Environmental goods: where do the dynamic trade opportunities for developing countries lie?

Environmental goods: where do the dynamic trade opportunities for developing countries lie?

Opportunities for trade in environmental goods

In support of ongoing WTO negotiations on trade liberalisation of environmental goods, this study seeks to review and clarify some of the key issues surrounding ongoing discussions and to provide trade data and analyses to assess developing countries’ current and potential performance in environmental goods trade.

Main findings from the study include:

  • data indicates that developing countries have significant export strength and potential, not only in environmentally preferable products, but in many manufactured and chemical goods used in the provision of environmental services as well
  • for many developing countries, this latter class of goods are found to comprise some of their most dynamic exports, which can be significantly expanded by trade liberalisation, particularly through increased South-South trade
  • for many others, trade liberalisation of environmentally preferable products may provide immediate gains needed to support rural economies and facilitate the integration of their small and medium sized enterprises into global supply chains
  • to provide gains for all countries – each with a unique production and export profile – the scope and spectrum of environmental goods targeted for liberalisation must be wide and selective, allowing developing countries to select a limited ‘best-fit’ subset of goods for their tariff reduction commitments within an eventual WTO agreement.

The balance of data of this study suggests that trade liberalisation of environmental goods can provide significant gains to developing countries and that it should be pursued. To capture dynamic gains, it is advisable that developing countries confidently pursue WTO negotiations with the provisos that an eventual WTO list of environmental goods be broad and contain a sufficient variety of goods to ensure all developing countries can achieve immediate export gains, and that liberalisation be selective permitting each country to choose from the WTO list a limited ‘best-fit’ subset of goods for its tariff reduction commitments.[adapted from author]