RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/46
6 July 1998
(98-2690)
Council for Trade in Services
ENVIRONMENTAL SERVICES
Background Note by the Secretariat
I. INTRODUCTION
1. This note has been prepared at the request of the Council for Trade in Services in the context
of the information exchange programme.  The following discussion  focuses primarily on issues
relevant to trade in environmental services - as defined in the Services Sectoral Classification List
(document MTN/GNS/W/120).1  Even in this restricted domain, the note is best seen as a first step,
due to the limited time available for its preparation and the paucity of information.  Members may
also find it useful to consult the recent stud ies on the subject by the OECD, UNCTAD and the WTO,
which the present note has drawn upon.2  
2. As the world has become more densely populated and as  the volume of production of energy,
chemicals, and other materials has increased, pollution and environmental degradation have grown in
significance.  A challenge for society is to remedy these problems in an economically efficient way.
The elimination of barriers to trade in environmental services can help meet this challenge.
Liberalization is likely to lead to lower prices, improved quality and greater diversity of services.  Thelower cost of dealing with negative environmental externalities and the availability of solutions to
more diverse problems provide a greater incentive for households and firms to use such services, and
hence lead to improved environmental quality.  At the same time, since the cost for firms of
complying with any given environmental standard is likely to be lower in internationally competitive
markets, so the prices of final products are likely  be lower, to the benefit of consumers.
3. Historically, the opportunities for trade in environmental services were limited because many
of the major environmental services, like sewage and refuse disposal, were provided by governments.
This was the case for two basic reasons.  First, some of these services, like the cleaning of roads,
parks and lakes, have the characteristics of public goods.
3  Unless special  measures are taken,
adequate private production of these services does not occur because no single firm has an economicincentive to provide the service and capture the re turns. Secondly, some of the major environmental
services, like sewage services, require special distribution or collection networks.  The high levels of
investment required to create such networks often create significant barriers to entry;  the sector is,
therefore, prone to problems of natural monopoly .  Until recently, governments were reluctant to
allow private ownership of natural monopolies which provide essential services for fear that they
would exploit consumers.  For these two reasons, the private sector, regardless of whether it was of
domestic or foreign origin, either chose not to enter or was not allowed access to many of thesesectors.
                                                     
1 The scope and content of this note are limited by the objectives of the information exchange programme.  In
particular, it does not explore the general link between services trade and the environment, nor does it seek to analyze the
wider effects of environmental legislation on services sectors.
2 See OECD (1996, 1998), UNCTAD (1996, 1998), WTO (1995, 1998).
3 Public goods are a special case of positive externalities for which the cost of extending the service to an
additional person is zero and which it is impossible to exclude individuals from enjoying.S/C/W/46
Page 2
4. The situation is, however, changing as a consequence of the pressure to achieve
environmental objectives in an economically efficient way.  First of all, new ways have been found to
create markets for environmental services. Increasin gly stringent government regulations designed to
control externalities like air, water and soil pollution, as well as growing consumer sensitivity to these
problems, are creating strong private incentives to purchase environmental services.  Where markets
still do not exist, governments are choosing to contract out the provision of such services to the
private sector.  At the same time, natural monopolies are being delineated as narrowly as possible andan effort made to introduce greater competition in  services which are not inextricably linked to the
monopoly.  For instance, while regional monopolies may be inevitable in sewage collection, since
duplicating the network of pipes is too costly, there may still be scope for competition in sewage
treatment.  Even where monopolistic market structures cannot be avoided, regulated private
ownership is being preferred to public ownership.  All these changes are having the effect of bringingmore environmental services gradually into the realm of the market.  Foreign provision, usually
through commercial presence, is thus also likely to grow in importance.
5. This paper begins, in Section II, with a brief description of environmental services, their
economic importance and the structure of the industry.  Section III looks at the pattern of trade in the
sector.  Then section IV describes the relevant features of national trade and regulatory regimes, andSection V examines the existing liberalization commitments under the GATS.  Section VI addresses
some issues which may be relevant to an assessment of the current situation and directions in which
further work may be needed.  Finally, Section VII lists some other sources of information.  Since the
purpose of the paper is to facilitate discussion, each section ends with a set of questions which
Members may wish to address.
II. ENVIRONMENTAL SERVICES:  DEFINITION, ECONOMIC IMPORTANCE AND
INDUSTRY STRUCTURE
Defining Environmental Services
6. This is a sector where definition and classification issues are relatively important in the light
of recent initiatives to push for liberalization of trade in a broad range of “environmental services”.
4  
In the Services Sectoral Classification List (M TN.GNS/W/120) developed during the Uruguay Round,
and largely based on the United Nations Provisional Central Product Classification (CPC), the
environmental services sector is defined to  include: (A) Sewage services (CPC 9401)5,  (B) Refuse
disposal services (CPC 9402)6, (C) Sanitation and similar services (CPC 9403), and (D) Other
environmental services.7  Even though the “other” category does not explicitly refer to any CPC
items, it presumably includes the remaining elements of the CPC environmental services category:cleaning of exhaust gases (CPC 9404)
8 noise abatement services (CPC 9405), nature and landscape
protection services (9406), and other environmenta l protection services not included elsewhere (CPC
9409).  The CPC definitions of each of these services are presented in the first column of Table 1.
                                                     
4 See “Liberalization of Trade in Environmental Services and the Environment”, a contribution by the United
States to the Committee on Trade and Environment, WT/CTE/W/70, dated 21 November 1997.
5 Sewage services are closely related to waste water treatment services that aim essentially to speed up the natural
processes which reduce contaminants to an acceptable level for discharge into the environment.
6 Refuse disposal and sanitation services are virtually synonymous with solid waste management which includes
services to collect, transport, treat and dispose waste from homes, municipa lities, commercial establishments and
manufacturing plants.
7 Although the use of the Services Sectoral Classification List is not mandatory, most Members have used it as a
basis for scheduling their commitments.  Details of the underlying CPC classification are to be found in United Nations(1991).  The recently developed CPC Rev. 1 has introduced somewhat greater disaggregation in some of the sub-sectors of
environmental services.  For instance sewage services have been divided into sewage treatment services and tank emptying
and cleaning services, and refuse disposal into non-hazardous and hazardous waste collection, treatment and disposalservices.
8 Cleaning of exhaust gases closely resembles air quality control services designed to remove pollutants from a
gaseous stream or to convert pollutants to a non-polluting or  less polluting form prior to discharge into the atmosphere.S/C/W/46
Page 3
7. From an environmental policy perspective, the classification of environmental services in
document MTN.GNS/W/120 may appear unduly limited because it does not include all the services
which may benefit the environment.  As the OECD (1998, p. 9) states:  “…the environment industry
is evolving rapidly beyond its traditional focus on pollution control and remediation/clean-up
activities to also incorporate a broader range of pollution management, cleaner technology and
resource management activities."  An informal working group of experts from OECD countries,
meeting under the auspices of the OECD and the Statistical Office of the European Communities
(Eurostat), have developed a more comprehensive definition of the environment industry.9
8. The OECD/Eurostat definition includes services provided to “measure, prevent, limit,
minimize or correct environmental damage to water, air, soil, as well as problems related to waste,
noise and eco-systems.  The classification system encompasses services relating:  (i) to pollution
management, including those related to the construction and installation of facilities for suchpurposes;  as well as services related to the installation and utilisation of (ii) cleaner technologies and
products, and (iii) technologies and products which reduce environmental risk and minimise pollution
and resource use" (OECD, 1998).  The elements that belong to each category have been specified in
the classification, but it would seem that, in practice, the first category is easier to define than the
second and third.
9. The environmental services explicitly mentioned in the MTN.GNS/W/120 Classification
focus mainly on pollution control and waste management, and are a sub-set of the first category in the
OECD/Eurostat classification, as is s hown in the correspondence in Table.
10   But many of the other
environmental services activities described in the OECD/Eurostat classification appear capable of
being covered by the “other” category in the MTN.GNS/W/120 Classification.11   However, there is
also an overlap between the OECD/Eurostat envir onmental services classification and some of the
other GATS sectors, for instance, business services, construction and related engineering services, and
education services (see Table 1).
10. Given the non-binding nature of the scheduling guidelines, Members are free to adapt their
classification system in any way that they choose.  Members may also decide collectively, following
precedents in telecommunication, financial and maritime services, on a new classification for
environmental services which departs from the CPC (in its provisional and revised forms).  However,
if any activity considered to be part of a new environmental service category is already part of another
service sector, then it would need to be excluded from the sector where it currently resides to preserve
the mutually-exclusive nature of the classification.  This would imply that education, engineering and
construction services, for example, would then need to be defined, for GATS classification purposes,
not to cover activities related to the environment.  Against the practical difficulties of shifting to awider classification, can be posed the benefits in terms of improved environmental policy.  First of all,
a broader definition could take into account the complementarity in the provision of different
environment-related services;  for instance, a supplier of integrated waste management services may
need liberal conditions of access not only in refuse disposal, but also in related engineering,
construction and management services.  More generally, liberalizing initiatives based on a narrowdefinition focusing on pollution control alone would compare  unfavourably with those based on
broader definitions (of the kind discussed above) in terms of creating incentives for firms to adopt
cleaner technologies and manage resources in order to prevent the creation of pollution in the first
place.
                                                     
9 This general classification is being used by several OECD countries (including Canada, France, Germany and the
United States) to launch detailed national surveys of the industry’s activities.  The group has also prepared an EnvironmentIndustry Manual, to be published later in 1998.
