INF/TE/SSD/W/18  
 
23 March 2022  
(22-2484) Page: 1/27 
  Original: English  
 
TRADE AND ENVIRONMENTAL SUSTAINABILITY STRUCTURED DISCUSSIONS (TESSD)  
This factual note has been prepared by the Secretariat at the request of the Coordinators of the 
TESSD initiative.  It does not represent the official position of the WTO or of the WTO Secretariat . 
 
_______________  
 
EXPERIENCES IN THE PROMOTION AND FACILITATION OF  
ENVIRONMENTAL GOODS AND SERVICES  
Note by the Secretariat  
Contents  
1 INTRODUCTION  ................................ ................................ ................................ ............  2 
2 EXPERIENCES AND CURRENT EFFORTS IN EGS PROMOTION AND FACILITATION  .........  2 
2.1 Overview of past and ongoing initiatives  ................................ ................................ ...........  2 
2.2 Objectives  ................................ ................................ ................................ ....................  4 
2.3 Environmental goods  ................................ ................................ ................................ ..... 5 
2.4 Environmental services  ................................ ................................ ................................ .16 
3 RESE ARCH ON POTENTIAL BENEFITS AND CHALLENGES OF TRADE IN EGS  ................  21 
3.1 Trade effects  ................................ ................................ ................................ ................ 22 
3.2 Diffusion of environmental technology  ................................ ................................ ............. 23 
3.3 Environmental effects  ................................ ................................ ................................ ...23 
REFERENCES  ................................ ................................ ................................ ..................  25 
 
  INF/TE/SSD/W/18  
 
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  1  INTRODUCTION  
1.1.  The objective of this note is to provide a factual summary of past experiences and current 
efforts  in the promotion and facilitation of environmental goods and services (EGS), as well as an 
overview of research on the possible benefits and challenges of trade in EGS. It focuses on the 
experiences at the WTO in the negotiations on environmental goods and services , including  as part 
of the Doha Development Agenda ( DDA), as well as in negotiations on a plurilateral sectoral 
Environmental Goods Agreement (EGA).1 This is complemented by relevant information from other 
initiatives, including in the context of APEC and selected regional trade agreements (RTAs).  
2  EXPERIEN CES AND CURRENT EFFORTS  IN EGS PROMOTION AND FACILITATION  
2.1  Overview of past and ongoing initiatives  
2.1.  A number of initiatives have been undertaken by Members to promote and facilitate trade in 
EGS, including at multilateral (DDA) and plurilateral (EGA) levels , as well as outside the WTO, in the 
context of regional initiatives (for example, APEC). These initiatives reflect Members' recognition 
that trade in EGS has an important role to play in addressing mounting environmental challenges by 
fostering the deploy ment of existing green technologies and innovation of new technologies.  At the 
WTO, this recognition has led to an  evolution of the trade and environment debate towards a more 
pro-active, forward -looking approach, which seeks to use trade policy to support  environmental 
goals.  
2.2.  Multilateral negotiations  on EGS have taken place as part of the DDA. The Special Session of 
the Committee on Trade and Environment ( CTESS ) was established under the Trade Negotiations 
Committee (TNC) to conduct negotiations on trade and environment. Since work began in 2002, 
WTO Members carried out a substantial amount of work under Paragraph  31(iii), in particular  on the 
identification of environmental goods of interest.2 Since 2009, several contributions drew attention 
to the speci fic export interests of developing country Members, and to other issues such as special 
and differential (S&D) treatment, non -tariff barriers (NTBs), capacity building and transfer of 
technology. The reduction or elimination of tariff on environmental good s was also discussed in the 
context of the Negotiating Group on Market Access (NGMA)3, but without addressing the specific 
issues that were debated in the CTESS . In addition, environmental services are covered by the 
negotiating mandate in Article  XIX of the GATS and, starting in 2000, Members engaged in the 
negotiation of specific commitments in environmental and other services sectors in the Special 
Session of the Council for Trade in Services  (CTS-SS).4 
2.3.  APEC economies5 have long recognized the importance of trade in facilitating the diffusion of 
EGS, which they believe has the potential to lead to improved environmental outcomes. APEC has 
been advancing institutional frameworks to support this vision through APEC leader s' endorsements 
on initiatives such as: (i) the APEC Environmental Goods and Services Work Program (2008); (ii) the 
Yokohama Vision (2010); and (iii) Annex C (Trade and Investment in Environmental Goods and 
Services) of the Honolulu Declaration (2011).6 At the Vladivostok Ministerial meeting in 2012, APEC 
members agreed to apply tariff rates to 5% or less on a list of 54 HS codes . Alongside progress on 
the liberalization of trade in environmental goods, APEC economies have also engaged in work to 
promote l iberalization, facilitation and cooperation in environmental services under the 
"Environmental Services Action Plan" (ESAP) endorsed by APEC Ministers in 2015.7 
 
1 The EGA negotiations included 18 participants representing 46 WTO Members.  
2 See the report by the Chairperson of the CTESS contained in TN/TE/ 19 (22 March  2010). At the first 
meeting of the CTESS (TN/TE/R/1), Members agreed to focus on goods in the CTESS  while services would be 
covered in the Special Session of the Council for Trade in Services.  
3 See e.g. JOB(06)/200/Rev.1, p. 21.  
4 The GATS "built -in" mandate in Article XIX calls for "successive rounds of negotiations … with a view to 
achieving a progre ssively higher level of liberalization […]".  
5 Australia; Brunei Darussalam; Canada; Chile; China; Hong Kong, China; Indonesia; Republic of Korea; 
Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; Philippines; Russian Federation; Singapore; 
Chinese  Taipei; Thailand; United States ; and Viet Nam.  
6 https://www.apec.org/meeting -papers/leaders -declarations/2011/2011_aelm/2011_aelm_annexc   
7 https://www.apec.org/meeting -papers/leaders -declarations/2012/2012_aelm   INF/TE/SSD/W/18  
 
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  2.4.  Building on the APEC initiative on environmental goods, in 2014, 14 WTO Members8 launched 
negotiations for the establishment of an Environmental Goods Agreement (EGA)  to remove trade 
barriers on environmental goods that are important for protecting the environment  and addressing 
climate change. The so -called Davos statement described the objective of the EGA negotiations as 
follows: "We are convinced that one of the most concrete, immediate contributions that the WTO 
and its Members can make to protect our planet is to seek agreement to eliminate tariffs for goods 
that we all need to p rotect our environment and address climate change".9 Participation eventually 
grew to include 18 WTO Members (46 Members counting the EU member states individually), with 
the last negotiating round taking place in December 2016.10 
2.5.  The proliferation of RTAs, which by definition should cover substantially all trade, has 
contributed to the removal of tariffs on environmental goods among the parties to these agreements. 
In addition, a number of RTAs make reference to cooperation and promotion on trade and inve stment 
in EGS or have addressed the issue in more specific terms. For example, the Agreement between 
New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on 
Economic Cooperation (ANZTEC) came into force in 2013 and removes al l tariffs on a specific list of 
132 environmental goods.11 In addition, this RTA also aims to facilitate the movement of 
business  persons (mode 4) for the sale, delivery or installation of environmental goods or the supply 
of environmental services.  The New Zealand -United Kingdom  Free Trade Agreement , signed on 
28 February 2022, will prioriti ze the liberali zation of 293 environmentally beneficial products  – the 
largest such list agreed in any RTA to date .12 Under Article 22.7(2a), the Parties will keep the  
environmental goods  list under review for potential modifications in relation to the extent to which 
goods contribute to "green growth and sustainable development objectives of the Parties, advances 
in ava ilable technologies, and potential dual -use of environmental goods".  
2.6.  Other RTAs make reference to sectors or goods that could provide positive environmental or 
economic outcomes including renewable energy goods and related services, energy efficient 
produc ts or eco -labelled goods and services, sustainable construction materials, or environmental 
technologies  (USMCA, EU -Singapore FTA, EU -UK TCA, moderni zed EFTA -Turkey FTA).13 Certain RTAs 
broadly recognize the importance of trade and investment in EGS, inclu ding as a means to improving 
environmental and economic performance (USMCA , Article  24.24) ; strengthening cooperation on 
environmental matters to increase trade and investment in EGS (US -Morocco FTA , Article  17.3(7)) ; 
promot ing public awareness and educati on programmes on EGS to foster  their trade 
(CARIFORUM -EU Economic Partnership Agreement , Article  190(f)) ; or generally promot ing and 
encourag ing the facilitation of trade and investment in EGS.14 
2.7.  The launch of the initiative towards an Agreement on Climate  Change, Trade and Sustainability 
(ACCTS)  was announced  on 25 September 2019 by  New Zealand, Fiji, Iceland, Norway  and 
Costa  Rica, and was later joined by Switzerland. The initiative seeks to : (i) remove tariffs on 
environmental goods and establish new commitments for environmental services ; (ii) establish 
disciplines to eliminate harmful fossil fuel subsidies ; and (iii) develop guidelines to inform the 
 
8 WTO Members that launched the EGA are: Australia; Canada; China; Costa Rica; European Union; 
Hong Kong, C hina; Japan; Korea; New Zealand; Norway; Singapore; Switzerland; Chinese Taipei; and 
United  States.  
9 Joint Statement Regarding Trade in Environmental Goods, done in Davos, Switzerland, on 
24 January  2014. See https://ustr.gov/sites/default/files/EGs -Announcement -joint-statement -012414 -
FINAL.pdf   
10 WTO Members that participated in the EGA negotiations were: Austr alia; Canada; China; Costa Rica; 
European Union (including all current EU member States and United Kingdom), Hong Kong, China; Iceland; 
Israel; Japan, Korea; Liechtenstein; New Zealand; Norway; Singapore; Switzerland; Chinese Taipei; Turkey; 
and United Sta tes. 
11 ANZTEC Annex 7, "Environmental Goods List" – https://www.nzcio.com/assets/NZCIO -
documents/ANZTEC -Env-goods -Annex -7-10-July-2013-NZ.pdf   
12 See NZ-UK FTA Key Outcomes:  https://www.mfat.govt.nz/assets/Trade -agreements/UK -NZ-FTA/NZ -
UK-FTA-Key-Outcomes.pdf  
13 Further reading on climate trade provisions  in RTAs –
https://www.wto.org/english/tratop_e/envir_e/climate_change_rta.pdf  
14Promoting trade and investment in EGS is specifically noted in RTAs, including EU -Colombia -Peru FTA 
Article 271(2)), CETA Article 24.9(1), EU -Japan FTA Article 16.5(b), and EU -CARIFORUM FTA Article 190(f).  INF/TE/SSD/W/18  
 
