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Non-trade standards

Trade in environmental goods and services and sustainable development: domestic considerations and strategies for WTO negotiations

Liberalising environmental goods and services in the context of a strategic sustainable development policy

Authors: E. Claro; N. Lucas; M. Sugathan
Publisher: Trade and Environment , 2007

Recently, there have been WTO negotiations on environmental goods and services (EGS). This has raised concerns with many developing countries. They are notably worried about a possible inclusion of goods only vaguely linked to environmental protection and about the impact of WTO EGS rulings on their domestic industries. Key issues for WTO EGS negotiations are:

  • emphasising the negotiation's focus on the environment
  • reaching a common ground on what is an environmental good
  • product coverage, classification and technological evolution
  • market access
  • non-tariff barriers
  • broadening the export basket for developing countries
  • the effects of EGS imports on domestic industries and tariff-revenue
  • creating and enhancing domestic capacities
  • enabling technology transfer
  • building a 'broader sustainable development package’
Also, it remains controversial whether to use a list approach or to liberalise only those goods and services destined for designated environmental projects.

The paper argues that developing countries should liberalise EGS only in the context of a strategic sustainable development policy. A methodology for crafting an appropriate domestic policy framework is proposed. Within the WTO, GATS commitments should be arranged and supported by appropriate instruments such as:
  • a Sectoral Annex
  • an optional document such as an understanding or reference paper
  • schedule-based clarifications
However, solutions cannot be generalised and each country will need to find an individual approach to EGS.