On March 21, the Obama Administration formally notified Congress that it intends to enter into a new plurilateral trade negotiation in the World Trade Organization (WTO) to eliminate tariffs on environmental goods. The agreement could cover a wide variety of environmental goods, including, solar panels, wind turbines, hybrid power cells and catalytic converters, which are subject to tariffs as high as 35 percent in some cases.
Global trade in environmental goods is nearly $1 trillion annually, and accounted for $106 billion in U.S. exports in 2013.
The Obama Administration’s notification follows a January 24 announcement by the United States and 13 other WTO members (Australia, Canada, China, Costa Rica, the European Union, Hong Kong, Japan, Korea, New Zealand, Norway, Singapore, Switzerland and Taiwan) that they will launch negotiations on an Environmental Goods Agreement (EGA), building on a commitment to reduce tariffs on 54 environment goods by the end of 2015.
The Administration’s notification triggers a 90-day consultation period, during which the Administration will consult with Congress, receive written comments from interested parties and hold a public hearing on June 5, 2014, on the product-scope of the EGA, among other factors.
Written comments and requests to testify at the public hearing are due by May 5, 2014. The EGA negotiations are likely to begin in July.
The EGA negotiations present an important opportunity for producers and users of environmental goods to lower their supply-chain costs and improve their global competitiveness by lowering tariff barriers. Producers and users of the following environmental products should consider submitting comments and becoming involved in the EGA talks:
- Water purification and filtration equipment
- Wastewater treatment technology
- Solar water heaters
- Hybrid-drive technology and batteries
- Emission control technology
- Gas and wind turbines
- “Green energy” power generation equipment and components
- Solar panels and photovoltaic cells
- Power control technology and equipment
- Smart grid technology
The McDermott Difference
McDermott Will & Emery’s International Trade Group has extensive experience counseling multinational clients on global trade and market access initiatives, and is helping companies develop strategies for the EGA negotiations, working with officials from the Office of the United States Trade Representative, U.S. Department of Commerce, U.S. Department of State and U.S. Congress. Our group is well positioned to advise multinationals and trade associations on the EGA negotiations, including developing company and sector-specific priorities and negotiating strategies.