Areas of debate
The latest round continued negotiations on sensitive products proposed for inclusion in the list, as well as issues relating to approximately 100 ‘ex-outs’ nominated for inclusion in the EGA.
Ex-outs’ are national tariff codes built off more general descriptions of goods provided by the World Customs Organisation’s Harmonised System (HS) tariff lines. They describe specific products or product groups that are particular to individual countries with a level of detail not captured by HS codes.
The debate over competing ‘ex-outs’ suggests that negotiating parties are approaching the task of finalising the environmental goods list with care, in order to ensure that these are indeed beneficial to the environment.
The compiled list of EGA product nominations has not been officially released. But in September 2015, an environmental organisation ‘leaked’ a product nomination list from the EGA negotiations in April and questioned the ‘greenness’ of approximately 100 goods on the list.
Some sources say that these controversial nominations have since been dropped from the ‘final draft list’. Indeed, many of the products included in the April list were criticised due to the potential for certain manufacturing products (general electronic hardware) to be used in non-environmentally friendly ways. The response has been to use ‘ex-outs’ that single out specific products within tariff lines so that non-environmentally friendly products are unable to benefit from the tariff cuts.
Another issue reportedly deals with the relationship between the current EGA list and the APEC Environmental Goods List on which it is based. Although the EGA list appears to be significantly longer than the 54 products in the APEC list, some negotiating parties have pointed to the fact that the inclusion of a products on the APEC list obliges parties to lower such tariffs to 5%.
In this regard, some negotiating parties are concerned with the full elimination of duties on the tariff lines identified in the APEC Environmental Goods List, arguing that lowering tariffs to zero was not the original objective of the EGA.
Nevertheless, this raises the question of whether additional or alternative approaches would be more effective in securing the EGA’s over-arching goal of combating climate change. Though the nomination process and relevant criteria (if any) for product eligibility have remained opaque throughout the EGA talks, reports indicate that ‘environmental credibility’ has been the key consideration in agreeing on which goods to include.
In addition to the use of ‘ex-outs’, negotiating parties could have considered relying on already-established certification schemes and oversight bodies, such as those used in the oilseeds sector.
Such an approach could ensure that goods included in the provisional list that were criticised, such as biodiesel, are included if sourced sustainably. As a result, ‘green’ commodities such as sustainable palm oil, soybean and sugar could rightfully be covered by the agreement.
Although it is unclear whether such goods will be included in the final version of the EGA, given that the negotiating parties intend for the EGA to be a ‘living agreement’, there may still be opportunities in the future for WTO member-states (like Argentina, Brazil, Indonesia and Malaysia) with a genuine interest in the relevant commodities to influence the list of goods covered.
