Elimination of Tariffs on Environmental Goods Possible

July 8, 2014

Shipping lanes

Thanks to E & E News for this story:

The United States and 13 other World Trade Organization members will discuss the possible easing of tariffs on environmental goods under a new negotiating track launching tomorrow in Geneva, Switzerland.

The U.S. trade representative announced plans early this year to pursue lower tariffs for goods like renewable energy components and advanced battery technology under President Obama’s 2013 Climate Action Plan.

In a letter to House Speaker John Boehner (R-Ohio) and Senate President Pro Tempore Patrick Leahy (D-Vt.) in March, U.S. Trade Representative Michael Froman stated that removing barriers to the trade of solar panels, wastewater treatment and other commodities would help the United States achieve its domestic environmental goals while encouraging other countries to improve their environmental practices.

“By eliminating tariffs on the environmental technologies we need to keep our air and water clean, for example, we can make them cheaper and more accessible to everyone,” Froman wrote.

It would also be a boon, he said, to U.S. businesses, which are international leaders in environmental technologies. Global trade of environmental goods has grown substantially in recent years and could expand further if trade barriers were reduced or removed.

The United States also stands to gain, he wrote, because its own tariffs on environmental goods are relatively low, whereas many of its trading partners impose levies of up to 35 percent.

The Asia-Pacific Economic Cooperation already maintains a list of products for which tariffs are capped at 5 percent because of their environmental benefits. If these negotiations succeed in expanding that limit to include a wider range of products, Froman said, that could help balance the playing field for U.S. businesses.

The multiparty negotiations will include other major producers and consumers of “environmental goods,” including China and the European Union. The participants will encompass 86 percent of the market for environmental goods, according to the Office of the U.S. Trade Representative.

Edward Cazalet, vice president for Megawatt Storage Farms Inc., who testified before a USTR panel last month, said reduced tariffs would make the batteries his company sells more profitable. That in turn would encourage other countries to use more renewables, reducing the greenhouse gas output.

But he said it would be difficult to define “environmental goods,” a designation a variety of businesses will seek to qualify if the negotiations succeed.

“The boundaries of environmental tariffs are somewhat vague,” Cazalet said. “There will be debate as to what is an environmental technology.”

Source: E & E News

Photo: Businessman selecting lane on the large world shipping routes map from Shutterstock



Dawn Killough

has over 15 years experience in the construction industry and is the author of Green Building Design 101, an e-book available from Amazon. She is a LEED AP and Certified Green Building Advisor, and has worked on the LEED Certification of three projects in Salem, Oregon.