EGA: Risks and opportunities for the environment

27 November Nov 2015 1011 27 November 2015

The Environmental Goods Agreement (Ega) would help make it easier to trade internationally in environmental goods and technologies that contribute to environmental protection.

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The Environmental Goods Agreement (Ega) would help make it easier to trade internationally in environmental goods and technologies that contribute to environmental protection.

The last round of TTIP negotiations between the European Union and the United States seems to confirm that there are several years before any deal could come up for final ratification. TTIP, the economic NATO, is not a traditional trade agreement aimed at reducing border tariffs, which are already at minimal levels between the EU and USA. Instead, critics fear that the treaty will undermine social standards, labour rights and the environmental regulations that we hold most dear.
Meanwhile the so-called ‘investor-state dispute settlement’ mechanism (ISDS) remains in limbo. The provision would allow companies the opportunity to demand compensation wherever they felt that their ‘legitimate expectations’ had been upset by the passage of new laws or regulations.
Recently, the European Trade Commissioner, Cecilia Malmström, revealed plans for a new investor protection system, as an alternative to the highly controversial ISDS. In the end, the proposal falls short of the principle objections that Greens and civil society at large have raised against ISDS inclusion in TTIP: the new ICS proposal only touches upon this situation without resolving it. It is indeed just a reform of the existing ISDS system.

But it is time to look closer at another agreement in view of the Conference of Paris. Starting on November 30, representatives from more than 190 countries will gather in the capital of France for the 21st conference of parties (COP21) to the UN Framework Convention on Climate Change (UNFCCC) which sets out to avoid dangerous man-made climate change. Simply put, the goal of the convention is to reduce emissions to limit the global temperature increase to 2°C.

The Conference will provide a neutral platform for discussion on the Ega, Environmental Goods Agreement. Recognizing that “the global challenges we face, including environmental protection and climate change, require urgent action”, United Nations, the European Union – on behalf of its 28 member states – and 16 other members of the World Trade Organisation (WTO) whp officially launched trade talks on July 2014 to reach an agreement to eliminate duties on a wide range of green goods, in order to increase their uptake in the global market.

Without outlining a specific time frame for the discussions, the group expects the EGA to make it easier to trade internationally in environmental goods and technologies that contribute to environmental protection, and in particular fight against climate change. The negotiations, at least in the initial stages, will only focus on tariffs but it would have to be extended to include reductions in barriers to trade in Environmental Services.

Europe accounts for about one-third of the world market in environmental goods and services, and is expected to rise to 1700 billion by 2020. According to its supporters, the EGA could help countries to contribute to enhancing security of energy supply, reduce their dependency on fossil fuels, and cut their greenhouse gas emissions.

But what is an environmental goods? Are they products whose purpose is to respect and protect the environment? Or should a broader definition be adopted that includes those goods that are also made out of eco friendly materials?
The number of goods and services proposed are based on the list developed by APEC, for which its member states pledged to lower the applied tariff rated to 5 percent or less by the end of 2015. Apec’s list includes renewable energy components, waste management’s systems, vehicle filters and air quality meters.
Last year, Europe launched a public consultation among member states inviting them to submit a list of products they believe should be included in the agreement. At the moment, ten environmental categories are covered by Ega: solid and hazardous waste management, air pollution control, water waste management, and water treatment, cleaner and renewable energy (solar, wind, biomass, hydro, etc.), energy efficient products, resource efficient products and technologies; noise and vibration abatement, clean-up or remediation of soil and water, environmental monitoring and analysis.

But trade is never a zero-sum game. The risk is that the ecological agreement thought up to protect the environment, reigns in the interests of corporations. Companies like Coca-Cola and Wal-mart lobbied to get the environmental sustainability goods they procure in their global chain included on the list of goods qualified for lower tariffs under the agreement.
So the issue of giving a proper definition for an environmental good or specific criteria is so crucial to avoid putting on the EGA list, which now counts for more than 700 goods classified as green, and a number of products that have questionable environmental benefits for lowering tariffs. If bicycles are appropriate for the inclusion on the list because they are having a positive effect on the environment in terms of energy savings, the relief of urban congestion and promoting a healthier lifestyle, the inclusion of products like biodiesel, or those containing asbestos have questionable environmental benefits.

But it is not expected that thousands of people would take to the streets against the EGA agreement. Because as President Barack Obama said last year, "there is no contradiction between a sound environment and strong economic growth. Furthermore, one could also answer that part of the damage to the environment stems directly or indirectly from the increase of international trade."


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