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  development and  implementation of voluntary eco -labelling programmes and mechanisms. The  
seventh and most recent round of negotiations took place from 9 November to 7 December 2021.15 
2.2  Objectives  
2.8.  Initiatives to promote trade in environmental goods and services broadly share the goal of 
enhancing the contribution of trade and trade policies to environmental protection, economic growth 
and sustainable development. More recent initiatives make explicit reference to the importance of 
addressing climate change.  
2.9.  In the Doha Ministerial Declaration  (Paragraph 31(iii) ) that launched the DDA, Members ag reed 
to negotiations on the reduction or, as appropriate, elimination of tariff and non -tariff barriers to 
environmental goods and services "with a view to enhancing the mutual supportiveness of trade and 
environment ".16 The overall intention of the negoti ations was to create a "triple-win" – for trade, for 
environment and for development. A reduction in trade barriers would facilitate trade, which in turn 
could lead to positive outcomes for the environment and development.  
2.10.   APEC's efforts to reduce barriers to environmental goods has been part of a broader effort to 
reduce trade barriers starting in 1990s , according to Steenblik (2005) . In 1996, APEC leaders 
directed trade ministers to "identify sectors where early voluntary liberalisation would have  a positive 
impact on trade, investment and economic growth in the individual APEC economies as well as in 
the region and submit recommendations on how this can be achieved". By the APEC leaders' Summit 
in 1997, environmental goods and services had been id entified as one of the sectors which enjoyed 
the greatest support for voluntary sectoral liberali zation.  
2.11.   At the 2010's APEC Economic Leaders' Meeting (Yokohama, Japan), the Leaders of APEC 
broadly articulated their vision of further integrating the Asia -Pacific region into the 21st century 
and spelled out specific motivations to preserve the environment. APEC recognized the heightened 
challenges with regard to the protection of the environment and natural resources, including the 
necessity to jointly addres s climate change.17 It recognized that both economic growth and 
environmental sustainability should be advanced in a holistic manner, and progress toward a green 
economy should be accelerated by promoting trade and investment in environmental goods and 
services and developing this sector in APEC economies.18 APEC would contribute to the pursuit of a 
Free Trade Area of the Asia -Pacific (FTAAP) by continuing and further developing its sectoral 
initiatives, including on environmental goods and services.19 Also, APEC then agreed to support 
progress in the EGS negotiations in the WTO DDA.20 APEC's Green Growth Agenda (2011) sets the 
objectives of:  (i) increasing the dissemination and utilization of environmental goods and services; 
(ii) reducing existing barriers  and refraining from introducing new barriers to trade and investment 
in such goods and services; and  (iii) enhancing capabilities to develop this sector, by prioritizing 
work related to addressing non -tariff measures on environmental goods, technology and  services.21 
2.12.   APEC leaders have also recognized the need for complimentary liberalization of trade in 
environmental services, as well as capacity -building efforts to develop the sector. APEC's work 
pursuant to the 2015 ESAP has generated a series of reports  on the state of the region's 
environmental services sector, including on regulatory measures relating to environmental services 
in APEC economies, as well as sectoral reports on renewable energy, energy efficiency and 
environmental remediation industries.  Further work to advance the liberalization of trade in 
environmental services was conducted as part of the Final Review of the ESAP in December 2020 
covering methodologies to identify the scope of environmental services; good regulatory practices 
 
15 https://www.mfat.govt.nz/en/trade/free -trade-agreements/trade -and-climate/accts -negotiating -
rounds/#bookmark0   
16 WT/MIN(01)/DEC/1.  
17 APEC, "The Yokohama Vision – Bogor and Beyond", p. 2.  
18 APEC, "The Yokohama Vision – Bogor and Beyond", p. 3.  
19 APEC, "The Yokohama Vision – Bogor and Beyond", p. 4; 18 th APEC Economic Leaders' Meeting, 
Pathway to FTAAP.  
20 APEC, 22nd APEC Ministerial Meeting, Yokohama, Japan, 10 -11 November 2010.  
21 "APEC 2011 Leaders' Declaration", Honolulu, Hawaii, United States, 11 -12 Novemb er 2011, 
https://www.apec.org/meeting -papers/leaders -declarations/2011/2011_aelm . INF/TE/SSD/W/18  
 
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  and capa city-building on licensing and approval procedures for environmental services suppliers; 
and capacity -building needs of technicians and workers in the sector.22 
2.13.   The EGA negotiations were launched through a joint statement by a group of 14 Members at 
Davos,  Switzerland, in January 2014. Building on the commitment of APEC Leaders, the group 
announced their "commitment to achieve global free trade in environmental goods, and pledge to 
work together, and with other WTO Members similarly committed to liberalizat ion, to begin preparing 
for negotiations in order to advance this shared goal. … We are convinced that one of the most 
concrete, immediate contributions that the WTO and its Members can make to protect our planet is 
to seek agreement to eliminate tariffs f or goods that we all need to protect our environment and 
address climate change." Members furthermore committed to explore "a broad range of additional 
products, in the context of a future oriented agreement able to address other issues in the sector 
and to respond to changes in technologies in the years to come, that can also directly and positively 
contribute to green growth and sustainable development."23 
2.14.   The objective of the ACCTS  initiative is for trade and trade policies to contribute positively to 
climate change and sustainability and bring together some of the inter -related elements of the 
climate change, trade and sustainable development agendas and demonstrate how they can be 
mutually reinforcing. A further objective of the ACCTS is to encourage other WTO Members to join, 
so that the ACCTS can become the foundation for multilateral action, as well as an example on how 
trade rules can substantively help address climate change an d other serious environmental 
challenges. Measures to be covered by the ACCTS, inter alia , include: (i) the removal of tariffs on 
environmental goods and binding commitments on environmental services; and (ii) the development 
of guidelines to inform the development and implementation of voluntary eco -labelling programmes 
and mechanisms to encourage their pro motion and application.24 
2.3  Environmental goods  
2.3.1   Experiences in the identification of environmental goods  
2.15.   Any tariff negotiation seeking to reduce or eliminate tariffs in specific products requires first 
and foremost identifying these products. Past and curre nt initiatives have employed different 
approaches in defining such "product coverage".  
2.3.1.1   Defining "environmental goods"  
2.16.   One approach to negotiating tariffs applicable to environmental goods is to begin by adopting 
a definition of an "environmental good", to then identify those specific products that meet the agreed 
definition. For example, in 2002, the CTESS  negotiations initially focused work on a possible 
definition of environmental goods. However, given the challenges faced in defining environmental 
goods and the concerns expressed by some delegations, it was suggested early on that agreeing on 
a definition was not necessary. Members opted to follow a practical approach that consisted, rather, 
in listing those goods of interest to Members (see below) , so-called "defining by listing" appro ach.25 
2.17.   The 1999 OECD and Eurostat list of environmental goods, which provided useful background 
and inspired some of the discussions in the CTESS , also illustrates this approach. The OECD and 
Eurostat discussions began by de veloping a working definition of environmental goods and services, 
 
22 See APEC Group on Services, "Study for Final Review of Environmental Services Action  Plan (ESAP)", 
December 2020.  
23 https://ustr.gov/sites/default/files/EGs -Announcement -joint-statement -012414 -FINAL.pdf   
24 https://www.mfat.govt.nz/en/trade/free -trade-agreements/trade -and-climate/agreement -on-climate -
change -trade -and-sustainabili ty-accts-negotiations/  and ACCTS Joint Leader's Statement . 
25 See report by the Chairperson of the Special Session of the Committee on Trade and E nvironment to 
the Trade Negotiations Committee contained in TN/TE/2 (4 July 2002). Numerous comments were made on 
this definition, with concerns raised on issues such as: how products with multiple end -uses would be 
classified; whether process and producti on methods (PPMs) and end -use criteria would be needed to define 
environmental goods and what the implications of that would be on the concept of "like products"; how the 
harmonized system would capture those goods; and how the relativity of the concept of  "environmental 
friendliness" would be tackled (since some goods considered environmentally friendly in some parts of the 
world could be seen as unfriendly in others). One delegation argued that, while it was important not to rule out 
a definitional approa ch for work on environmental goods, definitions should not be seen as a precondition for 
progress to be made.  INF/TE/SSD/W/18  
 
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  which were defined as those "[goods and services that] measure, prevent, limit, minimize, or correct 
environmental damage to water, air, and soil, as well as problems related to waste, nois e and 
eco-systems." Once the conceptual exercise of the definition had been concluded, the discussions 
then turned to trying to identify the products that met this definition. One important point to bear 
in mind with respect to the OECD list of products, b esides the fact that it was not developed in the 
context of a tariff negotiation, is that it was not intended to be exhaustive, but only illustrative.26 
2.3.1.2   Approaches based on lists of goods or sectors  
2.18.   A second approach is to define the product coverage by di rectly listing goods or sectors that 
are considered to fulfil certain environmental objectives.  
2.19.   In the CTESS , between 2002 and 2010, several Members and groups of Members submitted 
lists of environmental goods and categories with a view to reaching a multi lateral agreement to 
liberalize trade on an agreed list of environmental goods.27 This so -called "list -based approach" had 
seen the most engagement and submissions over the years. Some Members put forward revised 
and new approaches to address some of the s pecific concerns that had been raised by developing 
Members. For example, under a suggested "request and offer" approach Members would participate 
voluntarily in bilateral negotiations on the basis of requests and offers on those goods that they 
consider t o be environmental goods important to their sustainable development efforts, and for 
which they were willing to assume liberalization commitments.28 Another proposal outlined a possible 
combined approach between the list -based approach and the request and offer approach.29 
2.20.   The list -based approach resulted in a universe of 409 unique tariff lines at the HS subheading 
(six-digits) level that were proposed for inclusion, which was based on a compilation of six separate 
lists that had been submitted by 13 Membe rs: Qatar, Kingdom of Saudi Arabia, Philippines, 
Singapore, Japan, and the Group of Friends (Canada, European Communities, Japan, Republic of 
Korea, New Zealand, Norway, Chinese Taipei, Switzerland, and the United States).30 Table 1 shows 
the number of uni que subheadings and top HS chapters covered by the six lists.  
Table 1. Overview of Members' lists of proposed goods  
WTO Members  Number of unique 
subheadings  
(HS 2002, six -digits)  Top 2  
HS chapters  
Group of Friends  164 84, 90  
Japan  59 87, 85  
Qatar  20 84, 27  
Philippines  17 84, 85  
Singapore  72 90, 84  
Kingdom of Saudi Arabia  259 84, 73  
Source: Unofficial room document RD/TN/TE/2.  
Note: The last column of the table identifies the two HS chapters with the largest number of tariff lines included 
in each of the lists submitted to the CTESS . The HS chapter headings referred to in the table are: 27 (mineral 
 
