Sustainable development | Brussels, 8 September 2015
The Environmental Goods Agreement (EGA): Liberalising trade in environmental goods and services
Since July 2014 the EU and 16 other members (see below) of the World Trade Organization (WTO) have been negotiating an Environmental Goods Agreement (EGA) to remove barriers to trade in environmental or "green" goods that are crucial for environmental protection and climate change mitigation.
What are environmental goods?
Products that directly contribute to environmental protection and climate change mitigation by:
- helping clean the air and water, e.g. carbon dioxide scrubbers
- helping manage waste, e.g. recycling machinery
- contributing to energy efficiency, e.g. heat pumps, thermostats
- controlling air pollution, e.g. measuring equipment
- generating renewable energy such as solar, wind, or hydroelectric, e.g. wind turbines, solar panels
What will the EGA achieve?
At the first stage the talks will focus on removing tariffs on a broad list of environmental goods. The negotiators build on a list of 54 products on which the member countries of APEC (Asia-Pacific Economic Cooperation) have agreed to reduce their tariffs to 5% or less by 2015.
In addition, the intention is for the EGA is to become a 'living agreement' which would allow the addition of new products in the future. The EU's ambition is also to include services related to exports of environmental goods (e.g. repair and maintenance of wind turbines) and to tackle non-tariff barriers, such as local content requirements or restrictions on investment. The EU will be pushing for an ambitious and comprehensive agreement that will bring real benefits to trade and to the environment.
At this stage, only some WTO members have chosen to take part in the talks. This is why they are described as 'plurilateral'. Once a critical mass is reached to get an agreement, the benefits of this plurilateral initiative will be applied to all WTO members using the Most Favoured Nation (MFN) principle. Ideally, the agreement would be made part of the package of WTO agreements so other WTO members could open up their markets.
What are the benefits of the EGA?
The initiative shows how trade policy can positively contribute to environment protection and tackling climate change – a "win-win" situation. It can:
- boost global trade in green goods and services
- support green industry globally
- help meet climate and energy targets to be agreed in the new Climate Agreement end 2015 in Paris
- provide cheaper access to these technologies worldwide
- help make rapidly growing cities greener and more sustainable
- strengthen security of energy supply in the EU and reduce dependency on fossil fuels
- create an impetus for talks on green goods and services in the World Trade Organization
Who is taking part?
Australia, Canada, China, Costa Rica, Chinese Taipei, the European Union, Hong Kong (China), Japan, Korea, New Zealand, Norway, Switzerland, Singapore, United States, Israel, Turkey and Iceland.
Together, these countries account for the majority of the world trade in environmental goods.
Green growth is part and parcel of the EU's economic and environmental policies. Opening up trade in environmental goods and services can help develop green growth further. The EU is working to liberalise trade in environmental goods and services at multilateral level in the World Trade Organisation, and in its free trade agreements. It is also working to make sure existing rules are enforced.
On 24 January 2014 the EU, together with 13 other WTO members pledged to launch negotiations to liberalise global trade in environmental goods (read the Davos statement and the EU press release). The EGA negotiations were formally launched in Geneva on 8 July 2014 (see the joint statement by all countries involved in the green goods negotiations, the EU press release and listen to the press conference). The launch of the negotiations was accompanied by a stakeholders' event organised by the International Centre for Trade and Sustainable Development.
The European Commission negotiates on behalf of the EU. It bases its work on the instructions the EU's Member States in the Council gave it in 2001 to negotiate the WTO talks on the Doha Development Agenda. On 8 May 2014 the Council gave the Commission additional instructions to negotiate the EGA.
The European Commission has launched a Sustainability Impact Assessment (SIA) on Environmental Goods Agreement to assess its economic, social and environmental impact.
Environmental goods and services in the EU
The EU has technologically advanced and world-class companies providing environmental goods and services. Between 2002-2011 jobs in the 'green sector' in the EU rose from 3 to 4.2 million full-time equivalents. Even during the recession years (2007-2011), employment grew by 20%.
The EU is a world leader in exports and imports of environmental goods, followed by China and other Asia-Pacific Economic Cooperation (APEC) countries. Although environmental goods are a relatively small part of EU trade, the sector is very dynamic. In 2013 EU exports of the 54 APEC list products amounted to €71 billion, imports to €34 billion. If we include products an EU list of 165 green goods, exports rise to €146 billion (around 8% of the EU's total) and imports to €70 billion.
For more information
- Report from the 13th round of negotiations, May 2016
- Chair's statement on state of play of Environmental Goods Agreement negotiations, 14 December 2015, Nairobi (10th WTO Ministerial Conference)
- Stakeholder seminar "Environmental Goods Agreement – contribution of trade to climate action", 7 December 2015, Paris (UNFCCC)
- Report from 11th round of Environmental Goods Agreement negotiations, 30th November – 4 December 2015, Geneva
- State of play of the EGA negotiations: see presentation, 3 June 2015
- Stakeholder roundtable: The Environmental Goods Agreement - Promoting EU environmental objectives through trade, 3 June 2015, Brussels
- Workshop on Services for the Delivery of Environmental Goods What Implications for Trade Negotiations? 13 November 2014, Brussels
- Public consultation on trade in environmental goods (“Green Goods Initiative”) launched by the Commission on 5 June 2014 (deadline 31 July 2014).
- The global industry support letter on the green goods initiative
- 2030 climate and energy goals for a competitive, secure and low-carbon EU economy , 22 January 2014 - Press release
- Green Employment Initiative: Tapping into the job creation potential of the green economy, Brussels, 2 July 2014 - Communication from the Commission (COM(2014) 446 final)
- Listen to the press conference from 8 July 2014