6/10/2014

Emerging Environmental Goods Agreement: Opportunities for Clients

Alerts

The Office of the U.S. Trade Representative (USTR ) is developing the U.S. negotiating position on the emerging Environmental Goods Agreement (EGA), which offers an opportunity for manufacturers, purchasers, and traders of environmental goods to shape the global treatment of trade in these products. Squire Patton Boggs can assist clients with this impending opportunity to participate in the formation of the U.S. position, which will impact products and organizations, with comments being due July 1.

Last Thursday, June 5, the Office of the U.S. Trade Representative (USTR) hosted a public hearing seeking input on the U.S. approach to the emerging Environmental Goods Agreement (EGA). The meeting provided the latest of a series of opportunities interested stakeholders will have to shape U.S. negotiating positions as the proposed EGA takes shape. The U.S. International Trade Commission (USITC) is also continuing its investigations into the potential effects of the EGA, and will accept stakeholder submissions on its investigation into specific goods, producers and markets until July 1.

As background, the United States and 13 other parties to the World Trade Organization (WTO)—together accounting for 86 percent of global trade in environmental products—have indicated their interest in negotiating lower tariffs for environmental goods. In 2012, the Asia-Pacific Economic Cooperation (APEC) forum agreed to cut tariffs on 54 environmental goods to five percent or less by 2015, and its list of covered goods now serves as the starting point for the EGA. 

As the USTR develops U.S. negotiating positions on what this agreement should look like and what products should be covered, it is accepting public comment and hearing testimony. Preliminary discussions have already revealed some stakeholder positions. For example, many stakeholders are focused on the scope of covered products. The National Association of Manufacturers argues broadly that the list should be expanded to reflect the new range of environmentally-friendly and energy-efficient products. Similarly, the Bicycle Product Suppliers Association argues that bicycles and their parts should be covered, because of their potential to reduce greenhouse gas emissions around the world. Inclusion in the EGA would provide covered industries with stronger footing in international markets and potentially increase their overall exports.    

Other stakeholders focus on the application of the EGA. Some believe that the agreement should specifically include developing countries, opening even more markets to U.S. products.  Separately, the U.S. Chamber of Commerce, National Foreign Trade Council, and others argue that the final EGA should be a “living agreement,” regularly reviewed to include new products and welcome new parties. 

The USITC is also continuing its fact-finding missions related to the EGA. The first of these investigations examined the economic impacts of potential related tariff cuts on the United States, and the resulting report is scheduled to be delivered to the USTR on August 4. The second investigation is ongoing, and focuses on collecting trade information and estimates for specific environmental goods, producers, markets, and tariffs. The USITC will continue to accept submissions on this investigation until July 1, and the report is scheduled for delivery to the USTR on October 6.

The WTO’s proposed EGA provides an opportunity for manufacturers, purchasers, and traders of environmental goods to shape the global treatment of trade in these products. Negotiations remain at an early stage, and stakeholders have a unique opportunity to influence the U.S. position in these discussions, including which goods should be covered under the EGA. 

Squire Patton Boggs has robust trade and environmental practices and can assist stakeholders to evaluate and track the status of negotiations, help determine the impact of these negotiations on products and companies, and outline a path forward to address issues of concern as the negotiations take shape. For advice on participating in the shaping of the EGA and related environmental trade negotiations, please contact Frank Samolis (frank.samolis@squirepb.com) or Joshua Greene (joshua.greene@squirepb.com).