26 A note to the OECD list states that "The list is not exhaustive; not all environmental goods are 
covered. Some environmental goods have no equi valent HS commodity code. Some HS commodity codes 
include goods which may not be environmental goods." See OECD (1999), "Future Liberalisation of Trade in 
Environmental Goods and Services: Ensuring Environmental Protection as well as Economic Benefits", 
COM/TD/ENV(98)37/FINAL, Paris.  
27 See unofficial room document RD/TN/TE/2 for an overview of the submissions by Members.  
28 JOB(07)/146 (Brazil, 1  October  2007); JOB(09)/184 (Brazil, 15  December  2009).  
29 JOB/TE/16 (Mexico and Chile, 11 March 2011); JOB/TE/16/Corr.1 (Mexico and Chile, 21 March 2011).  
30 JOB/TE/3/Rev.1 − Compilation of Submissions under Paragraph 31(iii) of the D oha Declaration 
Pursuant to the CTESS  Work Programme, 5 January 2011. Individual submissions: JOB(09)/132 (Canada, 
European Communities, Japan, Republic of Korea, New Zealand, Norway, Chinese Taipei, Switzerland and 
United States, 9  October  2009); TN/TE/W/75 (Japan, 27 November 2009) ; TN/TE/W /75/Add.1 (Japan, 
16 February 2010) ; TN/TE/W/75/Add.2 (Japan, 10 January 2011); JOB(09)/169 (Kingdom of Saudi Arabia, 
6 November 2009) ; JOB(09)/169/Add.1 (Kingdom of Saudi Arabia, 15 December 2009) ; JOB(09)/169/Add.2 
(Kingdom of Saudi Arabia, 21 July 2010) ; TN/TE/W/19 (Qatar, 28 January 2003) ; TN/MA/W/24 (Qatar, 
28 January 2003) ; JOB/TE/4 (Qatar, 14 June 2010); JOB/TE/2 (Philippines, 16 February 2010); JOB/TE/5 
(Singapore, 23 June 2010).  INF/TE/SSD/W/18  
 
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  fuels and oils); 73 (articles of iron and steel); 84 (boilers, machinery and mechanical appliances); 85 (electrical 
machinery and equipment); 87 (vehicles other than railway or tramway rolling -stock, and parts and accessories 
thereof); and 90  (optical, measuring, checking, precision in struments).  
2.21.   According to Balineau and de Melo (2013), the six lists diverge considerably and show limited 
overlap: not a single product appears on all six lists, and more than two -thirds of the products 
proposed are included in only one of them. In their v iew, this indicates diverging understandings 
and perceptions about which goods should be considered to be environmental.  At the same time , it 
may be noted that  among  the 13 Members that have submitted six lists, nine Members that 
constitute the Group of Friends ( with EU member States not counted individually) have been able to  
agree to a common list of 164 products . 
2.22.   In the EGA, the starting point was to agree on a list of ten broadly defined environmental 
goals, which are similar to those of the APEC and OECD lists, but with some variations. Thereafter, 
discussions focused on identifying which specific products addressed a particular environmental goal 
or challenge. The first five rounds of negotiations focused on discussing each of those 
10 environmental goals. Participants were also expected to nominate products that they considered 
to be relevant for each environmental area, including a justification of their environmental benefits. 
An initial list compiled such nominations and resulted in a very large n umber of products. On this 
basis, the negotiators then began to assess the nominations based on different criteria, including 
their "environmental credibility", as well as the degree of support by, and level of priority for, the 
different EGA participants.  In later rounds, participants exchanged lists of goods that they considered 
to be "acceptable" in the context of a final agreement, as well as those they considered to be 
"sensitive" (i.e. difficult to include for either trade -related or environmental rea sons). Through this 
process, by the 18 th and last round of negotiations, which took place in November 2016, the list 
had been progressively narrowed down to approximately 300  products.31 No agreement was reached 
on this list.  
2.23.   APEC negotiations took the OEC D definition of activities that form part of the environmental 
industry as a starting point for identifying a list of environmental goods.32 The APEC Environmental 
Goods List (APEC -EGL), agreed to in 2012, comprises 54 environmental goods (at the Harmonize d 
Standard six -digit level). In June 2021, APEC Trade Ministers affirmed their readiness to build on 
the APEC -EGL with the acknowledgement that, since 2012, new environmentally friendly goods, 
technologies and innovations had emerged that were not covered by the APEC -EGL.33 
2.24.   Table 1 summarizes the categories of goods included in the DDA, EGA and APEC negotiations. 
The DDA has the highest number of total goods from submissions provided by Members with 
411 HS subheadings (six -digit codes). From initial nominations, the EGA list was reduced to 
approximately 300 during the negotiations. APEC, with the only agreed list, is also the shortest with 
54 goods, all of which were also part of the EGA list.  
2.25.   It could be ar gued that the three "lists" (including submissions under the DDA), broadly reflect 
the OECD definition of environmental goods as "activities which produce goods and services to 
measure, prevent, limit, minimize, or correct environmental damage to water, ai r and soil, as well 
as problems related to waste, noise and ecosystems". As such, categories of goods included in all 
three initiatives included environmental activities such as air pollution, renewable energy, waste 
management and water treatment. Goods n eeded to address noise pollution and vibration 
abatement and natural risk management were only included in two of the three approaches – DDA 
and EGA, and DDA and APEC, respectively.  
  
 
31 https://www.international.gc.ca/trade -agreements -accords -commerciaux/topics -
domaines/env/plurilat eral.aspx?lang=eng#:~:text=On%20January%2024%2C%202014%2C%20Canada,Envir
onmental%20Goods%20Agreement%20(EGA) .  
32 Eurostat (2009),  "The Environmental Goods and Services Sector ", Luxembourg: Office for Official 
Publications of the European Communities.  
33 "APEC Ministers Responsible for Trade Meeting Joint Statement 2021", Wellington, New Zealand, 
5 June 2021, https://www.apec.org/Meeting -Papers/Sectoral -Ministeria l-Meetings/Trade/2021_MRT .  INF/TE/SSD/W/18  
 
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  Table 2. Categories of goods covered by lists under different initiatives  
DDA EGA APEC  
Air Pollution Control  
 
Renewable energy  
 
 
Waste Management and Water 
Treatment  
• Clean Up or Remediation of Soil 
and Water  
• Management of Solid and 
Hazardous Waste and Recycling 
Systems  
• Waste Management, Recycling and 
Remediation  
• Waste Water Management and 
Potable Water Treatment  
 
Environmental Technologies  
• Gas Flaring Emission Reduction  
• Efficient Consumption of Energy 
Technologies  
• Cleaner or More Resource Efficient 
Technologies and Products  
• Energy Efficie ncy 
• Environmental Monitoring, Analysis 
and Assessment Equipment  
• Heat and Energy Management  
• Natural Risk Management  
• Noise and Vibration Abatement  
 
Carbon capture and storage  
Others  
• Environmentally preferable 
products  
• Natural resource protection  
• Renewable products and energy 
sources  
• Resource and pollution 
management  Air pollution control (APC)  
 
Cleaner and renewable energy 
(CRE)  
 
Wastewater management and 
water treatment (WMWT)  
 
Environmental remediation and 
clean up (ERC)  
 
Solid and hazardous waste 
management (SHWM)  
 
 
 
 
 
Environmental monitoring, 
analysis and assessment (EMAA)  
 
Resource efficiency (RE)  
 
Energy efficiency (EE)  
 
 
 
 
 
Noise and vibration abatement 
(NVA)  
 
 
Environmentally preferable 
products (EPP)  
 Air Pollution Control  
 
Renewable Energy  
 
 
Waste Water Management 
and Potable Water 
Treatment  
 
 
 
Management of Solid and 
Hazardous Waste and 
Recycling Systems  
 
 
 
 
Environmental Monitoring 
Analysis and Assessment 
Equipment  
 
 
 
 
 
 
 
 
Natural risk management  
 
 
 
Environmentally Preferable 
Products  
 
Sources: WTO document JOB/TE/3/Rev.1; Reinsch et al. (2021) ; and APEC Policy Support Unit, Policy Brief 
No. 41 (October 2021).  
2.3.1.3   Approaches based on activities or projects  
2.26.   A third approach aims to identify environmental goods based on environmental activities or 
projects. Under such "project approach", participants would agree on a list of environmental 
activities and commit to reduc ing or eliminat ing tariffs on the associated goods when used for such 
activi ties. 
2.27.   In the context of the CTESS , different variants of such an approach were discussed. Under 
the integrated approach34, Members would first agree on environmental activities of interest  to them 
and then submit a national list of public and private entit ies that normally carry out the agreed 
environmental activities in their territories. All goods imported by the notified entities for purposes 
of carrying out any of the agreed environmental activities would be granted preferential tariff 
treatment, as agr eed by Members.  
2.28.   Since under this approach there is no common list of environmental goods, it would rely on 
other control mechanisms, such as import licences and/or post -importation audits to monitor 
whether or not, following their importation, the products  in question were indeed used for their 
declared environmental purpose. In the course of the discussions on this approach, it was argued 
that, while the approach may be relatively straightforward to implement in the context of only a 
 
34 JOB(07)/77 (Argentina and India, 6 June 2007).  INF/TE/SSD/W/18  
 
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  modest number of autho rized public or private entities and projects, it may be challenging for 
customs authorities to control a significant number of entities or projects.  
2.3.1.4   Role of the Harmonized System Nomenclature  
2.29.   The Harmonized System (HS) nomenclature is an international pro duct nomenclature 
developed and regularly updated by the Harmonized System Committee (HSC) of the World Customs 
Organization (WCO), which is used by customs administrations around the world to identify and 
classify products in their operations. Determining  the HS  classification is usually the first  step in 
determining a product's relevant import duty and other applicable regulations. The HS comprises 
approximately 5,000 commodity groups that are uniformly applied around the world. 
2.30.   The HS  classification is b ased on the objective characteristics and properties of the good in 
question when presented for importation to customs authorities (e.g. material or substance, function 
and form in which it is being imported). Other elements, such as their end -use (i.e. ho w the products 
will be actually used after importation) or the manufacturing methods used in production of the good 
are normally not relevant for classification purposes, unless they have an impact on the objective 
characteristics of the products. These ot her elements may include, for example, goods that are "of 
a kind used" for certain activities or designed for a specific use.35 
2.31.   Generally, tariff negotiators define the list of covered products based on HS  codes, which can 
be expressed in terms of Chapters  (2 digits), headings (4  digits), or subheadings (6  digits), or a 
combination of all three  terms. However, it often happens that negotiators would like to cover only 
some, but not all, of the products falling within a particular HS  subheading (i.e. a subset of products 
with no standard HS  code). National tariff lines (i.e. at the 8 -digit level or higher) cannot be used 
because they differ significantly across countries and may also change over time in a particular 
country. Therefore, tariff negotiators  typically rely on the determination of so -called "ex -outs", which 
are definitions of a subset of products within a particular HS  code which would be covered by the 
agreement. For example, HS  2017 subheading 9405.10 covers "Chandeliers and other electric c eiling 
or wall lighting fittings (excluding those of a kind used for lighting public open spaces or 
thoroughfares)", so an ex -out could be used by negotiators to indicate that only trade in a specific 
type of such devices should be liberalized. For example , if the agreement only covered those devices 
with an LED  light source, this could be expressed as "ex9405.10 Designed for use solely with 
light-emitting diode (LED) light sources", which would signal that only the tariffs on those products 
will be liberal ized and not the others.  
2.32.   The HS is an important tool to engage in tariff negotiations not only because it provides a 
common language to identify products, but also because the results can be directly implemented by 
the relevant customs administrations. Whe n negotiations are based on HS  codes, negotiators simply 
need to choose which ones to include in the product coverage. However, negotiating ex -outs is a 
more complicated process. Not only do the specific ex -out descriptions need to be agreed by all 
partici pants to the negotiations, but their definition also needs to be sufficiently precise to allow 
customs officers to identify the products based on their objective characteristics. While this approach 
has the benefit of allowing for the inclusion of products  that may otherwise have been excluded, it 
is a resource -intensive process that requires customs expertise and extensive information about the 
products in question  (Santana, 2015) . 
2.33.   The EGA is a good example of a negotiation that drew successfully on the ex pertise of customs 
officials. In 2015, negotiators established a Customs Working Group (CWG), which brought together 
customs officers from all the participating Members. The CWG had two main tasks: first, to identify 
or confirm the HS  classification of a n ominated product; and , second, to negotiate sufficiently specific 
product descriptions of relevant environmental goods so that the ex -outs could be implemented by 
customs officers (i.e. based on their objective characteristics and following the same logic as the  HS). 
This technical work was then looped back to tariff negotiators who would then negotiate whether or 
not to include the products in question. In this regard, it has been reported that the CWG played a 
critical role in identifying the classificati on of numerous products and defining the product 
descriptions for the proposed ex -outs. 
 
