RESTRICTED  
  
JOB/SERV/293  
 
9 July 2019  
(19-4556) Page: 1/7 
Council for Trade in Services  
Special Session  Original: English   
 
COMMUNICATION FROM AUSTRALIA, CANADA, MEXICO AND N EW ZEALAND  
EXPLORATORY DISCUSSI ONS ON MARKET ACCESS : ENVIRONMENTAL SERV ICES 
The following communication, dated 8 July 2019 , is being circulated to Members of the Council for 
Trade in Services in Special Session, at the request of the delegations of Australia, Canada, Mexico 
and New Zealand.  
_______________  
 
 
In JOB/SERV/282, circulated on 13 June 2018, Chile, Mexico, New Zealan d and Panama proposed 
that Members exchange views on current areas of interest in relation to market access, against the 
background of relevant trade, policy, and market developments.  
The environmental services sector is an area of economic and trade impor tance for  Australia,  
Canada,  Mexico and New Zealand,  as well as for numerous other WTO Members. Through this 
communication, we wish to present our initial ideas on a sector of common interest across all regions 
and initiate an exchange with other delegatio ns. Such exploratory discussions would help to better 
appreciate the views of Members on key issues, and provide valuable information regarding market 
access aspirations. The following is presented without prejudice to potential negotiations.  
1  IMPORTANCE O F THE ENVIRONMENTAL SERVICES SECTOR  
1.1.  Enshrined in the Marrakesh Agreement, sustainable development and the protection and 
preservation of the environment are fundamental considerations of the WTO. The Organization has 
directly contributed to these goals through the implementation of rules and agreements as well as 
regular work in various WTO bodies. By adopting the Sustainable Development Goals in 2015, 
leaders have reinforced a commitment to protect the  environment, including through sustainable 
consumption and production, by sustainably managing natural resources and taking urgent action 
on global environmental issues, including climate change.  
1.2.  The nexus of trade and environment presents a unique oppor tunity for WTO Members to show 
leadership and action on mitigating the effects of climate change. While climate change is a challenge 
encountered by all Members, it has been found to have a disproportionate effect on developing 
countries, which tend to bea r the brunt of extreme weather events such as floods and droughts .1 
While domestic policies aimed at fighting climate change are important, only coordination on a global 
level can effectively address both the causes and consequences. In promoting trade lib eralization 
and cooperation in a sector that is central in the work being done, Members can demonstrate yet 
another link between economic and sustainable development across all Member economies. Further 
liberalization of environmental services would also h ave a positive impact on sustainable 
development by supporting the efforts  by all Members, including developing countries and LDCs, to 
integrate them into and derive benefits from the multilateral trading system more broadly .2 Further 
liberalization of env ironmental services provides opportunities for businesses in developed  and 
developing countries to integrate into global value chains due to the localized nature  of 
environmental services . Furthermore, the uptake of technologies linked to environmental ser vices 
                                                
1 IMF, World Economic Outlook, October 2017  Seeking Sustainable Growth:  Short -Term Recovery, 
Long-Term Challenges , Chapter 3.  
2 https://sustainabledevelopment.un.org/topics/trade . JOB/SERV/293  
 
