Negotiations are expected to begin on July 7 in Geneva concerning the possible elimination of tariffs on a wide range of environmental goods. The negotiations, being led by the Office of the U.S. Trade Representative (USTR), provide an excellent opportunity for U.S. manufacturers, purchasers, and traders of environmental goods to provide comments and shape the proposed Environmental Goods Agreement (EGA). Squire Patton Boggs stands ready to assist companies with the opportunities outlined below.
Environmental Goods Agreement: Negotiations Set to Begin
The Obama administration notified Congress this spring that it would be joining with 13 other members of the World Trade Organization (WTO) – together accounting for 86 percent of global trade in environmental products – to negotiate an Environmental Goods Agreement (EGA). The first round of these discussions is now expected to begin July 7 in Geneva, Switzerland, during what promises to be an active time for international trade negotiations.
This announcement followed a 2012 decision by the Asia-Pacific Economic Cooperation (APEC) to cut tariffs on 54 environmental goods to five percent or less by 2015, and its list of covered goods now serves as the EGA’s starting point. Under the agreement, “environmental goods” are currently loosely defined as goods that are “needed to protect the environment and address climate change.” USTR has suggested that examples of such environmental goods include “solar panels, wind turbines and catalytic converters, among others.” Indeed, now is the time for companies to provide their input as to what should or should not be considered an “environmental good.”
The WTO’s EGA would be the next in a series of major trade agreements currently under negotiation, including the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP). The United States and 11 partners are currently finalizing the TPP, which brings together nations from across the Pacific Rim in what will become the largest trade agreement in history. The U.S. and European Union (EU) are at the same time negotiating TTIP, which aims to lower tariffs and harmonize regulatory requirements across the Atlantic. If successfully completed, the TTIP would surpass even the TPP in scope. Of note, the next round of meetings for chief TPP negotiators is scheduled for July 3-12 in Canada, and the next TTIP round is scheduled for July 14-18 in Brussels, Belgium. These agreements regularly seek stakeholder input. In continuing that practice, USTR hosted a public hearing on the EGA on June 5 where industry stakeholders provided input on the U.S. negotiating position, including what products should be covered. The EGA will be negotiated over a series of meetings, and stakeholders are encouraged to actively engage.
At the same time, the U.S. International Trade Commission (USITC) is continuing fact-finding missions related to the EGA. The first of these investigations examined the economic impacts of potentially related tariff cuts on the United States, and the resulting report is scheduled to be delivered to USTR on August 4. The second investigation is ongoing, and focuses on collecting trade information and estimates for specific environmental goods, producers, markets, and tariffs. USITC will continue to accept submissions on this investigation until July 1, and the report is scheduled for delivery to USTR on October 6.
The proposed EGA provides an excellent opportunity for U.S. manufacturers, purchasers, and traders of environmental goods to help shape the agreement. Negotiators will consider which categories of goods to include, and stakeholders may be able to provide helpful input on U.S. negotiating positions, including which goods should be included under the EGA.
Squire Patton Boggs has robust trade and environmental practices and can assist companies in evaluating and tracking negotiations to help determine their impact on companies and their products, as well as outline a path forward to address issues of concern as these negotiations take shape.