35 One example is HS  2022 subheading 9405.11: "Chandeliers and other electric ceiling or wall lighting 
fittings, excluding those of a kind used for  lighting public open spaces or t horoughfares: Designed for use 
solely with  light-emitting diode (LED) light sources" (emphasis added).  INF/TE/SSD/W/18  
 
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  2.34.   A final point to note is that the HS is not static. The nomenclature goes through a regular 
procedure of review and amendment that takes between 4-5 years and takes acc ount of changes in 
technology and patterns of trade, as well as proposals by HS  contracting parties and international 
organizations to better monitor trade in specific products. These amendments present an opportunity 
for Members to propose the creation of  specific headings or subheadings that are relevant to the 
implementation of specific agreements. For example, the 2017  version of the nomenclature 
rearranged and regrouped the manner in which certain advanced semiconductors (MCOs) were 
classified. This am endment was introduced in order to take into account the parallel discussions that 
were taking place in the context of the Ministerial Declaration on the Expansion of Trade in 
Information Technology Products (ITA  Expansion).  
2.35.   According to Steenblik (2020), the HS  amendment that entered into force on 1  January  2022 
(HS 2022) has significantly facilitated the monitoring of exports and imports of environmentally 
sensitive products, and the amendment planned for 2027 will be increasingly important for dealing 
with the world's pressing environmental problems. For example, HS  2017 subheading 9405.10 
(Chandeliers and other electric ceiling or wall lighting fittings) was split in to separate 
HS 2022 subheadings to better identify light sources with an LED  light source : subheading 9405.11 
for those " - Designed for use solely with light -emitting diode (LED) light sources" , and 
subheading  9405.19, for " - Other". As a result, while negotiations based on HS  2017 would have 
required the negotiation of an ex -out to identify t hese products, negotiations based on HS  2022 
could now be based on the standard HS subheadings that will be used at some point by all customs 
administrations.  
2.3.1.5   The "multiple use" consideration  
2.36.   One of the most important  consideration s in identifying environmental goods beyond the 
six-digit (subheading) level is that some environmental goods may be used for a range of different 
purposes, some of which may not be environmental in nature. In its 1999  list, the OECD explained 
this problem as f ollows:  
Many environmental products have a multiplicity of possible uses, many of which are 
not environmental. For example, separating harmful waste products from the output 
stream calls for a centrifuge. Yet centrifuges have a host of industrial uses, inv olving 
situations in which portions of a substance need to be separated for ordinary industrial 
reasons. One report estimates that 10% of centrifuge sales are for environmental 
purposes. Similar conditions hold for most environmental products, including pu mps, 
filters, incinerators and chemicals which bind polluting substances. This multiple use 
problem complicates the process of estimating industry size. Inevitably one must either 
exclude certain products with clear environmental uses or run the risk of in cluding some 
sales, production, trade, etc. in products which are of non -environmental use.36 
2.37.   As theirs was largely an academic and illustrative exercise, the OECD listed the products at 
the HS  six-digit (subheading) level, acknowledging that it was too broad because those subheadings 
also included goods that were not environmental goods.  
2.38.   Tariff negotiators have two options in case of possible  multiple use s and where only a small 
portion of an HS subheading meets the objective of the agreement: either lib eralize trade in all the 
relevant subheading and accept that the product may also be used for other  purposes  than the 
intended environmental objective ; or, alternatively, use ex-outs and therefore try to narrow down 
the specific characteristics o f the prod ucts used for environmental purposes with a view to 
eliminating, or at least reducing, the multiple -use issue. 
2.39.   Discussions in the CTESS  revealed a number of technical challenges related to the 
identification and classification under the HS and the multiple  use consideration . Concerns were 
raised particularly by developing countries , which  proposed alternatives. It was suggested that for 
the identification of environmental goods, criteria relating to sustainable development could be 
applied by Members  in line with their own principles and regulations, the multilateral agreements 
they had ratified, and their development priorities. The project -based approach was highlighted as 
being better able to deal with the multiple  use challenge as there were few environm ental goods as 
 
36 OECD (1999), p. 9.  INF/TE/SSD/W/18  
 
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  such and that goods would become  environmental only when they were used for environmental 
activities.  
2.40.   To facilitate the identification of environmental goods, the proposed lists of environmental 
goods included some ex-outs. Among the 409 tariff lines that make up the universe of environmental 
goods in the proposed lists, 55% refer to ex -outs. Some Members have expressed concerns about 
the potentially high levels of administrative complexity and transaction costs related to establishing 
and implementing ex -outs for a large number of products.37 It was acknowledged that additional 
technical work between environment, trade and customs experts is needed to operationalize the 
proposed ex -outs. 
2.41.   In the EGA negotiations, participants decided to try  to identify as much as possible the goods 
used for environmental purposes with a view to eliminating, or at least reducing, the multiple  use 
problem. Approximately two -thirds of the list consisted of ex -outs. This was a resource -intensive 
process that req uired detailed information on both the technical specifications of products and their 
end-use. To enhance transparency and facilitate this process, a large volume of information was 
exchanged by participants via a secure and confidential website.  
2.3.2   Tariff tr eatment  
2.42.   Tariff initiatives can differ significantly in terms of their negotiating objectives and types of 
duty being negotiated. The most common objectives in past sectoral initiatives at the WTO have 
been to harmonize the duty levels across countries (har monization initiatives), or to fully eliminate 
tariffs for all participants (also known as "zero -for-zero" initiatives).38 On the type of duty subject to 
the negotiations, the possibilities include to reduce or eliminate tariffs:  
• through reciprocal prefere nces under a broader regional trade agreement or customs union, 
as well as through non -reciprocal preferences under preferential trade arrangements;  
• by modifying the tariffs applied in practice by Members on a most -favoured -nation basis 
(i.e. the MFN appli ed tariffs); or  
• by modifying the maximum duty level that a Member has agreed to levy on the importation 
of specific goods originating in other WTO  Members (i.e. the bound duties), as provided for 
in their WTO  Schedules of concessions.  
2.43.   The combination of th ese factors is reflected in the multiplicity of approaches followed in past 
environmental goods negotiations.  
2.44.   The APEC initiative on environmental goods is an example for the voluntary and coordinated 
modification of MFN applied tariffs.  In 2012, APEC econ omies agreed to voluntarily reduce MFN 
applied tariff rates to 5% or less on a list of 54 environmental goods at the HS six -digit level by the 
end of 2015. No differentiation was made among APEC economies regarding  the product coverage, 
magnitude of tariff  reductions and implementation period, likely reflecting the voluntary and non -
binding nature of this commitment. As of March 2021, 19 out of 21 APEC economies are fully 
compliant with regard to the APEC -EGL.39 
2.45.   DDA and EGA negotiations reflect efforts to a chieve a reduction or elimination of bound duties 
in Members' Schedules of concessions at the WTO. In multilateral negotiations in the CTESS , each 
proposed approach included options for the precise mode of tariff treatment, including with regard 
to S&D tre atment for developing Members. Three tenets of S&D treatment were proposed: (i) lower 
levels of tariff cuts for developing Members; (ii) on fewer goods; and (iii) over a longer time -period.  
2.46.   Under the list approach, proposals were made to establish differen t lists of environment goods 
to provide Members with flexibilities with regard to tariff treatment of some of them. For instance, 
it was suggested that all Members would be required to eliminate tariffs on all goods on a "core list" 
by a certain date, whil e for a "complementary list", Members would be required to eliminate tariffs 
only on a given share of self -selected goods, with the share being smaller for developing Members.40 
Another proposal suggested the creation of a "development list" , which would comprise products 
 
37 TN/TE/R/18 (Note by the WTO Secretariat, 8  June 2007).  
38 See TN/MA/S/13.  
39 APEC news release: https://www.apec.org/Press/News -Releases/2016/0128_EG   
40 TN/TE/W/38 (United States, 7  July 2003).  INF/TE/SSD/W/18  
 