- 2 - 
 
  can further create sustainable jobs, especially in services related to the installation and maintenance 
of environmental products, systems and infrastructure.3   
1.3.  The removal of barriers to international trade in environmental goods and services (EGS)  offers 
an appealing avenue for helping contain the costs of meeting particular environmental goals or 
targets. By increasing the accessibility of more advanced technologies for preventing or mitigating 
environmental harm, trade can contribute to lowering the costs of implementing environmental 
policies while keeping intact their degree of ambition. Trade in environmental services could make 
the prevention and control of pollution cheaper by allowing firms to source the services they need 
from foreign suppl iers4, while creating greater economic benefits.  
1.4.  The economic mapping of trade in environmental services is much more challenging when 
compared to environmental goods, due to a lack of data and the number of cross -cutting sectors 
that can be related to en vironmental services. It is therefore hard to quantify the economic value of 
this sector. That being said, environmental services are intimately linked to environmental goods as 
they ensure the proper functioning and maintenance of those goods, and are oft en supplied in 
conjunction with them. In such cases, environmental services often represent the predominant 
element in the package (on average 65% in value terms) .5 Thus, greater liberalisation of 
environmental services could positively contribute to the e nvironmental goods market by allowing 
firms to source the services they need from price -competitive foreign services suppliers. 
International trade in Environmental and Clean Technology (ECT) products increased from 
CAD 8.3 billion in 2007 to CA D 12.4 bill ion in 2017, indicating a 49.6% growth .6 Considering that 
environmental services require suppliers to possess specific knowledge and skills that can be costly 
and time consuming to acquire, such notable increases in trade in ECT goods highlight the equally  
profitable market that likely exist s in the environmental services sector.  
1.5.  Environmental services is a growing sector in world services trade. With a compound annual 
growth rate of 4 percent from 2008 to 2015, global trade in clean technology, for which 
environmental services play an important role, has doubled during this period to more than 
$1.15  trillion in exports.7 While the emergence of new technologies, such as electronic transactions, 
have opened a range of new possibilities to provide environmenta l services on a cross -border basis, 
for example by remotely controlling equipment via computers, trade in environmental services is 
primarily linked to the commercial presence of services providers as many environmental services 
are infrastructure -dependen t and require a continuous and long -term local presence. Hence, it is 
important for foreign firms to be able to establish affiliates abroad or to invest in local companies8, 
which can provide benefit to the host country’s markets as local firms could benef it from partnerships 
with more established firms so as to acquire industry knowledge and experience .9  
2  RELEVANCE OF GATS CO MMITMENTS RELATED TO  ENVIRONMENTAL SERVI CES 
2.1.  In pertinent international forums, including the United Nations Framework Convention on 
Climate Change (UNFCCC), WTO Members have made commitments to protect the environment and 
to take urgent action on climate change. With a view to enhancing the mutual s upportiveness of 
trade and the environment, Members agreed to focus on trade liberalization in paragraph 31 (iii) of 
the WTO Doha Declaration. With a view to achieving this, and recognizing that the further 
liberalization of environmental services would pr ovide enhanced market access opportunities, 
including for small and medium -sized enterprises, and improved health and environmental 
sustainability in WTO markets, any new initiative on environmental services would recognize the 
                                                
3 United Nations Environment Programme (2018), Trade in Environmentally Sound Technologies: 
Implications for Developing Countries , p. xviii. 
4 OECD 
http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=COM/TAD/ENV/JWPTE(2015)61/FINA
L&docLangua ge=En . 
5 WTO (2010), "Background Note on Environmental Services", Note by the Secretariat, S/C/W/320.  
6 https://www150.statcan.gc.ca/n1/en/pub /16-001-m/16 -001-m2019001 -eng.pdf?st=JQc4WjwZ . 
7 http://analytica -
advisors.com/sites/default/files/2017%20Cana dian%20Clean%20Technology%20Industry%20Report%20Syno
psis%20FINAL.pdf . 
8 WTO, S/C/W/320 . 
9 USITC  (2004). JOB/SERV/293  
 
