Tariffs are not relevant when it comes to increasing trade in environmental goods and services. The main obstacles to getting trade moving in green goods is the host of non-tariff measures in place. That is the conclusion of Aaron Cosby of IISD in a two page briefing note in February.
“Primary among these (obstacles) are countervailing and anti-dumping policies (a fast-growing category in the renewable energy sector), weak intellectual property regimes and a host of non-trade policy variables to which investors are sensitive. Among these variables are national laws and regulations for employment of the technologies, tight financing and a lack of national environmental policies that create the demand for such goods”.
Cosby writes that any green goods agreement would face challenges to assess the items on the list of goods, performing three functions, listing, de-listing and revising.
An independent evaluation would be needed, but more fundamentally, the process would need a statement of objectives and a definition of green goods following from that objective.
“All multilateral environmental agreements that give special treatment (usually negative treatment) to certain traded goods start with a clear idea of what they are trying to achieve. This helps them define the class of goods to be covered (e.g., those species of plants and animals threatened with extinction). Although the WTO has been negotiating on environmental goods for over a decade now, it has no such objective or definition.”
“Are green goods those that are created in a green way (e.g., organic foods)? Are they goods that, in their use or disposal, perform better than most of their substitutes (e.g., efficient refrigerators, wind turbines)? Or are they goods whose purpose is environmental protection (e.g., equipment for monitoring pollution)?”
“In the worst-case scenario, no advisory body is created, no objective enunciated, and we are stuck ten years from now giving preference to last decade’s green goods, perversely tilting trade preferences away from the new goods that deserve them. Pity the future trade negotiators in that scenario, struggling to decide what constitutes a cutting-edge green washing machine”