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  selected by developing and least developed Members from a multilaterally agreed list for 
liberalization ("common list") for exemption or a lower level of reduction commitment.41 
2.47.   Under the request and offer approach, the precise tariff commitments undertaken by Members 
would be the result of voluntary bilateral negotiations on the basis of requests and offers. The agreed 
outcomes of these negotiations would be multilateralized in accordance with the MFN principle. A 
given number of offer rounds would be organized to ensure balance in the basket of concessions, 
taking into account differences in levels of development among Members.  
2.48.   Another proposal included a number of guidelines for S&D treatment that would be applicable 
to any approach under consideration, including substantially lower tariff reduction levels and longer 
implementation periods for developing than for developed Members. On products of export in terest 
to developing Members, developed Members should consider reducing or eliminating tariff s (and 
non-tariff barriers) over a shorter implementation period. In order to reflect the principles of S&D 
treatment, developing Members should be allowed to ada pt the scope of their liberalization 
commitments to their development and trade needs and, thus, be allowed to exclude products of 
development interest from trade liberalization.42 
2.49.   In the  EGA, participants sought to fully eliminate tariffs on environmental  goods, and to bind 
them at duty -free levels in their respective WTO  Schedules of concessions. These new tariff 
elimination commitments would only be applied by the participating Members, making it a 
"plurilateral" agreement. However, the tariff eliminatio n would have been applied on a 
most-favoured -nation basis because the concessions would be incorporated into the participants' 
respective WTO  Schedules, which are multilateral legal instruments. It has been reported that some 
participants proposed to allow  developing country participants to retain tariffs of up to 5% on 5% of 
the products in the list. However, Reinsch, Benson and Puga (2021) note that this was opposed by 
other participants, who preferred to follow the 1996  ITA and 2015  ITA Expansion models,  where no 
exceptions to the product coverage were allowed, and where no specific special and differential 
treatment provisions were provided for developing countries and LDCs. Rather, special sensitivities 
would be taken into account through the staging of  the concessions (see next section).  
2.3.2.1   Implementation of tariff reduction or liberalization (staging)  
2.50.   In term s of implementation, the question  relates to the  determin ation of  how tariff reductions 
or eliminations will take place over time, which has to do bo th with the duration and the magnitude 
of the reductions.43 
2.51.   EGA negotiators sought to follow the same staging methodology that had been adopted in the 
2015 ITA Expansion, and would have included four  baskets: (i) immediate elimination upon entry 
into force  of the agreement, which would apply to the majority of the products (e.g. 75% of the 
products in the list); (ii) a three -year phase -out in four  equal annual instalments; (iii) a five-year 
phase -out in six  equal annual instalments; and (iv)  a seven -year ph ase-out in eight  equal annual 
instalments, which would only be used in exceptional circumstances and reserved for only the most 
sensitive products  (ICTSD, 2016) . A report by the WTO  Secretariat summarizes the ITA  Expansion 
approach as follows:  
Similar to the 1996 ITA, the group decided not to include general provisions on special 
and differential treatment among participants or to allow for exceptions to the final 
product coverage. Three -year staging in four equal annual reductions was to be app lied 
as "standard" staging, with the possibility for extended staging for individual 
participants based on their sensitivities to be considered on a product -by-product basis. 
The participants further agreed that extended staging should not go beyond five  years, 
 
41 TN/TE/W/42 (China, 6  July 2004).  
42 TN/TE/W/76 (Argentina and Brazil, 30 June 2010).  
43 In the WTO context, the usual practice has been for tariff reductions to take place in "equal annual 
instalments", meaning that reductions of an equal magnitude are applied by the concerned Member until the 
duty is reduced to the agreed level or completely p hased out. However, it is also possible to agree to 
implement the new concessions immediately (i.e. without transition period), to have "front -loading" (i.e. the 
initial reductions are of a larger magnitude than the subsequent ones), or to have "back -loading" (i.e. the 
initial reductions are relatively smaller and larger reductions take place during the last stages).  INF/TE/SSD/W/18  
 
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  with six equal annual reductions, though longer staging up to a maximum of seven  years 
could be considered in exceptional circumstances and for highly sensitive products.44 
2.52.   In the CTESS , it was proposed, inter alia , that tariffs on a multilaterally a greed list of 
environmental goods would be eliminated no later than a given deadline year for developed Members 
(and those developing Members declaring themselves in a position to do so), while all developing 
Members would eliminate tariffs X years thereaf ter. LDCs were encouraged to examine where tariff 
reductions in bound and applied rates may be beneficial to achieving their sustainable development 
goals.45 
2.53.   In 2012, APEC leaders agreed to implement reductions in MFN applied tariffs on the 54 goods 
contai ned in the APEC -EGL over a period of three years (by the end of 2015). Most APEC economies 
have been able to implement this voluntary commitment, with a number of them taking more than 
the three years originally envisaged.  
2.3.3   Additional  points of discussion  
2.54.   Beyond the above -mentioned elements, which have been addressed in the context of most 
environmental goods negotiations, two additional considerations came up in the EGA negotiations: 
the need to introduce  a "critical mass" requirement;  and any ways to "futu re proof" the list of 
environmental goods.  
2.55.   Some Members have expressed in the course of the EGA negotiation s the concern that a 
"free-rider" situation could  arise from having plurilateral tariff negotiations that will then be applied 
on an MFN  basis. Because the tariff liberalization would be bound in the WTO Schedules of 
concessions, and the new duty -free concessions would have to be applied immediately and 
unconditionally to all WTO  Members, there could be  cases where  these market access opportunities 
benefit countries that do not participate in the agreement, i.e. without requiring equivalent 
concessions from them. In order to address this concern, both the  1996 ITA and the 
2015 ITA Expansion applied a "critical mass" requirement, whereby the agreement would only be 
implemented once participants accounting for at least 90% of the trade in the relevant products had 
joined the agreement.46 EGA negotiators also  discussed a number of technical aspects surrounding 
the critical mass concept, including : whether to adopt the same minimum 90%  threshold ; which 
data should be used for t he calculation  (i.e. export statistics or both export and import statistics ); 
and whether the critical mass would need to  be a one -off exercise, as in the ITA and ITA Expansion, 
or whether this should be a continued exercise  even after entry into force of the EGA.  
2.56.   A second broad point of discussion  for EGA negotiators was that they were  negotiating 
products undergoing rapid technological innovation, resulting in a risk of the list of products quickly 
becoming obsolete, or that products that were considered to be "environmental" at a given point in 
time would no longer be considered as su ch shortly afterwards. EGA  negotiators referred to this as 
a question of how to "future proof" the list, and of how to make the EGA a "living agreement".47 At 
some point, one  participant proposed to have "annual or biannual suggestions for further tariff 
liberalization for new innovative environmental products, dealing with definitional issues and/or 
situations where there was a good case that a component that had dual -use character was a core 
component for the environmental end -product to implement the 'li ving agreement'."48 It has been 
 
44 WTO Secretariat (2017), "20 Years of the Information Technology Agreement: Boosting trade, 
innovation and digital connectivity", p. 62.  
45 TN/TE/W/65 (Canada, European Communities, New Zealand, Norway, Singapore, Switzerland, and 
United States, 9 May 2006).  
46 See paragraph 4 of the Annex to the Ministerial Declaration on Trade in Information Technology 
Products (1996 ITA, WT/MIN(96)/16), and p aragraph 7 of the Declaration on the Expansion of Trade in 
Information Technology Products (2015 ITA Expansion, WT/L/956).  
47 In a report from 8 September 2015, the European Commission noted that "the intention is for the 
EGA to become a 'living agreement' which would allow the addition of new products in the future".  
https://trade.ec.europa.eu/doclib/press/index.cfm?id=1116   
48 European Commission (2018), "The European Services' Positi on Paper on the Sustainability Impact 
Assessment in Support of Negotiations on the Environmental Goods Agreement EGA ", dated September 2018. 
This document noted that "A future oriented EGA should have the "living agreement" mechanism to allow for 
the incor poration, as appropriate, of additional environmental goods in order to respond to rapid technological 
developments in the environmental sector, pressing environmental challenges, policy and regulatory 
 INF/TE/SSD/W/18  
 
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  reported that, although some participants considered that this would have been too prescriptive, 
there was a common understanding that the product coverage would be periodically reviewed.  
2.57.   In the CTESS  negotiations, it was su ggested that negotiators should seek to ensure that any 
agreed set of environmental goods does not remain static over time to allow Members to have access 
to the best available technologies , the so -called "living list " approach . It was suggested that a rev iew 
mechanism be created to keep up to date any set of items selected for liberalization.49 
2.58.   In June 2021, APEC Trade Ministers affirmed their readiness to build on the APEC -EGL with 
the acknowledgement that since 2012 new environmentally friendly goods, te chnologies and 
innovations had emerged that were not covered by the APEC -EGL.50 A 2021 study indicated that 
APEC members could consider an approach to expanding their environmental goods list that is 
focused on new and emerging renewable energy products an d technologies that contribute to 
emissions reduction and mitigation. Presenting an illustrative list of 21 environmental goods for 
renewable energy generation, transport, storage, trade and use, the study also suggested that such 
update would need to acco unt for whole of value chains and be capable of being expanded, updated 
and built on over time  (APEC, 2021a) . 
2.3.4   Non-tariff  barriers  
2.59.   As with import tariffs , market access conditions may also be nullified or impaired by non -tariff 
barriers (NTBs), which by definition include all other measures beyond the application of ordinary 
customs duties. The term is broad in nature and generally understood to encompass measures such 
as local content requirements; non -automatic import licensing procedures; standards, te chnical 
regulations and conformity assessment procedures; labelling requirements; and subsidies, among 
others.  
2.60.   In the DDA negotiations, Members stressed the importance of NTBs in the mandate contained 
in Paragraph  31(iii) of the Doha Ministerial Declaratio n. It has been noted that, while the elimination 
of tariffs is an important means of making environmental goods more affordable and widely 
available, NTBs can be equally or even more significant impediments to trade in such goods.51 
Overall , however, only limited work was undertaken on NTBs in the CTESS . 
2.61.   Members have identified broad categories of measures that may act as possible NTBs to trade 
in environmental goods. For example, intellectual property rights and standards, conformity 
assessment procedures and labelling are possible NTBs identified that could inhibit the dissemination 
of environmental technologies.52 Similarly, Members noted that patents on environmentally sound 
technologies could represent a non -tariff barrier. Members also noted that when environmental 
goods are subject to NTBs, approval, mutual recognition procedures and financial and technological 
support measures could facilitate the entry of environmental goods into the markets of developed 
Members.53 
2.62.   Members have also included suggesti ons on NTBs in their submissions with regard to 
negotiating approaches. For instance, it was suggested that Members could identify product -specific 
NTBs for discussion once product coverage of a common core list had been determined.54 Another 
suggestion wa s that domestic requirements could be relaxed for the effective conduct of agreed 
environmental activities under an integrated approach, and that a structured work programme could 
be established to address other NTBs faced by developing Members.55 Members also underlined the 
 
developments, market developments, shifts in trade, ch anges to the HS nomenclature or experience gained in 
applying the EGA." See https://trade.ec.europa.eu/doclib/docs/2019/march/tradoc_157727.pdf .  
49 JOB(07)/54 (Canada, Euro pean Communities, Japan, Republic of Korea, New Zealand, Norway, 
Chinese Taipei, Switzerland, United States, 27  April 2007). See also the proposal by New Zealand to make the 
lists of environmental goods "living lists", TN/TE/W/46 (New Zealand, 10  February  2005).  
50 "APEC Ministers Responsible for Trade Meeting Joint Statement 2021, Wellington, New Zealand, 
5 June 2021, https://www.apec.org/Meeting -Papers/Sectoral -Ministerial -Meetings/Trade/2021_MRT .  
51 TN/MA/W/70 -TN/TE/W/65 (Canada, European Communities, New Zealand, Norway, Singapore, 
Switzerland and United States, 9  May 2006).  
52 JOB(09)/169/Add.2 (Kingdom of Saudi Arabia, 21  July 2010).  
53 TN/TE/W/69 (Cuba, 30  June 2006).  
54 JOB/TE/15 (Australia, Colombia, Hong Kong (China), Norway and Singapore, 7  March  2011).  
55 JOB(07)/77 (Argentina and India, 6  June 2007).  INF/TE/SSD/W/18  
 
