Barriers to Trade in Environmental Goods and Environmental Services: How Important are They? How Much Progress at Reducing Them?

Abstract

Barriers to trade in Environmental Goods (EGs) and Environmental Services (ESs) are documented for a large sample of countries and compared with barriers to trade in other goods and other services. Some progress at reduction in barriers has occurred at the national, regional and sectoral levels but not at the multilateral level, where countries have been unable to agree on an approach to reduce barriers to trade. For EGs, tariffs and NTBs are highest for low-income countries and low for high-income countries. First-order estimates of the import response to a 50% reduction in tariffs for low-income countries suggest an increase in imports of around 4%. For ESs, estimates draw on the comparison of an Environment Services Liberalization index calculated across modes and services subsectors. The limitations of this ordinal index coupled with the inadequacy of the UN CPC list where services are defined in an exclusionary manner so that they cannot appear on two lists, casts greater uncertainty as to the informational content of the commitment measures presented here which, at best, indicate bindings on market access and national treatment rather than actual policies. It would appear nonetheless that at least as great, and probably greater commitments took place in the environmental sectors (as defined by the CPC) both multilaterally and regionally than for 'other' services with the same pattern across income groups: greater commitments observed for HIC than for MICs and LICs although it is widely recognized that GATS commitments by HICs largely amounted to consolidated members' unilateral services policies. North-South Regional Trade Agreements resulted mostly in commitments by the Southern partners indicating greater prospects for reducing barriers to trade in a regional than in a multilateral context.

The Critical Mass Approach to Achieve a Deal on Green Goods and Services: What is on the Table? How Much to Expect?

“…Indeed, the APEC list of 54 products is the outcome of trimming from an original list of some 200 odd products. Melo and Vijil (2014) reported estimates with both the 'core list' of 26 products proposed by a group of countries in 2011 and the 'WTO list' of 411 products drawn by adding all the lists, obtaining similar results with both lists. Since agreement on an extended list may be difficult to reach, we concentrate here on the APEC list of 54 products, but also report some estimates with the most comprehensive WTO list, as an estimate of what might be at stake, should countries agree on an all-encompassing list of EGs.…”

“…(Hoekman, 2013). By documenting what is now on the table and the successes and shortcomings of the twelve years of the Doha negotiations (see Melo and Vijil, 2014), this paper informs on what might be hoped-for from issue-specific negotiations among a smaller group of countries compared with a counterfactual PTA situation. The case of green goods examined here could also serve as a benchmark for other areas where dialogue, learning and negotiations could take place among a subset of WTO members, such as in the case of investment and competition policies.…”

“…E-mail: Jaime.de_melo@ferdi.fr ‡ DG of the Treasury and FERDI. E-mail: mariana.vijil@dgtresor.gouv.fr * This paper draws on and extends Melo and Vijil (2014). Thanks to Gaëlle Balineau, Ian Gillson, Bernard Hoekman, Sebastien Miroudot, Aymeric Pontvianne, Jehan Sauvage, Gisèle Schmid and Ronald Steenblik for comments.…”

“…Melo and Vijil (2014) also report estimates of the uniform tariff (the OTRI) that, if applied on home imports instead of the current structure of protection, would leave aggregate imports at their current level. The formula captures the fact that the welfare costs of tariffs rises more than proportionately with the tariff and that it is positively related to the variance in tariffs.…”

“…Melo and Vijil (2014) report the difference between consolidated tariffs and applied MFN tariffs or "binding overhang", a margin of flexibility ("policy space") for governments. This flexibility is greatest for middle income countries, and practically non-existent for HICs.…”