US industries press for ‘green’ trade accord

They’re concerned that emerging economic giants India, Brazil, and China may gain the upper hand in this hot market.

China Newsphoto/Reuters/File
Wind turbines producing electricity spin at a wind farm in Daban, northwest of China's Xinjiang.

With interest in green technologies booming globally, a group of US industries and trade organizations is pressing the Obama administration to seek an international agreement specifically liberalizing trade in environmental goods and services.

The United States and the European Union are on record since 2007 supporting inclusion of an environmental chapter in the eight-year-old Doha Round of international trade negotiations.

But concerns the Doha Round is going nowhere – while high tariffs and other trade barriers are dampening what could be a hot market in green technologies and services – are behind the private-sector idea that a separate global green-trade agreement be negotiated outside the Doha talks.

“Promoting an EGSA [environmental goods and services agreement] would permit the US – both the [White House] and Congress – to demonstrate leadership,” says Jeremy Preiss, vice president and chief international trade counsel for United Technologies Corp., and part of the trade group that sent a letter to President Obama last week encouraging US action on a green accord.

“Not only would it increase trade in environmental goods,” he adds, “but it would further the avowed Obama administration objective of addressing climate change and building the green economy.”

Another reason US business wants a green global trade agreement: It would bring into a rules-based green market emerging economic giants like India, Brazil, and above all China, which want access to the developed world’s green know-how or intellectual property but that resist opening doors to developed countries’ green goods and services. Concern is growing that China is using the absence of a global green-trade accord to corner what many experts believe will be the next generation’s auto or steel industry.

“We’re not the only people who work in this area,” says Bill Reinsch, president of the National Foreign Trade Council [NFTC] in Washington. “The Chinese are very interested in this.”

Environmental goods and services may sound like a bureaucratic phrase, but industry officials say it covers everything from wind and solar technologies to oil skimmers deployed in spills and on to the engineering and service contracts that accompany sales of green goods.

In their letter to Obama, the NFTC and eight other groups including the US Chamber of Commerce and the Business Council for Sustainable Energy encourage the administration to consider going outside the World Trade Organization’s Doha Round to secure a timely environmental goods and services agreement.

Saying the issue should be pursued in “all appropriate international economic and environmental forums,” the letter suggests the Forum on Asian Pacific Economic Cooperation and the Organization for Economic Cooperation and Development as two possible venues.

The organizations are also pressing for the issue to be addressed at global climate talks in Copenhagen in December, and at a special G20 summit in Pittsburgh next month. Industry officials say there is a precedent for concluding a separate agreement in the information technology agreement that was reached in 1995.

But US trade officials have resisted the idea of pulling green trade out of the Doha Round out of concern for the impact such a move would have on global trade talks.

“There’s concern that you drive the final nails in the coffin of Doha if you start breaking off” sectors for partial accords, says Mr. Preiss.

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