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  need to address and reduce specific NTBs on particular goods, including any time -consuming and 
burdensome customs formalities, to facilitate trade in environmental goods.56 
2.63.   In the EGA, participants discussed the possibility of establish ing a work programme that would 
have allowed participants to discuss the NTBs affecting trade on the environmental goods covered 
by the agreement.  
2.64.   Regarding approaches in RTAs, under Article 2.5 (Non -Tariff Measures) of the ANZTEC, Parties 
will endeavour t o address any NTB identified by either Party that impede s trade in environmental 
goods or services. Article 17.3 (Environmental Goods and Services) similarly endeavours to address 
any NTB identified that could impede the trade in environmental goods and se rvices. In cases where 
NTBs are identified, the Joint Commission established under the Agreement in Chapter 22 
(Institutional Provisions) will seek to resolve differences or disputes.  
2.65.   A recent policy brief by the APEC Secretariat categorized 223 NTBs that affect the APEC -EGL 
into eight types of NTBs:  (i) contingency trade -protective measures; (ii) non-automatic 
import -licensing procedures, prohibitions other than authori zations for SPS or TBT reasons; 
(iii) internal taxes and charges levied on imports; (iv) local content measures; (v) subsidies 
(excluding export subsidies); (vi) government procurement measures; (vii) export -related measures 
(subsidies, licen ces or quotas); and (viii) other measures. The biggest share of these NTBs was 
export -related measures , which were followed by subsidies and local content measures  (APEC, 
2021b) . 
2.3.5   Development  issues  
2.66.   The participation of developing Members in initiatives to liberalize trade in environmental 
goods has been limited so far. In the CTESS , a number of developing countries participated actively, 
including through formal submissions. Certain developing Members, including Argentina and India , 
suggested approaches towards advancing the discussions through the integrated approach, while 
Brazil ha d instead suggested the request and offer approach. More broadly, submissions were made  
by Argentina; Brazil; Bolivia; Chile; Colombia; Cuba; India; Korea; Mexico; Hong  Kong, China; 
Singapore; Peru; the Philippines; Qatar; Saudi Arabia; Chinese Taipei; and  Venezuela.  
2.67.   At the launch of the EGA negotiations in 2014, six developing Members (China; Costa Rica; 
Hong Kong, China; Republic of Korea; Singapore ; and Chinese Taipei) joined initially the 
negotiations, while Turkey joined later. Meanwhile, 14 out of 21 APEC Member economies represent 
developing economies.  
2.68.   According to De Melo and Solleder (2020 a), the low participation of developing Members 
reflects concerns about the  negotiation of lists "would include mainly industrial products and exclude 
environmenta lly preferable products (EPPs) in which developing countries have a comparative 
advantage but which would meet resistance at the WTO. Fears also include little new access to 
markets where tariffs are already very low, an import surge in their own markets, and the fear that 
their domestic markets are too small to develop viable industries in EGs, if only because to develop 
EGs one needs environmental regulations in the first place."  
2.69.   As part of the negotiations in the CTESS , a number of  developing Members und erlined the 
importance of transfer of technology and support for the development of environmental 
technologies. In their view, an important outcome of the negotiations should be to strengthen  the 
environmental goods sector in developing Members , including through technology transfer and 
capacity building, considering that this sector is "only now emerging in most developing countries ".57 
Some Members had proposed a technology transfer mechanism in the WTO, "technology pools" 
accessible to developing Members  and "new and additional financing" for "joint technology excellence 
centres" in developing Members.58 In addition, a financial mechanism to ensure access to and the 
development of these technologies, investments in environmental projects, and capacity 
 
56 TN/TE/W/65 (Canada, European Union, New Zealand, Norway, Singapore, Switzerland and 
United  States, 9  May 2006).  
57 See documents  JOB(06)/194 (Argentina, Bolivarian Republic of Venezuela, Brazil, Egypt, India, 
Indonesia, Namibia, Philippines, South Africa a nd Tunisia, 19  June 2006) , and JOB(06)/149 (Colombia,  
19 May 2006).  
58 JOB/TE/17 (Plurilateral State of Bolivia and Bolivarian Republic of Venezuela, 24  March  2011).  INF/TE/SSD/W/18  
 
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  development for the production of environmental goods in developing Members were also suggested 
by Members.59 
2.4  Environmental services  
2.70.   This section provides an overview of some of the key issues raised in previous work on 
environmental services in the WTO.60 It is largely based on discussions held in the CTS -SS since 
MC-1161, as well as on earlier discussions during the negotiation of specific commitments pursuant 
to the GATS' built -in mandate, particularly during the period between 2000 and 2008.62 
2.71.   The section is divided into three parts. The first part provides some background on trade in 
environmental services , including as regards to the scope of the sector and restrictions to trade 
under different  modes of supply . The  second  part addresses the identification of environmental 
services for the purpose of trade negotiations, which has been an area of focus in the WTO's services 
market access negotiations . Members' proposals on  the classification of environmental services are 
briefly discussed in th is context. The third part describes Members' specific commitments on 
environmental services under the GATS and discusses services offers made during multilateral 
negotiations. It also highlights the extent to which GATS+ commitments have been undertaken b y 
Members in RTAs.  
2.4.1   Background  
2.4.1.1   What is the scope of the environmental services sector?  
2.72.   The scope of the environmental services sector is not clearly defined at the multilateral level. 
When the sector was first discussed in the WTO, environmental services we re commonly understood 
to include infrastructure services supplied by municipal utilities, such as waste  water treatment, 
waste management, sanitation, as well as a few other services including as they r elate to end -of-pipe 
pollution.63 
2.4.1.2   How are environment al services traded?  
2.73.   Services trade is defined under the GATS as encompassing four modes of supply, namely 
cross-border supply (mode 1), consumption abroad (mode 2), commercial presence (mode 3) and 
the movement of natural persons (mode 4).64 All four modes  of supply are relevant to environmental 
services trade, though their importance varies depending on the services concerned.  
 
59 TN/TE/W/79 (China and India, 15  April 2011).  
60 Work on environmental services at the WTO has been conducted mainly in the Special Session of the 
Council for Trade in Services (CTS -SS). Issues related to the classification of environmental services have also 
been discussed in the Committee on Specific Commitments (CSC). While environmental serv ices are mentioned 
in Paragraph 31(iii) of the Doha Ministerial Declaration, work on services has been limited in the CTESS  where 
Members acknowledged that the provision of environmental services is closely linked to trade in related goods. 
Other initiativ es outside of the WTO aimed at facilitating trade in environmental services are also mentioned in 
this section when relevant.  
61 These discussions have focused on three communications by groups of Members on environmental 
services, namely Communication fro m Australia, Canada, Republic of Korea, Mexico, New Zealand and 
Switzerland (JOB/SERV/293/Rev.2); Communication from Australia, Canada, European Union, Republic of 
Korea, Mexico, New  Zealand, Switzerland and United Kingdom (JOB/SERV/299/Rev.3); and Communi cation 
from Australia, Canada, Republic of Korea, Mexico, New  Zealand, Switzerland and United Kingdom 
(JOB/SERV/308).  
62 The built -in mandate of negotiation is contained in GATS Article XIX, which calls for "successive 
rounds of negotiations … with a view to achieving a progressively higher level of liberalization […]". The 
negotiations cover all services within the scope of the GATS, including environmental services.  
63 Various definitions of environmental services were used in other contexts. The OECD/Euro stat 
definition, for instance, covers activities falling under three broad categories, namely Pollution Management 
(including air pollution control, wastewater management, solid waste management, remediation and clean  up 
of soil and water, noise and vibrat ion abatement, and monitoring, analysis and assessment); Cleaner 
technologies and products; and Resource management.  See also WTO (2019), "World Trade Report – The 
Future of Services Trade", p. 121 . 
64 Trade in services is defined in Article I:2 of the GATS  as "the supply of a service: (a) from the 
territory of one Member into the territory of any other Member; (b) in the territory of one Member to the 
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  2.74.   Commercial presence (mode 3) is the predominant mode of supply for the environmental 
services sector. As many environmental service s are infrastructure -dependent and require a 
continuous and long -term local presence in the territory, it is important for foreign firms to be able 
to establish and operate affiliates abroad , or to invest in local companies . Commercial presence is a 
vehicle to ensure additional investment and transmission of technology and know -how. The  supply 
of environmental services through the movement  of natural persons (mode 4 ) is also particularly 
relevant for the sector. It enables firm s to send abroad managers or technicians with specialized 
skills when operating through affiliates and allows professionals, such  as environmental consultants, 
to physically supply their services abroad.  
2.75.   Cross -border supply (mode 1) had limited commercial significance at the time the GATS 
entered into force  but the advancement of technology has opened new opportunities for trade under 
this mode. This is the case, for instance, with technology that make s it possible to operat e 
environmental facilities or equipment remotely. Also,  more generally, it is now easier to provide 
information and advice over the Internet and other communication networks, thereby allowing for 
various types of environmental services to be provided in this manner. Consumption abroad 
(mode 2) involves the supply of a service to the consumer or its property in the territory of the 
supplier. This mode of supply would cover activities such as the dismantling of ships, cars or 
computers for the purpose of recovering materials that could be re used or recycled.  
2.4.1.3   Examples  of trade restricting measures in the environmental services sector  
2.76.   Restrictions affecting services trade are mostly regulatory in nature. Such measures may 
impede the ability of a foreign service provider to supply its services i n a particular market 
(limitations on market access), or they may affect the conditions of competition of a foreign supplier 
after it has entered the foreign market, e.g. by extending more favourable conditions to domestic 
suppliers (limitations on nationa l treatment).  
2.77.   Several impediments to trade in environmental services affect the supply of environmental 
services through a commercial presence. These may include, for instance, limitations on the types 
of legal entity, such as incorporation requirements; r estrictions on the number or location of 
subsidiaries; discrimination against foreign companies (e.g. high registration fees and discriminatory 
taxes, equity limitations); and restrictions on the ownership of specific assets, such as landfills and 
sewage s ystems.  Other restrictions can affect the movement of key personnel, such as managers, 
professionals and experts .65 
2.78.   Other problems encountered by exporters of environmental services include a general lack of 
regulatory transparency ; weak or inconsistent en forcement of environmental regulation s; 
unnecessary delays in licensing and certification procedures; difficulties in transferring or acquiring 
the necessary equipment (e.g. because of high import tariffs levied, even when the equipment is 
imported for a s hort period); or an obligation to use local inputs. Measures affecting trade in related 
services (e.g. architectural services or engineering), or environmental goods trade can also affect 
the provision of environmental services.66 
2.4.2   Identification of environ mental services for trade negotiation purposes  
2.79.   The two key instruments used by Members for the purpose of scheduling their GATS 
commitments on environmental services are the Services Sectoral Classification List (W/120 list) 
and the provisional version of the UN Central Product Classification (CPC prov.).  
2.80.   In the W/120 list, the environmental services sector is broken down into four sub -sectors, 
namely "6.A – Sewage services" (CPC 9401); "6.B – Refuse disposal services" (CPC 9402); "6. C – 
Sanitation and si milar services" (CPC 9403); and "6.D – Other". The "Other" category does not refer 
to the CPC but several Members have undertaken specific commitments under 6.D on the remaining 
sub-sectors in Division 94 of CPC prov., namely "Cleaning of exhaust gases" (C PC 9404); "Noise 
 
service consumer of any other Member; (c) by a service supplier of one Member, through commercial presence 
in the territory of any other Member; (d) by a service supplier of one Member, through presence of natural 
persons of a Member in the territory of any other Member."  
65 See Council for Trade in Services, Note by the Secretariat, "Background note on Environm ental 
Services" (S/C/W/320).  
66 See e.g. Nordås and Steenblik (2021); Sauvage and Timiliotis (2017); APEC (2016).  INF/TE/SSD/W/18  
 
