This spring, the Obama administration notified Congress that it would be joining with other members of the World Trade Organization (WTO) to negotiate a new agreement on trade in environmental goods. Following the announcement, the Office of the U.S. Trade Representative (USTR) on March 28, 2014, published a Federal Register notice requesting public comment on the initiative and noticing a public hearing on June 5.
Additionally, the U.S. International Trade Commission (USITC) has announced that it will be launching two fact-finding missions to investigate the effects of such an agreement, for which it will also welcome stakeholder submissions. The first will study the economic impacts on U.S. industries and consumers of potential tariff cuts related to such an agreement. The USITC will host a hearing on this topic on May 14, with all requests to appear due by May 6. The second investigation, on the value of U.S. imports and exports of environmental goods and their tariff rates in key foreign markets, will not include a public hearing. The USITC will accept written submissions for the first investigation by May 19 and by July 1 for the second investigation.
The United States is not alone in its interest in trade in environmental goods. Thirteen other countries, including China, the European Union, Australia and Japan – together accounting for 86 percent of the global trade in environmental products – have so far indicated their interest in negotiating lower tariffs for environmental goods.
In a recent letter to Congress, U.S. Trade Representative Michael Froman highlighted that WTO dialogue will “build on U.S. leadership in the Asia-Pacific Economic Cooperation [APEC] forum on environmental goods and maintain momentum in the WTO” with similar approaches to trade liberalization. Meanwhile, the APEC countries are currently working toward reducing tariffs on 54 goods, including wind turbines, solar panels, wastewater treatment technologies and air pollution control equipment, among other things.
Testifying before a Senate Finance Committee hearing on the 2014 U.S. trade policy agenda on May 1, Ambassador Froman again underscored the importance of U.S. leadership in ensuring high standards with respect to the environment and other areas in all ongoing trade negotiations:
[W]e need to take the field, we need to be at the table, we need to be engaged, we need to be showing leadership because as you point out, other countries aren’t waiting for us. They’re moving ahead without us and it’s not a static situation.
This potential trade agreement provides an opportunity for the United States and its trading partners to promote new and better technologies in clean energy and environmental sectors. Given that the negotiations are in such an early stage, and that they have garnered a flurry of interest in the United States and abroad, stakeholders now have a unique opportunity to get involved at the ground level on shaping the U.S. position in these negotiations, including which goods should be included.
Patton Boggs has robust trade and environmental practices, and can work with stakeholders to evaluate and track the status of negotiations, help determine the impact of these negotiations on stakeholder interests, and outline a path forward to address issues of concern as the negotiations take shape. For advice on environmental trade negotiations, please contact Frank Samolis.