10 The nomenclature in the OECD/Eurostat classification more explicitly groups the main environmental services
according to the medium of pollution addressed:  water, solid waste, air, noise.
11 This category could thus include na ture and landscape protection services, water and air quality monitoring,
assessment and modelling, biological and ecosystem studies, environmental impact assessments and audits, and siteremediation activities.S/C/W/46
Page 4
Possible questions for discussion :
- Would it be useful for the purpose of scheduling commitments, to create a new, more
comprehensive classification for environmental services  - possibly in the context of a general
revision of document MTN.GNS/W/120?  Or is the existing flexibility Members have to
choose their classification scheme sufficient to deal with any such need?
- Would it be feasible and/or desirable to make policy distinctions within a class of services 
which have multiple uses according to whether they are destined for environmental or other purposes?
Size and structure of the environmental services sector
Output and employment
11. Statistical definitions and classifications of environmental services, when they exist at all,
differ from country to country.  There is no consistent view, for instance, on whether collection ofhousehold refuse, supplying drinking water and energy-saving activity should be classified as
environmental activities. In any case, few countrie s report separate statistics for environmental
services.  UNCTAD (1994), in its estimates for a "representative" industrialized country, puts the
share of environmental services (the MTN.GNS/W/120 category) in total services output at less than
one-half percent.  This figure may, however, be an understatement because some of the activity in thissector is likely to be shown as part of government services in national accounts statistics.
12. Subject to the qualifications noted above, the relative importance of the individual segments
of the environment industry would seem to vary between countries.  Taking both goods and services
into account, the most important activity in th e OECD as a whole is water and waste-water
management, followed by waste management and air pollution control. However, this is not the casein each OECD country.  For instance, solid waste management is the most important activity in the
United States, and air pollution control is of greatest significance in Japan (Table 2A).  Estimates of
employment in the environment industry vary widely, depending on definitions.  In most OECD
countries, employment in the environment industry is estimated to be less than 1 per cent of the total
labour force (Table 2B).  There is again, however, the possibility of understatement because some ofthose employed in environmental activities may be shown as government employees.
13. In 1996, the global environment market was estimated to be $453 billion, of which the
services segment accounted for a little over half at $229 billion (Table 3).  Within services, solid
waste management ($102 billion) and water treatm ent services ($65 billion) were the dominant
activities.  The United States, Western Europe and Japan together accounted for 87% of the global
market.  Growth rates in these markets have declined significantly in recent years with the major
industrial sectors having achieved a high degree of compliance with existing legislations and fewernew regulations being enacted.  Although Africa, Asia and Latin America together accounted for only
around 7% of the market, these were the regions in which the fastest growth (10% or above) was
forecast.  Among the most important reasons for the growth of the market, in addition to economic
and population growth and  increased urbanisation, are the increasing stringency of domestic
environmental regulations, evolving international en vironmental standards and their enforcement, and
stronger pressure from consumers and communities.
12
14. Table  4 takes a closer look at the individual segments of the environmental services industry,
drawing upon statistics from the United States.  Not only are solid waste management and water
treatment by far the largest segments in the sector  in terms of revenue,  they are also the segments
which have witnessed consistently positive growth in recent years.  The largest number of companies
                                                     
12 See UNCTAD (1998) and WTO (1998) for details.S/C/W/46
Page 5
are in water treatment which is also by far the most capital intensive segment of the industry.  Solid
waste management is second on both counts, but is the largest employer.
Importance of the public sector
15. It is notable that even in the United States, generally regarded as a country which has gone
furthest in terms of privatization of utilities, most of the revenue in waste water is generated by the
public sector (Table 4).  The control of water treatment in the European Union is also still largely in
the hands of public monopolies (European Commission, 1994).  However, one of the more radicalchanges of ownership occurred in the United Kingdom in 1989:  with the privatization of 10 water
authorities, the public sector has virtually disappeared from this area.  In France also, more than  two-
thirds of the market is reported to be in private hands.  It is reported that Malaysia is in the process of
privatizing the sewage system of the entire country, while Indonesia, the Philippines and Thailand
have started build-operate-transfer schemes in various public utilities (UNCTAD, 1998).
13  However,
Germany and Japan, and probably many other countries, resemble the United States in terms of the
dominance of the government in this sub-sector notwithstanding moves to allow greater private
participation.14   
16. The picture in solid waste management is somewhat different.  In the United States, only
about one-third of total revenue is generated by publ ic entities.  Though precise data is not available,
the share of the public sector is reported by industry sources to be greater in the United Kingdom
(50 per cent), France (60 per cent), Japan (around 70 per cent), and Germany (75 per cent).  It is likely
that in many other countries, much of solid waste management continues to be run by government
authorities, often at the local level, but there are strong trends towards privatisation.
Market structure17. The available evidence suggests that there is a tendency towards increasing concentration in
the environmental industry.  A study on mergers and acquisitions in the US in the environmental
industry suggests that scale benefits and consumer preferences favour large firms which tend to
achieve higher returns than their smaller rivals (European Commission, 1994).  Technological
developments favour large firms because environmental processes are becoming more complex andintegrated, and small firms find it difficult to fund the necessary equipment investments.  At the same
time, more stringent regulations induce customers like municipalities to use few large environmental
service suppliers in order to more easily monitor compliance and trace liability.  As a result of these
developments, the number of mergers and acquisitions increased between 1987 and 1991 at annual
rate of 56 per cent to reach 223 transactions in 1991.  More recent reports from industry sources
suggest that half the private market in the United States is controlled by the top ten companies.
18. Even though fewer mergers have taken place in the European Union in recent years, the water
treatment market is reported to be dominated by a few large firms with the financial means to invest
in and run big treatment plants (European Commi ssion, 1994).  However, in waste management, the
market is more fragmented with companies specializ ing in specific areas.  Nevertheless, industry
sources report that half the private market in France is controlled by the top two and in the
United Kingdom by the top six companies.  The market for other environment-related services such astechnical engineering, environment consulting and management services is again dominated by large
engineering firms, many of which have special subs idiaries for the environment.  However, despite
                                                     
13 Build-operate-transfer schemes differ in precise form.  UNCTAD (1998) provides a description of what is
usually involved:  "Under this procedure, a private and a public authority enter into a contract for the design, construction,operation and maintenance of a facility.  Once the facility beco mes operational, the public authority starts reimbursing the
private firm for the costs it has incurred.  After refunding the capital expenditure, the public authority acquires ownership o f
the facility, while it continues to pay the private firm for opera ting it.  In this case the role of the private entity changes  over
time (i.e. from owner to manager), with a parallel modification of its legal obligations and of the limitations it may face."
14 Industry sources report that in countries like Germany and Japan, private engineers and other professionals do
provide design and consulting se rvices to the public entities.S/C/W/46
Page 6
the trends towards increasing concentration, it has been estimated that in many countries, a significant
share of the industry's turnover is generated by small and medium enterprises which provide
specialized services to specific environment-related systems and act as sub-contractors on large
projects (WTO, 1998).  For instance, there are numerous small specialist environmental consultancies
in the growing segment of "environmental audits".
Technology trends
19. Many of the technologies in use within the sector are reported to have remained unchanged
for a long period. Waste water treatment and solid waste management generally use mature, non-
proprietary technology, and the basic technologies for air pollution control are also well developed.
However, the situation is changing with the emergence of new legislation as a "market-driver".  As a
result, the environment industry is increasingly t echnology-driven and technology is being used more
and more as a competitive tool.  Research and development in the industry has been particularly high,with the large multinational environment companies spending 8 to 10 per cent of their turnover on
R&D leading to the development of new technologies in all segments of the industry (European
Commission, 1994).  At the same time, new legisl ation together with induced and independent
technological developments is leading to changes in the structure of the industry.  Emphasis is thus
shifting from traditional “end-of-pipe” activities, which capture pollutants from the output stream, to
the use of cleaner technologies, which reduce the amount of pollutants generated in the first place.
Possible questions :
- How important is public supply of environmental services in different countries?  
How does the pattern differ between sub-sectors?
- Does the tendency towards increased concentration in certain segments merit concern?  Is the
optimal scale of operation large relative to the size of the market in particular segments?  Are
there differences between countries?
III. TRADE IN ENVIRONMENTAL SERVICES
20. It would seem that a large part of trade in the main environmental services must take place
through commercial presence with the accompanying presence of natural persons, while a number ofsupporting services can also be supplied through the other modes of supply.  It is, however, difficult
to obtain an idea of the magnitude of trade and the relative importance of modes because there are few
statistics for trade in environmental services.  The IMF Balance-of-Payments statistics, the only
source of information on trade in services on a global basis, do not contain a separate category for
environmental services.
15  Even the few countries who report statistics for trade through foreign
affiliates, do not present such statistics for environmental services.  The situation may change
because, as noted above, several countries have begun work on collecting data on the basis of the newOECD/Eurostat classification for the environmental industry.
21. For selected countries, some estimates do exist for the environmental industry as a whole,
inclusive of both goods and services, ranging from equipment and chemicals for water treatment and
air pollution control, to consulting and waste management services.  These figures suggest that in
1992, the United States, Germany and Japan had large surpluses in environmental trade while ChineseTaipei, Mexico and Canada were among the major net importers (Table 5A).  Smaller countries like
Finland and Norway are reported to have highly internationally-oriented industries, exporting around
half their production, but they do not have a large share of the global market (OECD, 1996).
Recently, firms in Australia, Canada and the United Kingdom are reported to have increased their
efforts to expand environmental exports.
