Guest Contributor William Krist: Environmental Goods and Services in APEC Negotiations

Leaders of the Asia-Pacific Economic Cooperation (APEC) resolved to cut tariffs on environmental goods to 5 percent or less by 2015 and to remove barriers to expanded trade in environmental goods and services at their meeting November 8 to 13 in Honolulu. If accomplished, this could be a boon to both U.S. exporters and to the environment.

U.S. tariffs on many green goods are already 5 percent or less, so fulfilling this commitment would not require significant action by the U.S. However, tariff rates maintained by China and some other APEC members are significantly higher, and reducing these to five percent or less could help American exporters. Reducing trade barriers also has the potential to promote better environmental stewardship by APEC members.

However, implementation of this commitment will be difficult.  APEC members agreed to develop a list of environmental goods to be covered, but defining environmental goods has proven to be a sticking point in the WTO Doha round negotiations. If APEC members succeed in this effort however, it could be a model for the deadlocked WTO Doha round negotiations, since APEC members account for fifty percent of the world’s GDP and forty percent of world trade.

An advantage of APEC is not to legally bind its member economies, which can promote self-motivated initiatives by each member and enable APEC to compromise on more ambitious goals; however, this principle can be a disadvantage as it makes compliance more problematic.

Sources: APEC

Photo Credit: EIA

William K. Krist is a Senior Policy Scholar at the Woodrow Wilson Center.  He is a former Senior Vice President of the American Electronics Association.  He has written extensively on trade, development, and the environment. Takanori Hayashi is a Research Assistant at the Woodrow Wilson Center.

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