1 environmental goods: lessons from gatt and wto sectoral initiatives ronald steenblik oecd...

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Environmental Goods: Lessons from GATT and WTO Sectoral Initiatives

Ronald SteenblikOECD Secretariat (Trade Directorate)

WTO Workshop on Environmental GoodsGeneva, 11 October 2004

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Prior GATT or WTO sectoral liberalisation agreements & initiatives

1979 (Tokyo Round) Agreement on Trade in Civil 1979 (Tokyo Round) Agreement on Trade in Civil Aircraft (ATCA)Aircraft (ATCA)

1995 (Uruguay Round) Chemical Tariff 1995 (Uruguay Round) Chemical Tariff Harmonization Agreement (CTHA)Harmonization Agreement (CTHA)

1995 Uruguay Round “zero-for-zero” initiative on 1995 Uruguay Round “zero-for-zero” initiative on Trade in Pharmaceutical Products Trade in Pharmaceutical Products

1996 Information Technology Agreement (ITA)1996 Information Technology Agreement (ITA)

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Decision variables (1)

ParticipationParticipation Product coverage — by type or end use?Product coverage — by type or end use? Procedures and criteria for selecting goods, Procedures and criteria for selecting goods,

especially when:especially when: there is insufficient specificity at 6-

digit HS level; some goods have multiple end uses; sector includes “sensitive” products.

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Decision variables (2)

Modalities for liberalisation:Modalities for liberalisation: end level(s) of tariffs; timing and formula for tariff reductions; non-tariff barriers (NTBs)

Post-agreement institutions and procedures:Post-agreement institutions and procedures: to deal with unfinished business; to deal with “mistakes”; to expand product coverage; to address problem of moving targets?

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A comparison of the different agreements and initiatives

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Participation

Civilian AircraftCivilian Aircraft Initially 17 signatories Initially 17 signatories (among which (among which Commission of European Communi-Commission of European Communi-ties and 9 EU members);ties and 9 EU members); currently currently 2828

ChemicalsChemicals Initially 22 signatories (incl. CEC & Initially 22 signatories (incl. CEC & EU 15); currently over 30EU 15); currently over 30

Pharmaceutical Pharmaceutical ProductsProducts

Initially 22 participants (incl. CEC & Initially 22 participants (incl. CEC & EU 15)EU 15)

Information Information TechnologyTechnology

Initially 29 signatories (incl. CEC & Initially 29 signatories (incl. CEC & EU 15) — EU 15) — approx 90% of world trade approx 90% of world trade in covered productsin covered products; currently 63 (incl. ; currently 63 (incl. CEC and 25 EU)CEC and 25 EU)

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Product Coverage (1)

Civilian AircraftCivilian Aircraft All CA, as well as CA engines All CA, as well as CA engines and parts and components, all and parts and components, all components and sub-assemblies components and sub-assemblies of CA, and flight simulators and of CA, and flight simulators and their parts and components; their parts and components; mainly concerns HS chapter 88.mainly concerns HS chapter 88.

ChemicalsChemicals All of HS chapters 28-39, except All of HS chapters 28-39, except for a few items considered part for a few items considered part of the Uruguay Round of the Uruguay Round agricultural negotiations.agricultural negotiations.

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Product Coverage (2)


Active pharmaceuticals, their Active pharmaceuticals, their derivatives, dosage-form products, derivatives, dosage-form products, and chemical intermediates and chemical intermediates intended for the manufacture of intended for the manufacture of pharmaceuticals, mainly concerns pharmaceuticals, mainly concerns chapter 29 (Organic chemicals) chapter 29 (Organic chemicals) and 30 (Pharmaceutical products) and 30 (Pharmaceutical products) of the HS.of the HS.


Mostly products from Chapters 84, Mostly products from Chapters 84, 85 and 90 of HS. 85 and 90 of HS.

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Insufficient specificity at 6-digit HS (1)

Civilian AircraftCivilian Aircraft Not initially seen as a major Not initially seen as a major problem; some changes problem; some changes incorporated into later versions incorporated into later versions of the HS; others made into “ex of the HS; others made into “ex outs”outs”

ChemicalsChemicals Because coverage of Agreement Because coverage of Agreement is comprehensive, specificity is is comprehensive, specificity is not considered an issuenot considered an issue

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Any product classified in HS Any product classified in HS chapter 30 or in sub-headings chapter 30 or in sub-headings 2936, 2937, 2939, or 2941 is 2936, 2937, 2939, or 2941 is eligible for duty-free entry.eligible for duty-free entry.