                                                     
15 See the Secretariat Report on "GATS and Statistics on Trade in Services", issued as document S/C/W/5, dated
17 July 1995.S/C/W/46
Page 7
22. In the future, environment markets in East and South-East Asia, Latin America, Central and
Eastern Europe are expected to show rapid growth and opportunities for international trade.  This is
partly due to strong economic development and rapid internationalization and partly due to increasing
environmental awareness.  Already, smaller develo ping countries, especially in Latin America, rely
heavily on imports to fulfil domestic demand.  In many of these countries, trade deficits in
environmental products are likely to increase despite efforts to build up the capacity of domestic
industry (OECD, 1996).
23. Somewhat more detailed statistics, with separate figures for trade in individual environmental
services, exist for the United States (Table 5B).16  In 1996, US exports of environmental services were
estimated to be $3.4 billion while imports were estimated to be $1.4 billion, accounting for a fifth of
total environmental exports and imports, respectively.  The largest category of exports were solid
waste management and consulting and engineering, whereas water treatment was the largest categoryof imports.  The United States was a net exporter of all categories of environmental services with the
sole exception of water treatment services.
24. It is expected that the industry will become increasingly trade oriented, particularly in more
mature areas such as waste and water management, and air pollution control.  The adoption of world-
wide environmental standards will expand international markets, whereas privatization andderegulation of utilities may expand opportunities for foreign participation.  The trends towards
consolidation in the industry and increasing firm size are also likely to lead to greater
internationalization.
25. Table 6 presents an assessment made of the national growth and potential competitive
advantages for firms from selected countries and regions.  Firms from Germany, France and Italy areassessed to have a potential advantage in waste water treatment, while firms from the United States
are competitive in areas like monitoring and reme diation, and firms from Japan in dealing with air
pollution (OECD, 1996).  National environmental problems and regulation have enabled firms to
build up competitive advantages in different areas.  For instance, the strict Japanese regulations on air
pollution has made them market leaders in this domain, while the US industry’s competitiveness inhazardous wastes is attributed to US toxic regulatio ns (OECD, 1998).  It has also been argued that the
privatization of the solid waste segment in the United States has contributed to the emergence of US
firms as the most competitive internationally, just as  the privatization of water treatment in France and
the United Kingdom has been a factor in the international competitiveness of firms from these
countries (EBI, 1997).  Similarly, in Malaysia, a private company whose main business was to operate
waste-water plants privatized by the government, is reported to be following the example of British
and French water companies and is providing integrat ed water services to other countries in the Asia-
Pacific region (UNCTAD, 1998).
26. Table 7 presents a list of top 50 environmental companies in the world which accounted for a
fifth of the global market in 1995.  The list includes both goods and services suppliers.  Of the top
10 companies, there are 2 each from the United States, France and Japan, and one each from
Switzerland, Germany, Canada and Brazil.  It is notable that many of the firms in the list providediverse environmental services.  The large part of the sales of these companies is likely to be directed
to their domestic markets.  The available evidence suggests that there are differences across countries
in the degree of export-orientation of their industry .  In the United States, only 9 per cent of industry
revenues are generated from overseas business, whereas Germany and Japan export around 20 per
cent of their environment industry capacity (EBI, 1998).
                                                     
16 These figures do not adequately cover the commercial presence mode.  For instance, they do not include sales
through subsidiaries, but do include repatriated profits and sales through representative offices and agents.S/C/W/46
Page 8
Possible questions:
- Is it possible to identify the pattern of trade,  including the relative importance of modes, in
environmental services?  How does this pattern differ between different types of
environmental services?
IV. TRADE RESTRICTIONS AND REGULATORY STRUCTURE
27. The previous discussion revealed that governments are heavily involved in the provision of
many environmental services.  As described in the introduction, this is because some of these servicesdisplay characteristics of natural monopolies, as in the case of sewage services, or of public goods, as
in the case of cleaning public spaces.  These situat ions have historically prompted many governments
to produce such services themselves, either because of the fear that private monopolies would exploit
consumers or because private firms could not profitably provide the services.  Foreign participation in
most cases was not even considered.  But, the situation is changing.  Where monopolistic marketstructures cannot be avoided, regulated private owne rship is being preferred to public ownership and
where public good problems cannot be avoided, the government is contracting out the provision of
these services to the private sector.  Now that these services have come into the realms of the market-
place, the focus is on barriers to foreign participation.
Explicit barriers to trade
28. As discussed above, the suppliers of the major environmental services rely significantly on
the commercial presence mode of supply.  Hence, barriers which limit the ability of firms to establish
a commercial presence and to employ nationals from their home country affect trade in these services.
29. The general foreign investment regime, as well as its sector-specific aspects, crucially affects
conditions of market access in many countries.  Limitations on foreign investment, including those onthe extent of foreign ownership (for instance, limiting foreign equity ownership to specific levels), on
the type of legal entity required (such as the requirement to incorporate locally), on the ownership of
specific assets (such as landfills and sewage systems), and on the scope of operations (restrictions on
number and location of branches) potentially have a strong affect on this sector.  Similarly, the
requirement to form a joint venture with local suppliers curtails the freedom of foreign suppliers todecide on the optimal business arrangement.
17  More generally, the application of economic needs
tests to determine whether new entry will be allowed, reduces transparency and leaves administrators
with a high degree of discretion.
30. Given the relatively high labour intensity of some environmental services, such as refuse
disposal, the sector is affected by limitations on the movement of natural persons.  Nationality
requirements for staff prevent firms from minimizing labour costs through international recruitment.
Residency requirements for managers and directors de facto  disadvantage foreign suppliers even
when the requirements are imposed on all distributors.  Immigration policy, visa restrictions, and
levies and charges for social security also impact on the sector.
31. Discrimination against foreign firms can also be through taxation or subsidization, though tax
incentives sometimes also favour foreign investors.   Performance and local content requirements can
have the effect of modifying competitive conditions against foreign investors.  Discrimination againstforeign workers can also be through taxation or subsidization, denial of access to benefits and
amenities, restrictions on the rights of dependents and unfair treatment in the workplace.
                                                     
17 It is conceivable that some such arrangements have dynamic benefits.  For instance, UNCTAD (1998) finds that
partnerships between firms in developed and developing countries are helping the latter to acquire state-of-the-art
technologies, r each markets that otherwise would be difficult to access, and become part of an international network.S/C/W/46
Page 9
Possible questions :
- What are the measures which restrict trade in environmental services?  Are some measures
more frequently employed than others?  Are some modes of supply more frequently subject to
restrictions than others?
- Is it possible to distinguish between trade-restrictive measures which apply to all services
sectors and those which apply only to environmental services?
- Has there been significant liberalization of tr ade in environmental services in recent years?
What are the policy considerations which have caused some countries to liberalize?  What has
been the experience of these countries?
Government procurement
32. Even though governments are increasingly step ping out of the supply of environmental
services, government procurement still plays an important role in the environmental industry.  Onemajor reason is that private markets for many services still do not exist because of the public good
aspects mentioned earlier.  Hence, even though the supply of public services has been privatized or
contracted out to the private sector, the government  still continues to procure these services itself.
The public sector devotes the largest share of its environmental expenditures to water and effluent
treatment, waste handling and recycling, and cleaning contaminated sites.  In the OECD countries, the
public and private sectors account for roughly equal shares of total environmental expenditure, while
in developing countries the share of the public sector is around 70 per cent (UNCTAD, 1998).
33. Public procurement practices are covered by various sets of national and plurilateral rules, but
all are limited in scope.  In the WTO; the Ag reement on Government Pr ocurement (GPA) now has
26 signatories.  Nearly all the signatories to the GPA have included the full range of environmentalservices as defined in MTN.GNS/W/120 within the scope of their commitments.
18   However, this
does not necessarily ensure that all procurement of  these services takes place on  a non-
discriminatory basis.  The GPA rules apply only above certain thresholds, only to the covered entities,
and parties to the Agreement have listed a number of derogations from its key disciplines.19
34. It is difficult to measure the precise extent of discrimination in the procurement of
environmental services.  More general efforts to quantify the extent of procurement bias have
provided estimates of differences from private sector import patterns reflecting a degree of preference
to domestic suppliers equivalent to 8-18 per cent  in the principal OECD markets (OECD, 1998).  In
many cases, both within and outside the OECD, procurement practices simply exclude foreign
suppliers from competition for government contracts.  For instance, a survey of US air pollution
control firms reported procurement practices to be a serious problem (OECD, 1998).
Possible questions
- In what types of environmental services does public procurement play a significant role?
How does the pattern differ across countries?
- How far do government procurement laws, regulations, procedures and practices conform to
the principles of non-discrimination in this sector?
                                                     
18 However, the Republic of Korea has excluded from the scope of its commitments under the GPA the same
services which have been excluded from its GATS schedule (see Table 10) and the United States has excluded public utilityservices.
19 See “Government Procurement of Services”, issued as document S/WPGR/W/3, dated 8 November 1995.S/C/W/46
Page 10
Export promotion policies and development assistance
35. It has been noted that certain export promotion policies of governments such as export credit
schemes and tied aid could induce distortions in trade in environmental products despite efforts to
create international disciplines in these areas (O ECD, 1998).  The available evidence suggests that
many of these schemes are targeted at environmental goods.
Possible question:
- Do export promotion policies of governments such as export credit schemes and tied aid
affect trade in environmental services?
Domestic regulations
36. The environmental services sector is affected by a wide range of government regulations.
First of all, there are the environmental regulation s which apply to all industries and hence influence
the demand for environmental services.  Then there are the regulations which are directly targetedtowards environmental services, such as urban planning restrictions on the location of disposal sites.