- 3 - 
 
  meaningful contribution that  the WTO can make towards these broader climate change mitigation 
objectives.  
2.2.  Liberalized disciplines related to environmental services could serve to strengthen regional 
trade in these areas, which in turn could boost productivity for SMEs and increase c apacity in the 
sector. Innovation and investment in niche areas of the sector have the potential to increase demand 
for specialized skills and expertise, thus creating further opportunities for skills transfers, job 
creation, and incentives for new ideas a nd initiatives. All Members could stand to benefit from these 
enhanced opportunities and new GATS commitments in environmental services can play an 
important role for all WTO Members ' economies.  
2.3.  Environmental services are one of the least -committed sector s under the GATS as only 
59 Members10 (as of 2019) have undertaken specific commitments in at least one of the seven CPC 
sub-sectors  (as outlined in Annex) . This may be partially explained by the fact that concerns related 
to environmental protection and po llution mitigation had a lesser profile in the early 1990s than they 
do today. Most WTO Members defined environmental services according to the W/120, with four CPC 
subsectors: A. Sewage services - CPC 9401; B. Refuse disposal services - CPC 9402; C. Sanit ation 
services - CPC 9403; and D. Other, which is assumed to include remaining elements of the CPC's 
environmental services category, i.e. cleaning of exhaust gases (CPC 9404), noise abatement 
services (CPC 9405), nature and landscape protection services ( CPC 9406) and Other environmental 
protection services n.e.c. (CPC 9409) .11 In total, only 328 sub -sectors have been scheduled among 
all WTO Members, and several Members have limited their commitments to consulting and/or 
advisory services in relation to env ironmental services, either across the entire range of committed 
sectors or with respect to some sub -sectors only.  
2.4.  Cross -border supply, or mode 1, would benefit the most from enhanced liberalization, as, on 
average, only 38 % of the Members’ commitments ar e fully bound, 32 % are partially bound, and 
30% are unbound. In the latter category, many are unbound because, in the view of the Members 
concerned, cross -border supply was not technically feasible .12 That could be explained by the fact 
that cross -border su pply of environmental services was commercially insignificant when the GATS 
entered into force. Twenty -five years later, new technologies have now opened a range of new 
possibilities to provide environmental services on a cross -border basis (e.g. remote co ntrol of 
equipment for site remediation). With the advent of information and communications technologies 
and services, environmental services can be increasingly provided on a mode 1 basis (e.g. advisory 
and consultancy services, electronic monitoring of s ewage levels/quality, etc.). More broadly, 
consulting services provided over the Internet are a low -cost and increasingly more accessible means 
of building capacity and sharing expertise and knowledge with developing countries and LDCs. This 
is especially true for environmental services, due to the highly technical nature of the sector, and 
the specialized skills required at the firm level.   
2.5.  Consumption abroad (mode 2)  includes activities such as dismantling of ships, cars, computers, 
etc. in order to obtain and separate recoverable or recyclable materials . There is a high proportion 
of full commitments  for this mode,  on average 71 %. Establishment of a commercial presence 
(mode  3) is the most important mode of supply in this sector as it is highly infra structure -dependent 
and requires a continuous and long -term local presence. The proportion of full commitments under 
this mode of supply is on average 57 %, with subsector 6.C (sanitation and similar services) seeing 
71% of Members taking full commitments. Improving mode 3 commitments across the subsectors 
could serve as an incentive for Members to invest in their own infrastructure as a way to not only 
attract foreign investment, but also create more economic opportunities domestically. With most 
environmen tal services requiring a commercial presence abroad, emerging economies would benefit 
from enhanced mode 3 commitments and experience welfare gains through job creation, higher 
salaries, and knowledge transfer via local partnership and employment opportuni ties13. Finally, 
expanded commitments in mode 4 would be relevant to this sector. When it is not practical or 
feasible to establish a commercial presence, it is common for a company to send engineers abroad 
to direct the performance of local workers. Furthe rmore, horizontal mode 4 commitment can 
encourage activities such as installation or servicing as part of a warranty,  or moving key personnel 
                                                
10 Further, in the context of WTO services negotiations, a number of  Members offered to undertake 
commitments for the first time in the sector or to improve their existing commitments.  See Annex.  
11 WTO, S/C/W/320 . 
12 WTO, S/C/W/320 . 
13 UNCTAD, Trade in Environmentally Sound Technologies: Implications for Developing Countrie s, p. 75 . JOB/SERV/293  
 
- 4 - 
 
  to different branches within an enterprise could serve to further grow the sector and help Members 
build capacity and share expertise across all levels of development. Currently, 13 % of Members have 
taken full commitments on mode 4, while most have commitments referring back to horizontal 
undertakings .  
3  AREA OF INTEREST IN RELATION TO IMPROVEM ENTS TO SCHEDULES  
3.1.  Since this paper acknowledges the importance of commitments in all modes of supply, we have 
interest in hearing Members’ views on ways to encourage the elimination of all barriers related to 
the environmental services sector for all modes of supply. A comprehens ive approach in which 
interested Members could explore which minimal commitments could be taken for all environmental 
services sub -sectors and ways to further ensure higher quality commitments and certainty for 
services suppliers. In practice, these discus sions would add further clarity on what liberalization 
could mean in practice across all modes of supply.  
3.2.  While many services can have an environmental end -use, our interest in terms of improved 
GATS commitments focuses on the more traditional environmenta l services, as defined in CPC, as 
most Members have listed their environmental services commitments according to W/120 structure 
(CPC 9401 to 9406, and 9409). Our main interest focuses on improving the overall level of 
commitments in the sector, as well as  removing listed limitations in order to reflect Member’s 
domestic regimes.  
3.3.  We also acknowledge that other Members may have interests in different areas for 
improvement. Therefore, we are open to hearing views on other services sectors that would be 
relevant because of their close relationship to environmental services.  
3.4.  For greater certainty, our interest in improvements to GATS commitments in the sector do not 
relate to the collection, purification, and distribution of water for human use (as classified in CPC 
Prov. 18). We do not see that undertaking commitments implies that Members somehow have to 
dispose of their equity interests in, or the assets of, a public entity that is a supplier of environmental 
services. We also believe that it is important tha t any discussion also recognize Members’ right to 
regulate, and to introduce new regulations, on the supply of environmental services within their 
territories in order to meet public policy objectives.  
QUESTIONS FOR DISCUS SION  
• How do Members view the contr ibution of trade in environmental services and related policies 
to environmental and sustainable development goals?  
 