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  abatement services" (CPC9405); "Nature and landscape protection services" (CPC 9406); and "Other 
environmental protection services not elsewhere classified" (CPC 9409).67 
2.81.   In past discussions, some Members have expressed the view that the classification in W/120 
and CPC prov. is based on a narrow definition of environmental services  and does not reflect the 
evolving structure of the environmental industry. It was argued that by focusing on pollution control 
and w aste management, the classification fail s to account for a range of environmental services, 
including activities relating to the prevention and remediation of pollution, cleaner technologies and 
resource management.68 
2.82.   In the early stages of the negotiations under GATS Article XIX, the European Union and 
Switzerland tabled proposals on the classification of environmental services.69 These proposals 
suggested to restructure the environmental services category around seven sub -sectors based on 
the environmental media (e.g.  air, water, soil, waste, noise, etc.). In their view such categorization 
would better reflect how environmental services providers tended to specialize. Several questions 
were raised by Members regarding the proposals by the Europe an Union and Switzerland, 
in particular on the concordance between the proposed new headings and the relevant definitions 
under the CPC prov .70 Furthermore, f or some Members that had already scheduled commitments 
based on W/120 and CPC prov., it was unclea r whether modifying the classification would amount 
to a mere technical change, or to a more substantive change that could possibly alter the scope of 
the commitments.  
2.83.   In recent submissions and discussions on market access in the CTS -SS, some Members have 
argued that the scope of the environmental services sector should be expanded to include "related" 
services, i.e. services classified under other sectors of the CPC , which either support environmental 
activities or facilitate the supply of "core" environme ntal services.71 It was noted that, in  addition to 
"core" environmental services, there are many other service sectors where international trade 
liberalization and improved GATS commitments could contribute to advancing global environmental 
goals.72 Exampl es of such services included: advisory and consultative engineering services ( e.g. for 
environmental impact assessments ); architectural design services ( e.g. on the choice of energy 
efficient materials in building projects); construction services (e.g. construction of water and sewer 
mains ); and distribution services (e.g. wholesale trade services of waste and scrap and materials 
for recycling ).73 
2.84.   The inclusion of "related" services as part of the scope of environmental services for trade 
liberalization pur poses may raise certain issues, particularly regarding the treatment of 
"multiple  use" services, i.e. services that are not exclusively used for environmental purposes. Some 
Members have expressed concerns that expanding the scope of environmental services to include 
related services may result in the liberalization of sectors that are not beneficial for the 
environment.74 
2.85.   Various approaches have been considered to address the issue of "multiple use" with regard 
to environment -related services.75 One approach consists in establishing an "inventory" of activities 
 
67 It is noted that the Services Sectoral Classification List and its related CPC Prov. categories are not 
mandatory. While  most Members have listed their commitments based on the structure and headings of the 
W/120 classification list, referencing the corre sponding CPC definitions, a few Members have used W/120 but 
have not included CPC definitions; in some cases, alternative definitions have been provided.  
68 See e.g. Committee on Specific Commitments, Informal Note by the Secretariat, "Environmental 
Servic es: Overview of Classification Issues" (JOB/SERV/84, 31  August 2011).  
69 See Proposals by the European Communities (S/CSS/W/38) and Switzerland (S/CSS/W/76).  
70 See Informal Note by the Secretariat, "Environmental services: Overview of Classification Issue s" 
(31 August 2011) in JOB/SERV/84, p. 3. Several Members used the proposed new headings and subheadings 
in their Services offers and revised offers on environmental services.  
71 See in particular the communication by Australia, Canada, European Union, Repu blic of Korea, 
Mexico, New  Zealand, Switzerland and United Kingdom (JOB/SERV/299/Rev.3, 29 June 2021).  
72 See JOB/SERV/308.  
73 See also Nordås and Steenblick (2021) for indicative lists of services identified on the basis of an 
environmental end -use as wel l as "environmentally relevant services" classified under different divisions of 
CPC 2.1. 
74 See e.g. Council for Trade in Services in Special Session, Summary by the Chairperson – Informal 
Meeting of 21 October 2020 in JOB/SERV/303.  
75 See for instance Prop osals by the United States (S/CSS/W/25); European Union (S/CSS/W/38); 
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  that contribute to the provision of environmental services, or that have clear environmental 
end-uses. Such environment -related services could be listed as part of a "cluster" o r "check -list" 
that is used as an aide -mémoire during negotiations.76 Any commitment undertaken on services 
included in the cluster could be scheduled in the relevant (non -environmental) sectors.  
2.86.   It is noted that services related to climate change are like ly to include a range of services 
reaching beyond the "core" environmental services identified in Division 94 of the CPC. Services 
required for the provision of renewable energy, energy efficiency or low emissions technologies, for 
instance, would likely f it under other services sectors.77 These may include services such as project 
development advice, construction, design, engineering and consultancy, R&D, financing, operational 
management, training and education, analytical services, testing and analysis, installation, repair 
and maintenance services, computer -related services; and telecommunication services.78 
2.87.   In a joint proposal tabled under Paragraph  31(iii) of the Doha Declaration, the  United  States 
and European Union argued that services that enabled M embers to fulfil climate -change -related 
objectives included not only environmental services (such as air pollution control and climate control 
services) but also technical testing and analysis services (e.g. air composition and purity testing 
services); en ergy-related services (e.g.  engineering and maintenance services to optimize the 
environmental performance of energy facilities); and services for the design and construction of 
energy -efficient buildings and facilities.79 
2.4.3   Environmental services in GATS sc hedules of commitments and offers during the 
multilateral services trade negotiations  
2.88.   Specific c ommitments under the GATS are the undertakings that individual Members enter 
into regarding market access, national treatment, as well as additional commitments .80 These 
commitments are listed in Members' Schedules, which form an integral part of the GATS.  
2.89.   The number of Members with GATS commitments in the environmental services sector 
(sector  6) is relatively low compared to other sectors of the W/120 list.81 59 schedules (counting 
EU-25 as 1) include specific commitments in at least one of the seven environmental services 
sub-sectors listed in the CPC prov.82 The low level of commitments in the environmental services 
sector may be explained in part by the fact that, at the time of the Uruguay Round, awareness of 
the need to protect the environment was not as widespread as it is today. The participation of the 
private sector in the provision of these services was also more limited.  
2.90.   The chart below shows the average level of treatment  bound by mode of supply  for the 
environmental services sub -sectors committed in schedules . About 38% of Members' commitments 
under mode 1 (cross -border trade) are fully bound (i.e. no limitations); 32% a re partially bound; 
and 30%  are unbound. There is a high proportion of full  commitments under mode 2 (71%  on 
average). With respect to mode 3 (commercial presence), the proportion of full commitments is 57% 
 
Canada (S/CSS/W/51); Switzerland (S/CSS/W/76); and Australia (S/CSS/W/112). See also Communication 
from Australia, European Communities, Japan, New Zealand, Chinese Taipei and United Sta tes (TN/S/W/28), 
highlighting the potential overlaps of environmental services with services classified in other sectors under the 
CPC, such as R&D, technical analysis services, engineering etc . The proponents argue that it should not be 
necessary to creat e a specific sub -category in a revised classification of environmental services for these 
services; any commitments should cover the environment -related activity in the relevant service sectors, in 
addition to "core" environmental services, consistently ac ross sectors.  
76 A similar approach was proposed for energy -related services.  
77 See Committee on Specific Commitments, "Services related to climate change", Informal Note by the 
Secretariat (JOB/SERV/100, 11 June 2012).  
78 See JOB/SERV/100.  
79 Proposal for a  Result under Paragraph 31(iii) of the Doha Ministerial Declaration, Non -paper by the 
European Union and the United States (JOB(07)/193/Rev.1, 6 December 2007).  
80 The relevant disciplines on market access and national treatment are set out in Articles XVI  and XVII 
of the GATS. Members may also undertake "additional commitments" with respect to measures affecting trade 
in services that are not subject to scheduling under GATS Articles XVI and XVII, including as regards 
qualifications, standards or licen sing matters (GATS, Article XVIII).  
81 "Environmental Services", Note by the Secretariat (S/C/W/320, August 2010).  
82 The level of commitments on environmental services is notably higher in the case of recently acceded 
Members.  INF/TE/SSD/W/18  
 
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  on average. Further, no Member has left mode 3 to tally unbound. Commitments under mode 4 
(movement of natural persons) are primarily partial commitments.  
Figure 1: Level of treatment bound in specific commitments on environmental services, 
by mode of supply  
 
 
2.91.   It may be noted that, in their schedule, several Members have inscribed annotations or 
conditions in sectoral headnotes or at the sub -sectoral level, for instance to limit the type of services 
covered under the various committed sub -sectors. For  instance, several Me mbers have limited their 
commitments to consulting and/or advisory services in relation to environmental services, either 
across the entire range of committed sectors or with respect to some sub -sectors only.83 In addition, 
several types of limitations lis ted in the horizontal section of Members' Schedules (which apply to all 
sectors listed) may be relevant to the environmental services sector. These include for instance 
limitations on real estate ownership or lease, foreign equity limitations, residency or  nationality 
requirements for directors, minimum capital requirements, technology transfer requirements or the 
obligation to train local employees.  
2.92.   In the context of the multilateral services negotiations initiated in 2000 , 25 Members had 
offered  new or im proved commitments in the sector.84 At the "Signalling Conference" held in 2008 
at Ministerial level, a number of Members shared further indications on areas where they would be 
willing to undertake new and improved commitments, subject  to a successful conclusion of the 
overall negotiations.85 Several participants also expressed their willingness to reduce or eliminate 
trade restrictive measures in this area. While these aspirations did not materialize because of the 
 