In many cases, regulations are designed, at least in principle, to remedy market imperfections.
However, where regulations are more burdensome than necessary to achieve the objective in question,
they can cause an excessive increase in costs and hence prices, and unduly reduce consumer choice.
Inefficiencies can arise if regulations inhibit existing suppliers from making socially optimal choices,or if regulations inhibit competition – either between existing firms or from new entrants.  The key
question in assessing a particular regulation is whether the stated objectives can be met by policies
which have smaller economic costs.
Environmental regulations
37. The recognition that in an unregulated economy  there will be too little abatement and too
much pollution has prompted a range of regulatory responses.  Governments have traditionally relied
on direct regulatory controls.  For example, in the United States, the 1970 Clean Air Act reduced
allowable emissions of three major pollutants by 90 per cent and in a series of regulations over the last
decades, firms were told they must phase out ozone depleting chemicals.  It has been argued that such
command and control regulations are often set without comparison of marginal costs and benefits, anddo not necessarily lead to the most efficient level of pollution control.
38. In order to avoid some of the problems of direct controls, there has recently been a greater
emphasis on economic incentives than on government control.  One approach involves the use of
emissions fees, which requires that firms pay a tax on their pollution equal to the amount of external
damage.  This in effect internalises the environmental externality by making the firm face the full
social cost of its activities.  A recent, innovative approach, that does not require the government to
legislate taxes, is the use of tradable emissions permits (e.g. the 1990 Clean Air Act Amendments).With this approach, instead of telling firms that they must pay a certain amount per unit of pollution
and then allowing firms to choose the level of pollution, the government chooses the level of pollution
and allocates the appropriate number of permits.  The price of permits, which represents the level of
emission fee, is then set by supply and demand in the market for permits. If the cost schedule is
known, the tradable emission approach has the same outcome as the emission fee approach – exceptthat it is the government who gets the revenue from emission fees rather than those who receive
permits.  However, not all solutions need involve direct government action.  Greater environmental
awareness on the part of consumers, private negotia tions between polluters and affected parties, and
effective liability rules may also provide efficient outcomes.  For instance, incentives for pollutionS/C/W/46
Page 11
abatement and choice of cleaner technologies have also been created by consumer affinity for the
products of firms which adhere to voluntary standards20
39. Given the importance of regulations in the market for environmental services, there is
sometimes concern that such regulations can themselves serve as technical barriers to trade (OECD,
1998).  Governments and environmental agencies may be tempted to craft environmental norms to
match the strengths of the domestic (or favoured foreign) suppliers.  Developing country markets can
also be influenced if technical assistance on environmental regulations promotes regulations whichfavour the donor country’s suppliers.  More generally, differences in regulations between countries
can inhibit trade by eroding economies of scale.  Barriers to trade can also arise from the costs, delays
and uncertainties created by regulation and enforcement.  While some of these concerns have been
most frequently expressed with regard to trade in environmental goods, it is conceivable that they
could arise in the case of trade in environmental services.
40. It should usually be possible to design environmental norms so as to ensure that they do not
become technical barriers to trade.  If different technologies produce equivalent results in terms of
environmental quality, then a purchaser should be free to choose the type of technology, rather than
be required to buy from a domestic source because of specified technology.  Incentive-based
approaches allow firms to determine the most co st-effective ways to limit environmental damage.
Environmental policy in the OECD countries has been  evolving in the direction of ambient standards
– which set a benchmark for the quality of the surrounding environment – and the use of market-based
incentives.  This may represent a move towards more trade-friendly environmental policy instruments
(OECD, 1998).
Possible questions:
- Are existing regulations the most efficient means of achieving the relevant objectives?
- How serious is the problem of technical barriers to trade in environmental services?
- How is the changing approach to environmental regulation likely to affect the pattern of
demand for environmental services and hence the structure of the environmental services
industry?
Regulation of monopolies
41. Where private entities provide environmental services on a monopolistic basis,  governments
have generally felt the need to regulate prices and quality in this area.  Even where monopoly rights
have been auctioned off to the bidder who offers to provide the service at the lowest price subject to
certain quality constraints, there is usually ex post regulation of service standards.  In other cases,
governments have chosen to regulate the prices and/or profits of local utilities.  There is increasing
resort also to regulatory innovations like yardstic k competition in dealing with unavoidable regional
monopolies,  with rewards to each regional monopolist made contingent on the performance of
others
21   There are other situations in which natural monopolies persist in certain segments, like
sewage collection, but there is scope for introducing competition in related segments, like sewage
                                                     
20 Standards, norms and conformity assessment are currently being developed through multilateral processes, such
as ISO 14001 and the Environmental Management and Auditing Systems (EMAS).
21 Yardstick competition is a method of remedying informational asymmetries by promoting competition between
firms.  For instance, concerning the regulation of water utilities in the United Kingdom,  Littlechild (1986) proposed a
division of what could have been a single monopoly for the whole country into separate regional units.  The regulated priceof the service provided by a single regional unit could then be based on the costs of other regional units.  As long as there
was no collusion and regional conditions were similar, this method offered the possibility of creating incentives for cost
reduction without allowing the monopolists to appropriate excessive rents.  Good incentives for cost reduction exist b ecause
a firm keeps the benefits of its cost-reducing activities, since its price is linked to the cost performance of other firms.
Monopolistic rents are kept low if there is symmetry between firms, because industry prices are kept in line with industry
costs.S/C/W/46
Page 12
treatment.  Here, the regulatory challenge has been to ensure that the monopolist does not overcharge
or discriminate in pricing for its essential service.22  This would seem to be the type of issue which
falls within the scope of GATS Article VIII dealing with monopolies and exclusive service suppliers.
Possible questions :
- How far do the disciplines of GATS Article VIII ensure that the behaviour of monopolies
supplying environmental services is not discriminatory?  Is there a case for developing certain
pro-competitive regulatory principles?
Spill-over from barriers to trade in goods
42. Environmental goods and services are increasingly being offered on an integrated basis
(OECD, 1998).  This may be on a horizontal basis, through a firm or a group of firms bringing
together materials and expertise required to undertake an entire environmental project or on a vertical
basis through firms specialising in for instance, construction and engineering in differentenvironmental fields.  Environmental services are therefore important not only in their own right but
also increasingly integral to the effective utilisation of environmental technologies and products in
pollution and resource management projects.  Hence, barriers to international trade in environmental
goods prevent the full benefits of liberalisation of international trade in environmental services from
being realised.
23
Possible question :
- Are some barriers to trade in goods more cr itical to trade in environmental services than
others?  How are these barriers best addressed?
43. Host country failure to protect intellectual property rights has sometimes been identified as a
factor limiting exports of environmental services.  Fo r instance, a survey of suppliers in the water and
waste industry is reported to have found that th e lack of such protection adversely affected the
competitiveness of suppliers who used more sophi sticated technology (OECD, 1998).  In principle,
the inability to capture the returns from the pr oprietary expertise or technology may lead to a
reluctance to supply services.  In practice, how ever, the environment industry has not identified
intellectual property protection as a high ranking problem (OECD, 1998, UNCTAD, 1998).  Inservices, in particular, there would seem to be less scope for copying or misappropriation of
intellectual property.
Possible question:
- How relevant is the issue of protection of intellectual property rights to trade in environmental
services?
V. ANALYSIS OF EXISTING COMMITMENTS
44. How far have the commitments of Members captured the liberalization of trade in
environment services and how far do the commitments reflect the restrictions still in place?  These
                                                     
22 The situation can in some ways be seen as analogous to that in the telecommunications market where one of the
concerns was to ensure that monopolists  in the local call market did not frustrate competition in the long-distance call
market.
23 The argument here mirrors that in Section II, where it was noted that the complementarity between different
environment-related services created a presumption in favour of wider definitions of environmental services;  otherwise
there was a danger that liberalization in a narrowly defined sector (say refuse disposal) would be frustrated by the persistenc e
of barriers in related sectors (such as engineering and construction services).  It is also possible, however, that the removal  of
barriers to imports of certain goods, such as capital goods incorporating clean technologies, may reduce the creation of
pollution and hence the demand for services which tackle pollution.S/C/W/46
Page 13
questions are relevant, first, because Members' policies may be more liberal in practice than their
commitments and, secondly, because Members are not obliged, even in sectors included in their
schedules, to specify all the restrictions in place (when a particular mode is unbound).  In the
following discussion, focusing on limitations in Members' schedules in environmental services, it
must be kept in mind that the Members under scru tiny have at least undertaken commitments in this
sector, whereas many other Members have not made commitments at all.
45. In examining the level of commitments, three distinctions can be made. These are between
full bindings , representing full coverage of the sector and a "none" entry against a particular mode of
supply with respect to both market access and national treatment, denoting the absence of any
limitations;  no bindings , which are designated "unbound" against the relevant mode, with respect to
both market access and national treatment or with respect to market access only;  and the intermediate
case of limited bindings , which refer to those entries which are conditioned in some way by a
limitation.  The limitation may be on coverage (geographical, sectoral, or modal), or in the form of a
restrictive measures (which can be one or more of the six types of restrictions listed in Article XVI or
any measure inconsistent with the national treatment obligation in Article XVII).