However,However, because of insufficient because of insufficient specificity in other sub-headings specificity in other sub-headings of HS chapter 29, of HS chapter 29, notations notations (cross-reference to list) in (cross-reference to list) in national tariff schedules are national tariff schedules are required for other productsrequired for other products

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ITAITA Two specific lists (Annex A) negotiated with Two specific lists (Annex A) negotiated with many “ex outs”; participants expected to create many “ex outs”; participants expected to create sub-divisions in their national tariff schedules, sub-divisions in their national tariff schedules, and indicate these in schedules of concessions and indicate these in schedules of concessions for tariff reductions submitted to the WTO.for tariff reductions submitted to the WTO.

Another positive list (Annex B) Another positive list (Annex B) of products to of products to be covered by the ITA “wherever they are be covered by the ITA “wherever they are classified in the HS”; classified in the HS”; participants expected to participants expected to attach an annex to their schedules of conces-attach an annex to their schedules of conces-sions specifying the detailed HS headings for sions specifying the detailed HS headings for those products at either the national tariff line those products at either the national tariff line level or the HS 6-digit level. level or the HS 6-digit level.

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Decision tree: classification of non-specific goods

Go beyond harmonised tariff lines?

Across-the-board liberalisation

of all industrial goods

Liberalisation at 6-digit HS level only

Decisions on classificationhandled by WTO alone?

Countries agree to implement “ex-outs” at

national level

Countries refer classification issues to

World Customs Organisation (delayed

implementation)

Discussions take place to agree both descriptions and classification

Separate treatment of goods? no

no

no

yes

yes

yes

Go beyond harmonised tariff lines?

Across-the-board liberalisation

of all industrial goods

Liberalisation at 6-digit HS level only

Decisions on classificationhandled by WTO alone?

Countries agree to implement “ex-outs” at

national level

Countries refer classification issues to

World Customs Organisation (delayed

implementation)

Discussions take place to agree both descriptions and classification

no

no

no

yes

yes

yes

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Dealing with multiple end use

Civilian AircraftCivilian Aircraft Criterion of “essential character Criterion of “essential character of”, but also markings allowed. of”, but also markings allowed. How to distinguish civilian from How to distinguish civilian from military use remains an issue.military use remains an issue.

ChemicalsChemicals Not considered an issueNot considered an issue


Some products included if more Some products included if more than ½ of consumption is used for than ½ of consumption is used for finished pharmaceutical prodsfinished pharmaceutical prods


Some end-use distinction at the Some end-use distinction at the borderborder

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Modalities for liberalisation (1)

Civilian Civilian AircraftAircraft

Eliminate by 01.01.80 all customs Eliminate by 01.01.80 all customs duties and other charges; government-duties and other charges; government-directed procurement also banned. directed procurement also banned. NTBs eventually covered by NTBs eventually covered by Agreement on Technical Barriers to Agreement on Technical Barriers to Trade (TBT Agreement)Trade (TBT Agreement)

ChemicalsChemicals Tariffs to be reduced and harmonised Tariffs to be reduced and harmonised at a maximum level of 5.5% or 6.5% at a maximum level of 5.5% or 6.5% by 2004. by 2004.

NTBs (not addressed) dealt with by NTBs (not addressed) dealt with by TBT CommitteeTBT Committee

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Tariffs reduced to zero (on an Tariffs reduced to zero (on an MFN basis) to all WTO MFN basis) to all WTO members, without counter-members, without counter-concessions from non-concessions from non-participants, effective 1 participants, effective 1 January 1995.January 1995.

NTBs (not addressed) dealt NTBs (not addressed) dealt with by TBT Committeewith by TBT Committee

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ITAITA Tariffs on all products listed in the Tariffs on all products listed in the Declaration reduced to zero (on an MFN Declaration reduced to zero (on an MFN basis) by 01.01.2000, and all other duties basis) by 01.01.2000, and all other duties and charges bound at zero. (However, and charges bound at zero. (However, possible to extend implementation period up possible to extend implementation period up to 2005 for sensitive items.) to 2005 for sensitive items.)