83 The exclusion is indicated eith er in a sectoral headnote or at the level of the sub -sectors concerned.  
84 For sewage services (6.A), five Members offered improved to their existing commitments in this 
sector, while eight Members that had no commitments in the subsector, offered new comm itments. For refuse 
disposal services (6.B), seven offered to improve existing commitments and 9 offered new commitments. With 
respect to sanitation and similar services (6.C), four Members proposed improvements and 10 offered new 
commitments. Offers in ot her environmental services (6.D) were more numerous, with 10 Members proposing 
improvements to existing bindings, and 10 others offering new commitments.  
85 See Chairman's report to the Trade Negotiations Committee (JOB(08)/93, 30  July 2008).  
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  overall slowdown in the negotiations, many Members have continued to undertake GATS+ 
commitments on environmental services in their RTAs.  
2.4.4   Environmental services in regional trade agreements  
2.93.   While not all WTO Members have taken part in services RTAs, their number has increased 
significantly over recent years and outcomes on environmental services in such agreements may 
carry some lessons for possible future achievements in the WTO. Figure 2 provides an overview of 
Members' GATS+ commitments in RTAs, drawing from a survey of 142 ag reements notified under 
GATS Article V.  
2.94.   The figure highlights that, overall, many Members have undertaken RTA commitments on 
environmental services that go not only beyond existing GATS commitments, but also beyond offers 
made during the multilateral servi ces negotiations. These new or better commitments in RTAs are 
significant for each of the four environmental services sub -sectors.  
2.95.   For example, as regards refuse disposal services (CPC  9402), 23 of the 59 Members (counting 
EU-25 as 1) that had GATS commitm ents or offers in the sector have undertaken improved 
commitments in RTAs by binding a better level of treatment for market access or national treatment, 
under any mode of supply. In addition, 30 Members that had no GATS commitments nor made offers 
in refu se disposal services have undertaken commitments in RTAs.  
Figure 2: GATS+ Commitments on Environmental Services in Regional Trade Agreements 
(RTAs)  
 
Note:  On the basis of 142 of the 193 regional trade agreements notified under GAT S Article V as of 1 March 
2022. Counting EU -25 as one. "GATS/GATS offer – unimproved in RTA" means the number of Members that have 
GATS commitments or that have made an offer in the WTO services negotiations in the relevant subsector, and 
that have not tak en better commitments in RTAs. "RTA – Improved" means the number of Members that have 
undertaken a commitment in RTAs that improve a GATS commitment or offer. "RTA – New" means the number 
of Members that have undertaken a commitment in RTAs, where no commi tment or offer had been made under 
the GATS. 6.A = Sewage services (CPC 9401); 6.B = Refuse disposal services (CPC  9402); 6.C = Sanitation and 
similar  services (CPC 9403); and 6.D = Other.  
3  RESEARCH ON POTENTIAL BENEFITS AND CHALLENGES OF TRADE IN EGS  
3.1.  Research on trade in environmental goods and services has covered a number of different 
dimensions which , inter alia , include : (1) trade effects ; (2) diffusion of environmental technology ; 
INF/TE/SSD/W/18  
 
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  and (3) environmental effects. In the following, a brief , non -exhau stive overview of some of the 
main insights of the economic literature is provided.  
3.1  Trade effects  
3.2.  Trade in environmental goods and services can bring benefits to both importers and exporters. 
Importing countries can gain greater access to the most efficien t, diverse and least expensive goods , 
services and technologies  on the global market, while exporters can benefit from new market 
opportunities and spur development of globally competitive industries dedicated to environmental 
improvements (Kennet t and Ste enblick, 2005).  
3.3.  Applied tariffs tend to be relatively low for environmental goods . According to Garsous (2019), 
average tariffs applied on around 250  environmental ly related goods in OECD countries stood  at only 
0.8% in 2016, while  tariffs  applied by  non-OECD  countries averaged 4.1%. Figure 3 shows that 
average applied tariffs  on clean ener gy and energy efficiency  goods tend to be lower compared to  
other goods , and are lower for high and upper -middle  income countries . However, high and 
upper -middle income countries apply more non -tariff measures on environmental goods than low 
and lower -middle income countries .  
Figure 3. Tariffs and non -tariff measures on selected e nvironmental goods by income 
group, 2019  
 
Source: World Bank -WTO (2022, Figure 8):  
https://www.wto.org/english/tratop_e/devel_e/joint_policy_note_jan22.pdf  
Note: Th e illustrative  list of environmental g oods, compiled by the WTO Secretariat, covers  some 177 goods 
(HS six-digit level) that can help decarbonize the economy , including clean and renewable energy and energy 
efficiency goods. Other goods correspond  to any other goods.  
3.4.  Tariff reductions will foster trade in environmental goods , but trade impacts will differ across 
economies , also depending  on prevailing  tariff level s and goods covered. Tariff reductions are 
expected to have modest impacts on trade for high income economi es, while increases in imports 
are estimated to be larger for lower income countries ( Tamini et Sorgho, 2018; De Melo and Solleder, 
2020a). For developing countries, environmentally preferable products (EPPs) may be of particular 
export interest (De Melo and Solleder, 2020 a), while environmental goods related to sanitation, 
waste management, water supply and availability, food production and c ooking, and renewable 
energy are particularly relevant regarding developmental and environmental aspects (Knudson 
et al., 2015).  
3.5.  In the context of a possible  EGA, LDC exports are expected to  see only a limited impact as they 
already benefit from non -recipr ocal duty -free market access in several economies  and have limited 
export potential in technology -intensive environmental goods (Baltzer and Jensen, 2015). 
Transitional challenges for developing countries , inter alia , can include increased competition for 
their domestic companies, loss of tariff revenue and the need to build regulatory capacity, including 
with regard to customs ( Monkelbaan et al., 2016) . 
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  3.6.  As tariffs on EGS tend to be low  relative to NT Ms, particularly in advanced economies , the 
importance of addressing NTMs for fostering environmental goods and services  has been highlighted 
(Tamini and Sorgho, 2018 ; De Melo and Solleder, 2020 b). Empirical findings regarding 
environmental goods point to the positive trade effects of lowering NTBs (He et al., 2015) as well as 
regulatory harmonization of NTBs (De Melo and Solleder, 2020a).  Addressing NTBs is expected to 
vastly increase the potential impact of an EGA, and be particularly beneficial for SMEs ( Monkelbaan 
et al., 2016) . As LDCs tend to face difficulties with standard compliance, it would be in their interest 
to join  discussions to regulate standards and sustainability criteria (Baltzer and Jensen, 2015). To 
facilitate services trade, regulatory collaboration and recognition of standar ds and qualifications are 
helpful in addressing regulatory differences, which are often linked to the stringency of 
environmental policies (Nord ås and Steenblik, 2021).  
3.2  Diffusion of environmental technology  
3.7.  The development and diffusion of environmental te chnologies are key for addressing 
environmental challenges, including for climate change adaptation and mitigation. Trade can transfer 
technology through different channels, including through trade in intermediate inputs or capital 
equipment, or by stimula ting innovation in the importing country.  
3.8.  International trade in capital goods, intermediate inputs and services plays an important role 
in providing access to environmental technology. For example, only a small number of companies 
located in a few countri es have specific technological expertise in wind -turbine manufacturing. Trade 
in wind turbines therefore provides importing countries access to advanced environmental 
technology that allows them to progress in the transition to clean energy (Garsous and Wo rack, 
2021).  
3.9.  By fostering competition and allowing firms to exploit economies of scale, international trade 
also contributes to reduc ing the price and making environmental technologies more affordable. For 
instance, in the case of solar photovoltaic techno logy, open and transparent trade regimes have 
enabled the emergence of a globally integrated solar global supply chain, leading to a decline in the 
cost of the electricity generated by solar photovoltaic plants by 77% between 2010 and 2018 
(WTO -IRENA, 2021 ). 
3.10.   Trade in services is often complementary to environmental goods trade. Environmental 
services , as well as other ancillary services , are in many cases essential for the effective use of 
environmental goods as well as for realizing the gains from trade in environmental goods (Steenblik 
and Geloso Grosso, 2011 ; Brenton and Chemutai , 2021). For  example, for the development of a 
solar phot ovoltaic plant of 55 MW, 56% of the person -days needed are associated with services 
related to energy installations, operations and maintenance and grid connection, while only 22% are 
associated with manufacturing (WTO -IRENA, 2021). The implication of comp lementarities in the use 
of environmental goods and services in areas such as water and wastewater treatment, solid -waste 
management services, air pollution and sound -level monitoring is that the potential benefits of 
simultaneously liberali zing trade in e nvironmental services and in environmental goods are likely to 
be much greater than liberali zing trade in only one or the other (Steenblik et al., 2005). 
3.3  Environmental effects  
3.11.   Trade in EGS and the related diffusion of environmental technologies can play an  important 
role in helping countries achieve environmental objectives, including with regard to addressing 
pollution and climate change. By lowering prices, fostering innovation and transferring technology, 
trade promotes the production and  use of EGS comp ared to other, less environmentally friendly  
goods (composition effect) and fosters more environmentally sustainable production methods  
(technique effect) . At the same time, increased trade in EGS also fosters economic activity which 
can lead to more emiss ions or environmental degradation  (scale effect)  (Grossman and Krueger , 
1993; Copeland and  Taylor, 2005 ).  
3.12.   The interplay between these  three effects implies  that overall environmental benefits  from 
trade in EGS are not  automatic  and depend on a number of factors. The limited number of studies 
available indicate that environmental effects , inter alia , depend on a country 's net trade status  with 
regard to environmental goods , the type of environmental goods  in terms of their environmental 
purpose , the poll utant considered , and the presence of complementary  environmental polic ies such INF/TE/SSD/W/18  
 
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  as end -use control or carbon taxes (Zugravu ‑Soilita , 2018 and 2019 ; Wan et al. 2018 ; Hu et al., 
2020).  
3.13.   In order to allow countries, in particular developing countries , to reap the environmental 
benefits from (liberalization of) trade in environmental goods, a number of studies have highlighted 
the need for technical assistance , technology transfer  and compl ementary policies such as the 
implementation  of Multilateral Environmental Agreements, regulatory harmonization between 
trading partners, investment, government procurement, licensing of intellectual property rights, and 
elimination of non -tariff barriers (Vikhlyaev , 2004; Nguyen and Kalirajan , 2016; De Melo and 
Solleder , 2020; Tamini and Sorgho , 2018; Chen and Hu, 2020; Zugravu -Soilita, 2018 and 2019).  
_______________  
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  REFERENCES  
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