46. Commitments on at least one sub-sector of environmental services are to be found in the
schedules of 38 WTO members.24  The number of commitments on the individual sub-sectors is
roughly equal:  29 on sewage, refuse disposal and other environmental services, 30 on sanitation and
similar services, and slightly fewer on individual segments of other environmental services (Table
8).25   Even though many WTO Members have not made commitments in any of these sectors,
Members with commitments account for over 86 per cent of the GDP of all Members (Table 9A).
47. Tables 9A and 9B present the results of a numerical analysis of the schedules.  Since there is
little sector-specific variation from the uniformly low level of commitments with respect to mode 4
(the presence of natural persons), the following analysis focuses on the first three modes cross-border
supply, consumption abroad and commercial presence.26  There are significant differences between
participating Members in the extent of the binding and the restrictiveness of scheduled commitments.
Fully liberal commitments on all three modes are rare, and have been made only by Ecuador for thefull range of environmental services, and Rwanda for sanitation and similar services.
48. As noted earlier, cross-border supply and consumption abroad are of limited relevance for
environmental services, but there may, nevertheless, be scope for utilising  these modes for certain
support services.  Members’ differ in their judgement of the feasibility of the cross-border supply
mode.  In each of the three sub-sectors, 10 Members (accounting for over 60% of participants’ GDP)
have indicated that cross-border supply of the services is not technically feasible, while other
Members have made full commitments or left the mode unbound.
27  In each sub-sector, far more
Members have made fully liberal commitments on consumption abroad (between 12 and 25) than on
cross-border supply (between 3 and 5).  No Member with commitments on environmental services has
left the commercial presence mode unbound, but the bulk of the commitments for this mode fall
within the limited category.
                                                     
24 Since the schedules of Austria, Finland and Sweden have not yet been integrated into that of the European
Community and its Member States, they are counted independently.
25 As noted in Section II, of the six environmental services  in the CPC, only three are explicitly mentioned in the
MTN.GNS/W/120 classification.  It is assumed here that if a Member has made unqualified commitments on the “other”category, then these commitments cover the remaining CPC categ ories.  This interpretation is not meant to have a legal
basis.
26 The commitments on the presence of natural persons are discussed in the section on horizontal limitations.
27 The possibility of indicating that a mode is technically infeasible rather than a precise level of commitment may
have introduced unnecessary ambiguity into the schedules.  Say a Member in a particular sector has designated a mode as
technically infeasible but the mode is in fact feasible, or has become so because of a tec hnological development.  Does this
mean that a Member is fully committed with respect to this mode or not committed at all?  An entry of “none” or “un bound”
would have been more helpful, in that it would reveal whether access is guaranteed, rather than an entry of “ unbound*”,
which simply reflects a Member’s judgement of whether the mode is feasible.S/C/W/46
Page 14
49. Table 9A may tend to understate the liberalizing content of commitments by consigning many
to the “limited” category (shaded area in Table 9A).  Table 9B takes a closer look at the nature of
limitations.  The most striking feature is the rarity of sector-specific limitations on market access and
national treatment.  There are in fact no such limitations on the first two modes, and few on the third.
Table 9B reveals two reasons why a large number of commitments are, nevertheless, classified as
“limited”:  the existence of horizontal limitations and exclusions from sectoral coverage.
Horizontal limitations
50. The presence of horizontal limitations impacts heavily on commercial presence, but has little
effect on the first two modes (Table 9B).  However, some Members have indicated in their schedules
that all payments and transfers abroad require authorization and this may affect trade through all four
modes.  The main horizontal restrictions on commercial presence which impact on environmental
services include approval requirements, economic needs tests, limitations on the purchase or rental ofreal estate, restrictions on equity holdings, residency requirements for directors, and tax and subsidy
measures.  Members' commitments on the presence of natural persons are mostly limited to business
visitors, and certain categories of intra-corporate transferees, such as managers, executives and
specialists.  Even these limited commitments are sometimes accompanied by quotas and invariably by
limitations on the length of stay of foreign nationals.  There are virtually no commitments whichwould cover relatively low-skilled staff who may be important in services like refuse disposal.
51. Two instances of horizontal limitations may be particularly relevant to environmental
services.  The schedule of the European Communities and their Member States indicates that services
considered as public utilities (which include environmental services) at a national or local level may
be subject to public monopolies or to exclusive rights granted to private operators.  An instanceprovided of the latter are concessions from public authorities to private operators subject to specific
service obligations.  An explanatory note in the schedule states that since public utilities often exist at
the sub-central level, detailed and exhaustive sector-specific scheduling is not practical.   Turkey's
schedule also indicates public utilities are provided by public monopolies, and these areas are
therefore closed to private investment.
Limitations on sectoral coverage
52. The second reason for commitments being classified as “limited” despite the absence of
sector specific limitations is that several Members ha ve chosen to limit the sectoral coverage of their
commitments.  There is considerable variation in the scope and type of exclusions (Table 10).  Some
go so far as to state that the scope of commitments is restricted to consultancy services only. It is
notable that several Members have specified that their commitments do not include public service
functions whether owned and operated or contracted out by the local, regional or central government.One Member has stated that its commitments do not include services supplied in the exercise of
government authority.  This should, of course, not be treated as a limitation on sectoral coverage since
this exclusion is already allowed for under Article I:3 of the GATS.  But the question does arise of
when public service functions fall within the scope of GATS disciplines and when they do not.
53. A key issue is whether sales are made on a commercial basis.  To begin with, it is not
completely clear what the term "commercial basis" means.  Nevertheless, if services were deemed to
be supplied on a commercial basis, then, regardless of whether ownership was in public or private
hands, the sector would be subject to the main GATS disciplines and to the negotiation of
commitments under Articles XVI and XVII.  A different issue arises in situations in which the
government has privatized certain services as local monopolies and the private firms receive paymentfrom the government rather than from individual users.   One view could be that these are still services
supplied in the exercise of government authority, as defined by GATS Article I:3 – since they are not
supplied on a commercial basis to individual users and they continue to be (local) monopolies – and,
therefore, do not fall within the scope of GATS disciplines.  Another view could be that these services
are being procured by the government and, therefore, the manner of purchase per se  would fall withinS/C/W/46
Page 15
the scope of GATS Article XIII and any future disc iplines on procurement.  For the moment, the issue
is almost academic, because no real multilateral disciplines exist on government procurement of
services.  But if such disciplines were to be created, then there would be need for clarification.28
Possible questions :
- Would it be useful to clarify when an environmental service is to be considered as being
supplied in the exercise of governmental authority?
- Is there need to clarify the scope of government procurement (as referred to in GATS Article
XIII) in relation to services supplied in the exercise of governmental authority (covered by
GATS Article I:3)?
- What are the policy reasons for the exclusions from the scope of commitments of certain
environmental services and of "public service functions whether owned and operated or
contracted out by the local, regional or central government"?
Limitations on market access and national treatment
54. As stated above, there are relatively few instances of sector-specific limitations on market
access and only one of a limitation on national treatment.  Several Members have specified that
environmental service providers need to obtain a license (Table 11).  It should be noted that a
licensing requirement must be scheduled either if it is used to implement a quantitative restriction (i.ea market access restriction within the scope of Article XVI), or if it discriminates between national
and foreign suppliers (i.e. inconsistent with the national treatment obligation in Article XVII).  There
is one instance of an explicit numerical quota, one where it is stated that the number of licenses issued
may be limited and two where establishment is subject to an economic needs test. The instances of
monopoly are to be found for two Members in control services of exhaust gases from cars and trucks(along with the requirement that such services be offered on a non-profit basis) and in one for certain
types of waste.  Other limitations include jurisdictional restrictions and domicile requirements on
refuse collection, and the exclusion of garbage dumps from the scope of commitments on refuse
disposal.
55. The only limitation on national treatment restricts the guarantee of such treatment to entities
in which foreign equity participation does not exceed 49 per cent.
Possible questions :
- How far have the commitments of Members captured the liberalization of trade in
environmental services?
- How far do the commitments reflect the restrictions still in place?
VI. CONCLUDING ISSUES
56. The previous discussion revealed that governments are still heavily involved in the
environmental services sector, but there their role is changing gradually.  From being the major
suppliers of these services, they are increasingly assuming the role of procurers and regulators.   As
these changes lead to the development of a market  for environmental services, international trade in
these services is growing from previously low levels.  However, there remains considerable scope for
further liberalization and for improved commitments under the GATS, especially with regard to themovement of natural persons.  In approaching a new round of negotiations in this area, it may be
                                                     
28 The Working Party on GATS Rules has begun a discussion of how concessions granted by the government
should be treated, which is directly relevant to the issues raised here.S/C/W/46
Page 16
useful to address some basic questions.  First, with regard to the core environmental services, sewage
and refuse disposal, it does not seem to be completely clear how much falls within the scope of
Article I:3 (services supplied in the exercise of governmental authority) and Article XIII (government
procurement), and how much is subject to the main GATS disciplines.  Secondly, the distinction
between the respective domains of Article I:3 and Ar ticle XIII would appear to need clarification – a
need which has already been manifested in the discussion on  concessions in the Working Party on
GATS Rules.
Possible questions :
- How much liberalization of trade in environm ental services has been accomplished already?
- Are there areas where it would be useful to clarify the precise scope of GATS disciplines?
- What trade restrictive measures are not adequately addressed by current disciplines?
- In order to further the process of liberaliz ing trade in environmental services, how much
emphasis needs to be placed on creating disciplines on government procurement (under
GATS Article XIII) and on deepening disciplines dealing with origin-neutral domestic
regulations, such as technical standards (under GATS Article VI:4)?