NTBs in ITA were unfinished business; NTBs in ITA were unfinished business; work programme commenced in 2001. Many work programme commenced in 2001. Many NTBs identified so far.NTBs identified so far.

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Institutional and procedural issues (1)

Civilian Civilian AircraftAircraft

The The Committee on Trade in Civil Committee on Trade in Civil Aircraft Aircraft (“the Committee”)(“the Committee”) meets at least meets at least once — often twice — a year, to afford once — often twice — a year, to afford Signatories the opportunity to consult on Signatories the opportunity to consult on any matters relating to the operation of the any matters relating to the operation of the Agreement.Agreement.

There is also a Technical Sub-Committee There is also a Technical Sub-Committee of the Committee, which last met in 2001, of the Committee, which last met in 2001, mainly to discuss product coverage; and a mainly to discuss product coverage; and a Sub-Committee of the Committee, which Sub-Committee of the Committee, which last met in 1995. last met in 1995.

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ChemicalsChemicals Because coverage of Agreement is Because coverage of Agreement is comprehensive, and only deals with comprehensive, and only deals with tariffs, there has been no need to tariffs, there has been no need to create any new institutionscreate any new institutions

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Pharma-Pharma-ceutical ceutical ProductsProducts

No new Committee created at the WTO. No new Committee created at the WTO.

Negotiations on which new products to Negotiations on which new products to include in the Pharmaceutical Annex take include in the Pharmaceutical Annex take place among participants (i.e., outside the place among participants (i.e., outside the WTO), at least once every 3 years, on the WTO), at least once every 3 years, on the basis of:basis of: a list of a list of active pharm. and dosage-form active pharm. and dosage-form products (listed by their Int. Non-proprietary products (listed by their Int. Non-proprietary Names) provided by the World Health Org; andNames) provided by the World Health Org; and

lists of lists of chemical intermediates intended for chemical intermediates intended for the manufacture of pharms. the manufacture of pharms. suggested by suggested by industry.industry.

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““Participants to meet periodically Participants to meet periodically under the auspices of the Council on under the auspices of the Council on Trade in Goods to review product Trade in Goods to review product coverage.” Most work gets done by coverage.” Most work gets done by the the Committee of Participants on Committee of Participants on the Expansion of Trade in the Expansion of Trade in Information Technology ProductsInformation Technology Products. . Some informal consultations have Some informal consultations have taken place with the WCO over taken place with the WCO over classification issues.classification issues.

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Lessons

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Many ways in which sectoral initiatives have been designed …

Participation:Participation: plurilateral or multilateral

Product coverage:Product coverage: by product characteristic, function, end use,

or combination; wide or narrow Procedures and criteria for selecting goods:Procedures and criteria for selecting goods:

specificity expected to be reflected in amendments to HS, or agreed among participants with or without formal WTO involvement;

multiple use problem avoided ex ante or through “end-use” customs procedures (e.g., ATCA)

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… and implemented

Modalities for liberalisation:Modalities for liberalisation: Tariffs: to zero or to a small %; immediate or

phased over several years Non-tariff barriers: not addressed; addressed

separately (ITA), or delegated to TBT Committee (ATCA)

Post-agreement institutions and procedures:Post-agreement institutions and procedures: CTHA was simplest: no new institutions Others anticipated they had to periodically

review (with a view to expanding) product coverage

ITA and ATCA left unfinished business, which has proved to be considerable

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Where we are with EGs (1)

Participation:Participation: multilateral multilateral Product coverage:Product coverage:

so far by product characteristic or function, across many HS chapters

Procedures and criteria for selecting goods:Procedures and criteria for selecting goods: Specificity to be agreed among

participants with formal WTO involvement?

Multiple use problem to be avoided through ex ante decision criteria?

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Modalities for liberalisation:Modalities for liberalisation: Tariffs: to be decided Non-tariff barriers: not yet addressed, but

could be significant for some products Post-agreement institutions and procedures:Post-agreement institutions and procedures:

Will depend on outcome of above, but some procedure or institution will be needed for keeping product list(s) up-to-date.

Deal with NTBs separately or in TBT? How to maintain link with env. services?

Where we are with EGs (2)

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Thank you for your attention.

Questions?

1 environmental goods: lessons from gatt and wto sectoral initiatives ronald steenblik oecd...

Documents

digit hs level

hs participants

eu slide

hs chapters

covered products

issue slide

issue pharmaceutical

sensitive products