place between 3 and 4 December 2016
with a view to finalising the talks in 2017, but failed to reach agreement on the outstanding issues following a submission of a list of
products by China at a late stage in the process. Notwithstanding the calls issued during meetings of the WTO Committee on trade and
environment by some participating members, the EGA negotiations have not resumed.
From July 2014 to December 2016, the EU sought to negotiate a plurilateral trade agreement to liberalise the trade in environmental
goods (EGs) with other WTO Members, including: Australia, Canada, China, Costa Rica, Chinese Taipei, Hong Kong (China), Japan,
Korea, New Zealand, Norway, Switzerland, Singapore, United States, Israel, Turkey and Iceland. During the 11th WTO Ministerial
Conference in Buenos Aires (December 2017) the issue of the EGA negotiations was raised and several delegations 'expressed support
for the timely resumption of negotiations'.
Environmental goods are goods that can contribute to environmental protection, climate action, green growth and sustainable
development. The Commission gives the following examples: energy saving products (e.g. insulating glass units); environmental
monitoring products (e.g. smart meters); environmental clean-up goods (e.g. oil skimmers); waste management goods (e.g. biomass
boilers); renewable energy goods; and products for water treatment. The main objective of the EGA is to make trade policy contribute
positively to environmental protection and climate change. Via trade liberalisation, the EGA is expected to boost trade in green goods
and help achieve the targets agreed in Paris in the 2015 Climate Agreement by providing cheaper access to green technologies
worldwide.
According to the Commission, in 2013, the EU exported €146 billion of EGs (totalling 9 % of EU total exports) and imported €70 billion
of EGs (totalling 4 % of EU imports). The sector is considered by the Commission to be extremely dynamic as it registered 20 % growth
rates in employment during the recession years (2007-2011) and currently employs 4 million people.
The final version of the Trade Sustainability Impact Assessment report on the EGA was published in March 2016. The assessment
showed that the potential economic and social impact in terms of volumes as well as on the price of energy would essentially be
1/4
positive.
Main negotiations issues
The following were the main outstanding negotiation issues:
• Scope of the agreement: the EGA negotiations cover only tariffs for certain EGs. Non-tariffs barriers (NTBs) and services have not
been considered. In its Council Conclusions, the Foreign Affairs Council of May 2014 emphasised the need to explore grounds for
addressing services and NTBs. Discussions in the EGA cover the inclusion of a review clause and of a work programme on NTBs and
services.
• List of goods covered: the EGA negotiations focus on reducing tariffs on a specified list of products. EGA negotiating countries
exchanged proposals for this list, ultimately nominating about 650 tariff lines as candidates for inclusion in the EGA. The treatment of
bicycles and bicycle parts is a contentious issue for the E. Following various talks and developments, the list of goods covered 304 tariff
lines at the end of 2016 (although no consensus was reached). Discussions covered the insertion of a periodic revision clause to
expand the list in the future.
• Scope of tariff reductions: the EGA wants to achieve duty-free status for the goods covered. The last talks centred on the staging for
liberalisation, as China in particular had raised concerns on full liberalisation for certain sensitive goods.
• EGA as an open agreement: a plurilateral agreement can create rights for non-Members on a Most-Favoured-Nation (MFN) basis
if its participants reach a 'critical mass', generally understood to be 90 % of world trade. If the concessions made by EGA members are
extended on a MFN basis to other non-participating states, the latter will be able to export duty free to the EGA markets under
conditions similar to other EGA partners. China is particularly concerned by these free-riding possibilities, as some major developing
economies (such as India and Brazil) are experiencing significant growth in this sector, but are not part of the talks.
In 2015, the Commission issued a report on the public consultations that took place in 2014. The Commission received 48
contributions; 73 % of respondents supported the initiative, 17 % were against and 10 % did not express an opinion. Those that were
against were in favour of across-the-board liberalisation as opposed to a sectoral approach. Their main problem was the definition of
a green good. The majority mentioned the following priority order: first eliminate tariffs on environmental goods, then reduce tariffs
and non-tariffs barriers, and, finally, liberalise services. The vast majority of respondents asked for a review mechanism in order to
update the list of goods and reflect technological changes and thus avoid negative effects on innovation.
Position of the European Parliament
The European Parliament has on several occasions mentioned its support for the EGA negotiations. In its resolution of 5 July 2016,
Parliament specifically asked the Commission to develop quantitative and qualitative criteria to identify 'green goods' within the
framework of the negotiations. It also called for the Commission to consider the inclusion of services in the EGA and to account for the
role played by antidumping duties, IP rights, financing programmes and national environmental policies.
LEGISLATIVE TRAIN 09.2019 6A A BALANCED AND PROGRESSIVE TRADE POLICY TO HARNESS GLOBALISATION 2/4

References
• European Commission, Report on the Public Consultation on the negotiation of the Environmental Goods Agreement ‘the green
goods initiative’, January 2015
• European Commission, Report from the 17th round of negotiations for an Environmental Goods Agreement (EGA), November
2016
• European Commission, Environmental Goods Agreement: Report from the 16th round of negotiations, October 2016
• European Commission, Report from the 14th round of negotiations for an Environmental Goods Agreement (EGA), July 2016
• WTO, Report (2017) of the Committee on Trade and Environment, WT/CTE/24, November 2017
For further information: Jana Titievskaia, [email protected]
As of 20 September 2019
Visit the European Parliament homepage on globalisation.
Visit the European Parliament homepage on climate change.
Visit the European Parliament homepage on clean energy.
RAPPORTEUR
Alessia Maria MOSCA
INTA
HYPERLINK REFERENCES
• http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_153033.pdf
• http://trade.ec.europa.eu/doclib/docs/2016/november/tradoc_155100.pdf
• http://trade.ec.europa.eu/doclib/docs/2016/october/tradoc_154996.pdf
• http://trade.ec.europa.eu/doclib/docs/2016/july/tradoc_154784.pdf
• https://www.wto.org/english/thewto_e/minist_e/mc11_e/documents_e.htm
• mailto:[email protected]
• http://www.europarl.europa.eu/news/en/headlines/priorities/globalisation/20170505STO73507/globalisation-how-the-
european-parliament-is-making-it-work
• http://www.europarl.europa.eu/news/en/headlines/society/20180703STO07129/climate-change-eu-measures-to-help-reduce-
the-impact
• http://www.europarl.europa.eu/news/en/headlines/priorities/energy/20180109STO91387/mitigating-climate-change-with-the-
eu-s-clean-energy-policy

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LEGISLATIVE TRAIN 09.

PLURILATERAL ENVIRONMENTAL GOODS AGREEMENT (EGA) [ ON HOLD ]

Main negotiations issues

The following were the main outstanding negotiation issues:

Position of the European Parliament

For further information: Jana Titievskaia, [email protected]

Visit the European Parliament homepage on globalisation.

Visit the European Parliament homepage on climate change.

Visit the European Parliament homepage on clean energy.

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