VII. OTHER SOURCES OF INFORMATION
Sources of information, other than those referr ed to in the bibliography, are the following:
APEC:  At their November 1997 meeting in Vancouver, APEC trade Ministers agreed to
pursue early, voluntary liberalization in several sectors, including environmental goods and
services.  Work has begun on determining the scope of the initiative, in terms of sectoral and
measure coverage, and to identify barriers to trade.  It was intended to complete this work bythe first half of 1998 with a view to commencing implementation wherever possible in
1999.
29   
Environmental Business International, Inc. (E BI), San Diego:  The EBI has completed a
research project with a grant from the US Environmental Protection Agency.  In the full
report, "The Global Environment Industry:  A Market and Needs Assessment" (a section of
which is referred to in the bibliography), EBI has compiled research on global environment
markets, including market size and growth pr ojections, country and regional reviews and a
catalog of over 700 environmental market data reports.  The report, data spreadsheets and
contact databases are available from EBI in hard copy or electronic format for a nominal cost.
International Trade centre (ITC):  The ITC has prepared a handbook, entitled "Environmental
Engineering and Support Services:  A Handbook for Exporters from Developing Countries".
It is also organizing International Business Round Tables to help developing country
exporters to identify potential markets for their exports of environmental goods and services.
OECD:  The Trade Directorate is undertaking a Pilot project to assess barriers to trade
services trade in a number of sectors, including environmental services, in the OECD
countries and a number of developing countries.  It is expected that this work will focus in the
first instance on the compilation of inventories of barriers.  An initial survey of barriers to
trade in environmental services is being prepared for an OECD Trade Committee Working
Party in early autumn.
                                                     
29 Details are to be found in document WT/L/248, dated 2 D ecember 1997.S/C/W/46
Page 17
UNCTAD:  The UNCTAD Secretariat is organizing an expert group meeting on
"Strengthening capacities in developing coun tries to develop their environmental services
sector" in Geneva on 20-22 July 1998.  The MAST database contains some information on
measures affecting trade in environmental services.
BIBLIOGRAPHY
Berg, D.R. and Ferrier, G. (1997), Meeting the  Challenge: US Environmental Industry Faces the 21st
Century, paper produced for the Office of T echnology Policy,  US Department of Commerce,
Washington, DC.
Environmental Business International, Inc (1997), Environmental Business Journal:  Strategic
Information for a Changing Industry, vol. IX, no.4, Annual Industry Overview.
Environmental Business International, Inc (1998), The Global Environmental Market and United
States Environment Industry Competitiveness, San Diego, California.
European Commission (1994), Eco-Industries in the EC, in Panorama of EU Industry 1994,
Luxembourg.
Littlechild,  S. (1986), Economic Regulation of Privatised Water Authorities, HMSO, London.
OECD (1996),  The Global Environmental G oods and Services Industry, OECD, Paris.
OECD (1998), Future Liberalization Of Trade In  Environment Goods And Services:  Ensuring
environmental protection as well as economic benefits, OECD Secretariat note prepared for the
OECD Joint Session of Trade and Environment Experts, 6-7 May, 1998, Paris.
OECD (1998, forthcoming), Environment Industry Manual:  Proposed guidelines for the collection
and analysis of data on the environment industry, OECD, Paris.
UNCTAD (1996), Services and the Envir onment, (UNCTAD/S DD/SER/6), Geneva.
UNCTAD (1998), Strengthening Capacities In Developing Countries To Develop Their
Environmental Services Sector, (TD/B/COM.1/EM.7/2), Geneva.
WTO (1995), Environment and services (WT/CTE/W/9), Geneva.WTO (1998), Environmental Benefits of Remo ving Trade Restrictions and Distortions
(WT/CTE/W/67/Add.1), Geneva.S/C/W/46
Page 18
Table 1:  Environmental Services:  A Preliminary Comparison between the MTN.GNS/W/120 Classification and the
Pollution Management Group  of the OECD/EUROST AT Classification
MTN.GNS/W/120 C LASSIFICATION  (WITH THE
"OTHER " CATEGORY ELABORATED USING THE CPC)OECD/E UROSTAT MANUAL CLASSIFICATIONS
POLLUTION MANAGEMENT GROUP
A. Sewage services (CPC 9401)   Waste water management
Sewage removal, treatment and disposal services
Excludes collection, purification and distribution
services of water (in CPC 18000)
Excludes construction, repair and alteration of sewers
(in CPC 51330) (GATS 3B civil engineering
construction services)Design, operation of systems or provision of other
services for the collection, treatment and transport of
waste water and cooling water.  It includes design,
management or other services for sewage treatmentsystems, waste water reuse systems, water handlingsystems
B.  Refuse disposal services (CPC 9402)C.  Sanitation & similar services (CPC 9403) Solid waste management
Refuse disposal services:
Refuse collection and disposal services;  collection
services of garbage, trash rubbish and waste
(household, commercial and industrial); transportservices and disposal services;  waste reductionservices.
Excludes dealing and wholesale in waste and scrap (in
CPC 62118 and 62278;  GATS 4 distribution services)
Excludes R&D services on environment issues (CPC85;  GATS 1C Business services (R&D))
Sanitation and similar services:
Sanitation and similar services including outdoor
sweeping, snow and ice clearing.
Excludes disinfecting/exterminating services for
buildings (in CPC 87401;  GATS (1F)(o) – Other
Business Building Cleaning Services.)
Excludes pest control for agriculture (CPC 88110;GATS 1F(f) services incidental to agriculture, huntingand forestry.Design, operation of systems or provision of other
services for the collection, treatment, management,transport, storage and recovery of hazardous and non-
hazardous solid waste.  It includes design,
management or other services for waste handling(including collection of waste and scrap), operation ofrecycling plants.  It includes services for outdoorsweeping and watering of streets, paths, parking lots,etc.  Services for treatment of low level nuclear waste
are included.
Excludes high level nuclear waste.Excludes services for manufacture of new materials or
products from recovered waste or scrap and
subsequent use of these materials or products.
D.  Other services
 Cleaning services of exhaust gases (CPC 9404)  Air pollution control
Emission monitoring and control services of pollutants
into the air, whether from mobile or stationary
sources; concentration monitoring, control and
reduction services of pollutants in ambient air.Design, managing systems or providing other services
for treatment and/or removal of exhaust gases and
particulate matter from both stationary and mobile
sources
  Noise abatements services (CPC 9405)   Noise and vibration abatement
Noise pollution monitoring, control and abatement
services, e.g. traffic-related noise abatement in urbanareas.Design, managing systems or providing other services
to reduce or eliminate the emission of noise andvibration both at source and dispersed.  Includesdesigning, management or other services for acousticand sound-proof screens and street covering.S/C/W/46
Page 19
MTN.GNS/W/120 C LASSIFICATION  (WITH THE
"OTHER " CATEGORY ELABORATED USING THE CPC)OECD/E UROSTAT MANUAL CLASSIFICATIONS
POLLUTION MANAGEMENT GROUP
  Nature and landscape  protection services
(CPC 9406)
Ecological system protection services, e.g. of lakes,
coastlines and coastal waters, dry land, etc. including
their respective fauna, flora and habitats.
Services consisting in studies on the interrelationship
between environment and climate (e.g. greenhouseeffect), including natural disaster assessment andabatement services.  Landscape protection services
n.e.c.
Excludes forest and damage assessment and abatement
services (in CPC 881, GATS 1F(f).  Servicesincidental to agriculture, hunting and foresting)
  Other environmental pr otection services n.e.c.
(CPC 9409)
E.g. acidifying deposition ("acid rain"), monitoring,
controlling and damage assessment services  Remediation and cleanup of soil, surface water
and groundwater.
Design, operation of systems or provision of other
services to reduce the quantity of polluting materials
in soil and water, including surface water,
groundwater and sea water.  Includes cleaning-upsystems either in situ or in appropriate installations,emergency response and spills cleanup systems.Treatment of water and dredging residues areincluded.
  Analytical services, data collection, analysis and
assessment
Design, manage systems or provision of other services
to sample, measure, and record various characteristicsof environmental media.  Includes monitoring sites,both operating singly and in networks, and coveringone or more environmental medium.  Health, safety,toxicology studies, and analytical laboratory services
are included.  Weather stations are excluded.
[Business Services – R& D natural sciences and
engineering;  CPC 85]    as well asEnvironmental Services – Other Services, CPC
9406,  9409  Environmental R&D
Any systematic and creative activity which is
concerned with the generation, advancement,dissemination and application of scientific andtechnological knowledge to reduce or eliminate
emissions in all environmental media and to improve
environmental quality.  Includes creative scientific andtechnological activities for the development of cleanerproducts, processes and technologies.  It includes non-technological research to improve knowledge of eco-systems and the impact of human activities on the
environment.
[Construction and related  engineering services
(CPC 51330)]Services related to activities for the construction and
installation of facilities for:  air pollution control;waste water management; solid waste management;remediation and cleanup of soil, water andgroundwater;  noise and vibration abatement;
environmental monitoring;  analysis and assessment;
other environmental facilities.
Other environmental pr otection services, CPC
9409;  possibly also [5 – Educational Services –Other]  Education, training, information
Provision of environmental education or training or
dissemination of environmental information and whichis executed by specialised institutions or specialised
suppliers.  Includes education, training, and
information management for the general public, andspecific environmental work place education andtraining.  The activities of the general educationalsystem are excluded.
