Environmental goods negotiations - APEC - Example

Environmental goods negotiations revisited

APEC recent initiative

By Mauricio López Dardaine

I have been writing a few days ago on this recent APEC initiative aimed at negotiating an updated list of Environmental Goods, in this same blog (you may find these comments by just scrolling down within this same site).

I want to be a little more specific here by taking an example out of the list itself, purely at random.  Our key comments can be found in these three notes, included in their respective places as the example develops, and we also include here for your quick review:

Note 5: Observe here the classical flaw of the various Environmental Goods Lists that have been set for negotiation during the last decade: if you take the SIX DIGIT Harmonised System Classification by itself, and even if you add the comprehensive “HS Code Description”, are you able to separate an actual “Environmental Good” from other “Steam or other vapour generating boilers…” meant for purposes different than the provision of environmental services”?

Note 7: It is only when you introduce ex outs at the level of local (or economic block) customs, such as in the case of “parts for biomass boilers [US]” that you begin to confine imports set for negotiation within the actual field of “environmental goods”. This welcome step , however, is only the beginning.

Note 8: To the best of our knowledge, what follows here [remarks / environmental

benefit] may be an excellent negotiating argument, but from the point of view of customs in the importing country, it adds little value. From the point of view of customs, you require a well defined ex out. The question customs is faced with, in the case of this example is: “Are parts of biomass boilers actually different from parts of boilers for other uses?” If the answer is yes, we have gone a long way towards having a good basis for honest negotiation on tariff rebate for the specific environmental good.

ANNEX C - APEC List of Environmental

Goods

[Vladivostok, Russia, 8 and 9 September, 2012]

NOTE 1: We are here altering the original column format in order to facilitate our analysis of this one example

Note 2: HS stands for Harmonised [tariif] System

Note 3: by ex-out one is referring to, as a general rule,  a more specific code description made at a local or economic block level

HS (2002):  840290

HS (2007):  840290

HS (2012):  840290

HS Code Description: Steam or other vapour generating

boilers (other than central heating

hot water boilers capable also of

producing low pressure steam);

super-heated water boilers. [Ca, J,

NZ, K]

Note 4: Ca: Canada; J: Japan; NZ: New Zeland; K: South Korea

Note 5: Observe here the classical flaw of the various Environmental Goods Lists that have been set for negotiation during the last decade: if you take the SIX DIGIT Harmonised System Classification by itself, and even if you add the comprehensive “HS Code Description”, are you able to separate an actual “Environmental Good” from other “Steam or other vapour generating boilers…” meant for purposes different than the provision of environmental services”?

EX-OUT /

ADDITIONAL Product

Specification:  Parts for 840219x.

[Ca, J, NZ, K, Au] Note 6: Au: Australia

Parts for biomass

boilers. [US]

Note 7: It is only when you introduce ex outs at the level of local (or economic block) customs), such as in the case of “parts for biomass boilers [US]” that you begin to narrow imports set for negotiation to the actual field of “environmental goods”. This step, however welcome, is only the beginning.

REMARKS / ENVIRONMENTAL

BENEFIT:

Note 8: To the best of our knowledge, what follows here may be an excellent negotiating argument, but from the point of view of customs in the importing country it add little value. From the point of view of customs, you require a well defined ex out. The question customs is faced with, in the case of this example is: “Are parts of biomass boilers actually different for parts of boilers for other uses?” If the answer is yes, we have gone a long way towards having a good basis for honest negotiation of tariff rebate for the specific environmental good.

Parts for the boilers for the production

of heat and power on the basis of

(renewable) biomass fuels. [HK]

Part for biomass boilers for the

production of heat and power on the

basis of renewable biomass fuels.

This product should be seen in

relation to HS840219, biomass

boiler. Biomass in

heating systems uses

agricultural, forest, urban and

industrial residues and waste to

produce heat and electricity with less

effect on the environment than fossil

fuels. This type of energy production

has a limited long term effect on the

environment because the carbon in

biomass is part of the natural carbon

cycle. [S, BD].

*     *     *

LET ME ADD PART of ICTSD's "BRIDGES" ARTICLE on the same subject:

"... The topic of liberalising environmental goods and services has struggled to make headway within the WTO, a fact that leaders acknowledged at the gathering.
“Ladies and gentlemen, let me note that under the umbrella of WTO similar efforts have already been proceeding for over 10 years - and so far they have brought no results,” Russian President Vladimir Putin told reporters at the end of the summit. “Meanwhile, we were able to accomplish this list in just a few months, and this list of environmental goods was finalised during the meeting.”
While the APEC list is not tied to the WTO discussions, observers note that the conclusion of such a list might send a positive signal to the talks in Geneva.
APEC leaders are next expected to address non-tariff measures, trade sources say, as notifications of these by the group’s members have steadily increased in recent months; the regional grouping is also likely to work on building momentum toward liberalising trade in services..."