• What is the importance of environmental services in the context of domestic policy objectives 
and the contribution of the policy environmen t for trade and investment in that regard?  
 
• What are the areas of interest linked to environmental services that could benefit from improving 
GATS commitments?  Have these interests evolved since earlier discussions in the context of 
services negotiations ? 
_______________  
 
  JOB/SERV/293  
 
- 5 - 
 
  ANNEX – GATS COMMITM ENTS AND OFFERS IN ENVIRONMENTAL SERVICES , BY MEMBER  
Key: 
A. Sewage services  
B. Refuse disposal services  
C. Sanitation and similar services  
D. Other  
 
“X”: means that a specific commitment exists in the corresponding subsector but that no 
improvements were offered;  
“I”: means that an improvement to an existing commitment was offered  in services negotiations ;   
“N”: means that a new commitment has been offered  in services negotiations . 
Bold: means Members that have prop osed new or improved commitments in the sector in their offers 
in the services negotiations.  
 
  
 Commitment /Offer  by sub -sector  
Member  A. B. C. D. 
Albania  X X X X 
Afghanistan  X X X X 
Armenia  X X X X 
Australia  X X X N 
Bahrain, Kingdom of  N N N N 
Barbados     
N 
Bulgaria  X X X X 
Cabo Verde  X X X X 
Cambodia  X X X X 
Canada  X X X X 
Central African Republic     
X 
China  X X X X 
Colombia     
X 
Croatia  X X X X 
Ecuador  X X X X 
El Salvador     
X 
European Union  I I I I 
Fiji  
N N N 
Georgia  X X X X 
Guatemala     
N 
Guinea  X  
X  
Hong Kong, China  N N N N 
Iceland  I I X I 
India   
N N  
Israel  X X X X 
Japan  X I X I 
Jordan    
X X 
Kazakhstan  X X X X 
Korea, Republic of  I I  
I 
Kuwait, the State of  X X X  
Kyrgyz Republic  X X X X 
Lao People's Democratic Republic  X X X X JOB/SERV/293  
 
- 6 - 
 
    
 Commitment /Offer  by sub -sector  
Lesotho  X X X X 
Liberia  X X X X 
Liechtenstein  X X X X 
Mexico  N  
N  
Moldova, Republic of  X X X X 
Montenegro  X X X X 
Morocco  X X X X 
Nepal  X X X  
New Zealand  N N N N 
Nigeria  N N N  
North Macedonia  X X X X 
Norway  I I I I 
Oman  X X X X 
Pakistan   
N N  
Panama  N N  
I 
Peru     
N 
Philippines  N    
Qatar  X X X X 
Romania     
X 
Russian Federation  X X X X 
Rwanda    
X  
Samoa  X X X X 
Saudi Arabia, Kingdom of  X X X X 
Seychelles  X X  
X 
Sierra Leone  X X X X 
Singapore    
N N 
South Africa  X X X I 
Switzerland  X I I I 
Chinese Taipei  X X X I 
Tajikistan  X X X X 
Thailand  I I I I 
The Gambia  X  
X  
Tonga  X X X X 
Tunisia  N N N N 
Turkey  X X X  
Ukraine  X X X X 
United Arab Emirates  X X X X 
United States  X X X X 
Vanuatu  X X X  
Viet Nam  X X  
X 
Yemen  X X X X JOB/SERV/293  
 
- 7 - 
 
    
 Commitment /Offer  by sub -sector  
GATS commitments - unchanged   47 43 47 41 
Offers of i mprovements to existing 
commitments  5 7 4 10 
Offers of n ew commitments  8 9 10 10 
Note: For the whole environmental services sector, the total number of Members that have made offers (in one 
or various subsectors) stands at 25 (EU 25 as 1). 48 Members have GATS commitments but made no offers. 
66 Members have no specific commitments nor have made  offers. 
Source: Updated from JOB/SERV/214 . 
 
__________