Source:  OECD with minor modifications
Note:  Items in square brackets belong to sectors other than environmental services in the MTN.GNS/W/120 classificationS/C/W/46
Page 20
Table 2A:  OECD Environment Industry Output, 1990
Percentages
Canada United
StatesEurope Japan OECD
Waste-water management
Solid waste management
Air pollution controlOther
1
Total48
24
1513
10032
34
1618
10045
20
2213
10028
28
3212
10038
28
2014
100
1  Includes noise control, laboratory equipment, land remediation, resource conservation, etc.
Source: OECD
Table 2B:  Environment Industry Employment, 1992
Employment
(thousands)1Share of total
employment (per cent)OECD estimated shares
(per cent)2
United States
CanadaJapan
France
GermanyItalyNetherlandsFinlandNorway
Switzerland
Australia1 070.0
65.0
580.0
110.0
171.5
12.724.415.0
4.2
15.6
11.00.91
0.530.90
0.49
0.480.060.370.690.21
0.45
0.140.69
0.720.90
0.98
0.59
1.36
1 Employment values relate to different years (1990, 1992, 1993), are based on widely differing national definitions usually
covering only part of the industry.
2  OECD  Secretariat employment estimates are derived as the ratio between total production and GDP, assuming that the industry
has average labour intensity.
Source:  OECDS/C/W/46
Page 21Table 3:  The Global Environmental Market, 1996
(Billions of dollars)
USA W
EuropeJapan Asia Latin
AmCanada Aus/
NZE
EuropeMid
EastAfrica Total$ Total%
EQUIPMENT
Water equipment & chemicals
Air pollution control
Instruments & information sys.
Waste management equipmentProcess/prevention technology16.0
15.4
1.8
10.7
0.910.5
7.3
1.6
9.10.55.6
3.3
1.0
8.60.52.7
0.9
0.2
1.30.10.9
0.4
0.2
0.70.11.2
0.6
0.1
0.80.10.7
0.3
0.1
0.40.00.8
0.4
0.1
0.40.00.4
0.3
0.1
0.20.00.3
0.0
0.0
0.10.038.9
29.0
5.2
32.4
2.38.6
6.4
1.1
7.20.5
SERVICES
Solid waste management
Hazardous waste managementConsulting & engineering
Remediation & industrial serv.
Analytical servicesWater treatment services32.7
5.9
14.2
8.3
1.2
24.629.5
5.28.4
3.7
1.0
21.829.6
3.81.1
1.1
0.59.63.4
0.50.8
0.4
0.12.71.3
0.20.3
0.2
0.11.82.2
0.40.9
0.5
0.12.01.4
0.20.5
0.3
0.11.21.1
0.30.3
0.2
0.10.60.8
0.20.2
0.3
0.00.30.3
0.00.1
0.0
0.00.2102.2
16.826.8
15.0
3.2
64.822.6
3.75.9
3.3
0.7
14.3
RESOURCES
Water utilities
Resource recovery
Environmental energy27.0
11.6
1.419.7
13.6
1.512.2
9.2
1.04.5
1.1
0.42.1
0.4
0.22.0
0.7
0.11.3
0.3
0.12.4
0.4
0.11.2
0.1
0.00.8
0.1
0.173.0
37.7
4.916.2
8.3
1.1
Total $ 171.8 133.5 87.1 18.9 8.8 11.6 6.8 7.1 4.3 2.2 452
Total % 38.0 29.5 19.3 4.2 1.9 2.6 1.5 1.6 1.0 0.5 1
Growth Forecast 98-00 1 . 8 2 . 8 2 . 6 1 2 1 23488 1 03
Source:  Environmental Business International, Inc.S/C/W/46
Page 22
Table 4:  Environmental Serv ices in the United States
Description Examples of clientsAverage
$/
employeeTotal
jobsRevs($Bil)
1994Ownership in
1994SegmentNumber
of
companies
/
entitiespub
%priv
%Growth
in
revenue
94-95 Growth
in
revenue
95-96
Environmental
Testing &
Analytical servicesProvide testing of
"environmental
samples" (soil, water,
air and some biologicaltissues)Regulated industries.
Gov't, Environmental
consultants
Hazardouswaste/remediation cos1400 82000 20000 1.6 8 92 -8.3 -2.5
Water Treatment
WorksManagement and
operation of waste-water treatment plants& infHouseholds.
Commercial firms andAll industries27000 226000 113700 25.7 95 5 3.3 2.5
Solid Waste
ManagementCollection, processing
and disposal of solid
waste & recyclablesMunicipalities & All
industries5900 135000 229600 31.0 33 67 4.8 4.3
Hazardous Waste
ManagementManage on-going
hazardous wastestreams, medical waste,nuclear waste handlingChemicals, Petroleum
companies otherindustriesGovernment agencies,
DOD2500 120000 53300 6.4 10 90 -3.1 -3.5
Remediation/Indust
rial ServicesPhysical cleanup of
contaminated sites,buildings andenvironmental cleaningof operating facilitiesGovernment agencies
Property ownersIndustry3800 86000 100000 8.6 0 100 2.3 -0.3
Environmental
Consulting &
Engineering (C&E)Engineering,
consulting, design,
assessment, permitting,
project management,O&M, monitoring, etc.Industry, Government
Municipalities
Waste management,
companies5900 94000 162800 15.3 0 100 1.3 -1.9
Source :  Compiled from Environmental Business International, Inc.S/C/W/46
Page 23
Table 5A  Environmental Industry Trade Balances
for Selected Countries, 1992
(millions of dollars)
United States
CanadaJapan
Germany
FranceUnited KingdomMexicoChinaKorea
Chinese Taipei1,113
-284
478
720
1414
-286
-19
-7
-612
Source:  OECD
Table 5B:  United States Environmental Trade, 1996
(billions of dollars)
US ind US mkt surplus exports imports %exp96
EQUIPMENT
Water equipment & chemicals
Air pollution controlInstruments & informationWaste management
Process/prevention technology17.5
15.7
3.1
12.0
0.816.0
15.4
1.8
10.7
0.91.5
0.31.31.3
-0.13.3
1.61.61.9
0.01.8
1.30.30.6
0.119
105116
1
SERVICES
Solid waste management
Hazardous waste managementConsulting & engineeringRemediation & industrial services
Analytical services
Water treatment services33.9
6.0
15.2
8.6
1.2
24.032.7
5.9
14.2
8.3
1.2
24.61.2
0.11.00.3
0.0
-0.61.4
0.21.30.3
0.0
0.20.2
0.10.3
.0
0.0
0.84
393
2
1
RESOURCES
Water utilities
Resource recoveryEnvironmental energy26.4
14.3
2.427.0
11.6
1.4-0.7
2.70.90.1
2.91.10.8
0.20.21
2048
TOTAL 181.1 171.8 9.3 16.0 6.7 8.8
Source:  Environmental Business International, Inc.
Note:  Trade figures only partially take into account sales through commercial presence.S/C/W/46
Page 24
Table 6:  Growth Prospects1 and Potential Advantages2 in Selected Countries and Regions
Country or regional area High Growth Moderate growth Low growth Potential advantage
Northern Europe Monitoring Land remediation Waste management Monitoring
Germany High-tech products
RecyclingAir pollution Water treatment
Waste managementWaste-water
Waste treatmentLand remediation
Measurement and analysis
France Waste management Monitoring services
Noise pollutionAir pollution Waste-water
Recycling
United Kingdom Waste-water
Land remediationWaste managementMonitoring Air control
Waste managementWaste-water
Waste management
Southern Europe Water and waste-water Air pollution Waste management Water quality
Italy Waste management Air pollution Waste-water
Land remediationWaste management
United States Waste management
Land remediationAir pollution Water and waste-water Monitoring
Remediation: nuclear,
mining, agriculture,chemicalsBiotechnologiesAir pollution
Canada Waste-water Air pollution Waste management Toxic emission:  industrial
and resources
Japan Air pollution Waste management water and waste-water Air pollution:  urban and
industry
Australia Mine remediation
Consultancy servicesWater and waste-waterIndustrial remediation
Clean productionAir monitoringAir control
Solid wastemanagementMine remediation
Consultancy services
Source:  OECD
1 Columns 2, 3, 4 present growth prospects according to national opportunities.
2  Column 5 presents potential advantage according to opportunities in international markets.S/C/W/46
Page 25
Table 7:  Top 50 Environmental Companies in the World, by Revenue in 1995
Companies Country Segment Env'l Revs
$mil
WMX Technologies
Générale des Eaux
Browning Ferris Industries
Lyonnaise des EauxAsea Brown Boveri Corp.RWE EntsorgungMitsubishi Heavy Industries
Laidlaw Inc.
Ebara CorpSabespPhillip HolzmannSevern TrentCGEA
Noell Gmbh
Jacobs Engineering GroupBilfinger + BergerBuderusUnited UtilitiesHochtief
Linde
Deutsche BabcockSITAThames WaterVA-Technologie
Anglian Water
Bechtel Group Inc.Kunta Water IndustriesRethmannDegremontSafety Kleen Corp
ICF Kaiser International Inc.
American Water Works Co.GEA Pref.ElyoYorkshire WaterCH2M Hill Cos.
Nalco Chemicals Co.
Philip EnvironmentalAlba AG&CoThermo Electron Corp.Ogden Corp.Morrison-Knudsen Corp.
