EU Trade Policy Contribution to Green Growth:The case for Free Trade for Clean Tech

Fabian DelcrosDirector, European Government Relations & Policy GE

European Parliament Hearing 20 March 2013

GE partner to EU clean renewable growth agenda

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In for over 100 years / Over 84,000 employees / €27 billion revenues

GE in Europe

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• Double R&D to $10B from 2010-2015

• Expand our focus beyond clean energy

• Grow 2x GE’s growth

• Reduce GE’s energy intensity by 50%

• Reduce water consumption by 25%

• Inspire a competitive energy future

Goals for 2015Our Progress in 2011

Tough competition : Market strongly influenced by GVT as customer, producers & regulatorsTough competition : Market strongly influenced by GVT as customer, producers & regulators

GE leader in green business

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Our Footprint

•1000 employees

•Manufacturing/Assembly

•GE’s 2nd largest installed base globally

•Tripled onshore market share from ‘09 to ’12

# 1 globally

GE wind in Europe

Export-driven green jobs

• Case: GE gas turbines business in Belfort1.800 jobs (total headcount)

Total exports: – worldwide (out of EU): 90%– APEC countries: 33,5%

EU clean tech:

• In the EU : 1.1 millions direct and indirect jobs (Eurobserv’er 2012)

• Growth lies in emerging countries: Ernst&Young report 2012 (quoted in Commission SWD 2012 on green jobs):

Since 2011, averaging year-on-year growth in renewable energy market- Europe and North America: 5%- Emerging markets: 13%

We are confronted with many trade barriers

Tariff Barriers worldwide

Gas turbines tariffsNigeria 10.0%Russia 10.0%India 7.5%South Korea 6.3%Canada 4.8%E.U. 4.1%China 3.0%U.S. 1.3%

Wind turbines tariffsMexico 10.0%China 8.0%South Korea 8.0%India 7.5%Russia 5.0%U.A.E. 5.0%E.U. 2.7%U.S. 1.3%

Source: EWEA, 2012

Gas Wind

Green ProtectionismNon-tariff barriers (NTBs) are on the rise!

Without an international approach there is a risk of national green protectionism through tariff barriers and NTBs.

Buy National

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Tariff Barrier

Tariff Barrier

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Local Content

Local Content

Local Content

Local Content

Tariff Barrier

Anti-dumping

Anti-dumping

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Buy NationalTariff Barrier

Buy National

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Local Content

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Increasing trade disputes• 6 ongoing WTO dispute settlements 2013 Feb: US vs. India (LCRs solar cells and solar modules) DS 456

2012 Nov: China vs. EU (FiTs and LCRs in IT and GR) DS 452

2012 Aug: China questions CVD by US on solar panels and wind towers DS 437

2010 Dec: US vs. China (subsidies for wind power) DS 419

2010/2011: two cases - Japan, EU vs. Canada (FiTs and LCR in Ontario) DS 412 and DS 426

• Dumping and CVDs/AD complaints 2013 Feb: EU solar glass manufactures complaint on dumping from China

2012: EU solar cell and panel manufactures complain about dumping from China

2012: China, AD and CVD investigation on polysilicon from US/Korea/EU

2011: US AD/CVD vs. solar cells (China) / wind towers (China, Vietnam)Source: WTO database, ICTDS

The RE market at a turning pointNew investments in clean energy fell by -11% btw 2011 and 2012

-> Need for legal predictability -> Decreasing public funding -> need to operate on bigger scale

Source: Bloomberg New Energy Finance, GLOBAL TRENDS IN CLEAN ENERGY INVESTMENT, 2013

What do we need ?

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Need efficient world market:0 tariff + disciplines

Free trade = a boost for clean techSource: World bank report 2008

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Possible Actions…

.. And Non-Tariff Barriers• Eliminate local-content requirements that distort EGS trade• Ensure that all government procurement policies pertaining to

environmental goods and services are transparent• Promote regulatory coherence /aligning approaches to standards

• Cap tariffs at 5% [now up to 35+%]

• Eliminate other restrictions on trade by 2015

• A 54 products list

Reduce tariffs …

APEC list $ billionsExports Imports

2011 336.1 321.6Growth rate (%) 18.9 16.1

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• EU is top exporter for the 54 APEC sub-headings: 35,5% of world exports

• EU engagement at zero costs: average applied MFN tariffs = 1.8 %

• APEC + EU exports reach 95% = critical mass to enshrine a plurilateral agreement in the WTO

From the APEC to a new WTO agreement?

APEC is moving ! EU needs to lead !

Source: WTO

16 /GE Title or job number /

3/21/2013

Explore multilateral, sectoral solutions

1. Boost green growth, jobs and exports

2. Disseminate technologies through market access

3. Mitigate climate change

Sustainable Energy Trade Agreement would serve three purposes at one time:

Triple Win !

Triple Win !

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Annex

Employment in Clean Tech • Worldwide: 5 million jobs (ILO)

• In the EU : for 1.1 millions (direct and indirect) jobs

Source: EWEA

A leverage for jobs in the EU: The wind industry

Employment in the UE by sector in 2011(thousands of jobs)

Source: Eurobserv’er 2012

Growth of the renewable energy market lies in emerging countries