Air & Water Technologies
Hitachi ZosenFerrailes, CFEdelhoff AG&CoKubota
Durr
HeidemijBlack & VeatchUSA
France
USA
FranceSwitzerlandGermanyJapan
Canada
JapanBrazilGermanyUKFrance
Germany
USAGermanyGermanyUKGermany
Germany
GermanyFranceUKAustria
UK
USAJapanGermanyFranceUSA
USA
USAGermnayFranceUKUSA
USA
CanadaGermanyUSAUSAUSA
USA
JapanFranceGermanyJapan
Germany
HollandUSASolid Waste/Diversified
Water/SW/Diversified
Solid Waste
Water/DiversifiedDiversified/EquipmentSolid WasteIncin/APC/Water Equip.
Solid/Hazardous Waste
Water/Incin. EquipWaterSolid Waste /ECWater/WW/C&ESolid Waste (Generale)
APC/EC
C&EECDiversifiedWater/WW/EquipEC
Equip/C&E
Div/EquipSol/Haz WasteWater/WW EquipmentDiversified
Water
ECEquipmentSolid WasteWater EquipmentHazardous Waste/Recycling
C&E
WaterECWaste ManagementWaterC&E
Water Equipment/Chemicals
Solid/Hazardous WasteSolid WasteInst/C&EWTE/C&EC&E/EC
Diversified
DiversifiedWaste/RecycSolid WasteEquip
Equip/IS
C&EC&E/EC
Top 50 share
Global market10,250
9,910
5,880
5,6205,4002,9702,350
2,270
2,2001,9601,8601,6901,620
1,590
1,4691,3101,2801,2101,210
1,102
1,1001,0701,0701,010
990
902900890880866
849
820816815795753
734
732730728680678
630
602579570558
554
540538
86,530
20%
440,000
Source:  Environmental Business International, Inc.
Note:  APC air pollution control C&E consulting and engineering
EC engineering and construction services IS industrial services
WW waste water managementS/C/W/46
Page 26Table 8: Summary of Specific Comm itments on Environmental Services
Other
Countries Sewage ServicesRefuse Disposal
ServicesSanitation and
Similar Services Cleaning services
of exhaust gasesNoise Abatement
servicesNature and
landscape
protection
servicesOther
environmental
protection
services
Australia X X  X
A u s t r i a X X X XXX  X
Bulgaria X X X X X X
C a n a d a XXXX X XX
Central African Rep. X
Colombia XX
Czech Rep. X X X
Ecuador X X X X X X X
El Salvador X X X X
European
CommunityXXXX XX
F i n l a n d X XXX X
Gambia X X
Guinea X X
Hungary X X
Iceland X X X X X X X
I s r a e l XXXX X
J a p a n X X X XXX X
Korea RP X X X X X X
Kuwait X X X
L e s o t h o X X X XXX
Liechtenstein X X X X X X XS/C/W/46
Page 27Table 8 (cont'd):  Summary of Specifi c Commitments - Environmental Services
Other
Countries Sewage ServicesRefuse Disposal
ServicesSanitation and
Similar ServicesCleaning
services of
exhaust gasesNoise Abatement
servicesNature and
landscape
protection
servicesOther
environmental
protection
services
Morocco X X X X X X X
Norway X X X X X X X
Panama XX X
Poland XX
Qatar X X X X X X X
Romania XX XX
Rwanda X
Sierra Leone X X X X X X X
Slovak Republic X X X
Slovenia X X X X
South Africa X X X X X X
Sweden X X X X X X X
Switzerland X X X X X X X
Thailand X X X X X X X
Turkey X X X
United Arab
EmiratesXX X X X X X
USA X X X X X X X
Total 29 29 30 27 26 27 21S/C/W/46
Page 28Table 9A: Numerical summary of commitments on modes 1, 2 and 3 in environmental services
(Number of Members and % share of GDP)
SectorCross-border supply
(Mode 1)Consumption abroad
(Mode 2)Commercial presence
(Mode 3)Memberswithcommit-ments(% share of
GDP of all
Members)Members
with fullcommit-ments onmodes 1, 2
& 3Full
Limited Unbound Unbound Full Limited Unbound Full Limited Unbound
Sewage
Services29
(87.6%)1
(0.1%)3
(0.3%)6
(35.7%)10
(61.4%)10
(2.7%)12
(27.8%)13
(71.9%)4
(0.3%)2
(0.2%)27
(99.7%)0
(0%)
RefuseDisposal
Services29
(88.3%)1
(0.1%)3
(0.4%) 6
(35.5%)10(60.9%)10
(3.2%)13
(62.1%) 12
(37.7%)4(0.3%)2
(0.2%) 27
(99.6%)0(0%)
Sanitation
& Similar
Services30
(86.1%)2
(0.1%)5
(0.5%)5
(34.4%)10(62.5%)10
(3.2%)15
(63.21%) 11
(36.5%)4(0.3%)3
(0.2%) 27
(99.8%)0(0%)
Note: Full:  complete sectoral coverage, no market access or national treatment limitations;  Limited:  incomplete sectoral coverage or market access/national treatment limitations;
Unbound:  both market access and national treatment unbound or market access unbound.
Unless otherwise indicated (as in the second column), percentages for each subsector are calculated as a share of GDP of all Me mbers with commitments in the sector.
Table 9B: Numerical analysis of limitations maintained by Members in environmental serv ices (figures in shaded columns in above table)
(Number of Members and % share of GDP)
Cross-border supply Consumption  abroad Commercial presence
Sector-specific limitation
other than on sectoral
coverageOnly
horizontal
limitationSector-specific limitation
other than on sectoral
coverageOnly
horizontal
limitationSector-specific limitation
other than on sectoral
coverageSector Limita-
tions onsectoralcoverageOnly
horizontal
limitation
MA NT MA NT MA NT
Sewage
Services11
(36.3%)1
(2.5%)0
(0%)0
(0%)5
(4.5%)0
(0%)0
(0%)16
(31.9%)2
(2.0%)1
(0.7%)
RefuseDisposalServices11
(36.1%)1
(2.5%)0
(0%)0
(0%)6
(4.5%)0
(0%)0
(0%)15
(41.9%)6
(25.5%)1
(0.7%)
Sanitation& similarservices10
(35.0%)1
(2.5%)0
(0%)0
(0%)6
(4.5%)0
(0%)0
(0%)20
(67.1%)0
(0%)1
(0.7%)
Note:  Some members have maintained limitations on sectoral coverage as well as horizontal and sector-specific limitations.  Th e figures in the rows do not, therefore, add up to the number
of Members with limitations.  Percentages for each subsector are calculated as a share of GDP of all Members with commitments i n the sector.S/C/W/46
Page 29Table 10:  Limitations on sectoral coverage  in commitments on environmental services
Country Exclusion from Sewage Services Exclusion from Refu se Disposal Services Exclusio n from Sanitation Services
BulgariaThe commitments do not apply to services related to the collectio n, transportation, storage, secondary use, recycling, restorat ion, use in  the
production of energy and materials, and disposal of dangerous waste, refuse and substances.The commitments do not include environmental services supplied in the exercise of governmental authority.  These are regulatory
administrative and control services by government and municipal bodies related to environmental issues.
Israel Not including industrial activities
Korea RP Only collection and treatment services of
industrial waste water.Only collection, transport and disposal services of
industrial refuse.
Lesotho All entries in this sector are re stricted to consultancy services only.
LiechtensteinNothing in this commitment should be construed to include pub lic work function whether owned and operated by municipalities or
Liechtenstein government or contracted out by them.
NorwayThese commitments do not include public service functions whether owned and operated or contracted out by local, regional or ce ntral
government.
Slovenia Public utility exist; concession rights can be granted to  the private operators established in the Republic of Slovenia .
South Africa All entries in this sector are restricted to consultancy services only.
SwedenCommitments do not include public works functions whether owned and operated by municipalities, state or federal governments or
contracted out by these governments.
SwitzerlandCommitments do not include public work function whether owned and operated by municipalities, cantons or federal government or
contracted out by them.
USACommitments are limited to services contracted by private industries and the following activities: implementation and installat ion of new or
existing systems for environmental cleanup, remediation, prevention and monitoring; implementation of environmental quality con trol and
pollution reduction services; maintenance and repair of environm ent-related systems and facilities not already covered by the U S
commitments on maintenance and repair of equipment; on-site environmental investigation, evaluation, monitoring; sample collect ion
services; consulting on site or at the facility; consulting related to these areas.S/C/W/46
Page 30Table 11:  Limitations on Mark et Access/National Treatment
06.A. Sewage Services Market Access
Iceland Environmental operation license required.
Korea RP The number of service suppliers is limited to twenty-five(25).
06.B. Refuse Disposal Services
Iceland Environmental operation license required.
Japan The number of licences conferred to service suppliers of waste oil disposal at sea from vessels may be limited.
Korea RPEstablishment of a commercial presence is subject to th e economic needs test.  Refuse collection and transport
service suppliers may conduct business only within the jurisdiction of the respective Regional Environment Officewhich has granted them approval for operation.
Liechtenstein None; unbound for garbage dump.
Norway For some categories of waste there exists a monopoly.
Switzerland None, except unbound for garbage dump.
06.D. Other
El SalvadorIt is necessary to apply to the municipal authorities for the concession or licence to provide refuse disposal services,
with the requirement that the applicant be domiciled in El Salvador.
Iceland Environmental operation license required.
Korea RP Establishment of a commercial presen ce is subject to the economic needs test.
NorwayGovernment owned monopoly for control services of exhaust-gas from cars and trucks.  Such services must be
offered on a non-profit basis.
SwedenGovernment owned monopoly for control services of exhaust-gas from cars and trucks.  Such services must be
offered on a non-profit basis.
National Treatment
All Services
Thailand No Limitations as long as foreign eq uity participation does not exceed 49 per cent
__________