Environmental Goods – Potential Savings Opportunity

Dear Friends:

We are writing about a potential opportunity for every company that imports, manufactures and/or exports “environmental goods”.

As we previously advised, there is an effort afoot at the international level to reduce/eliminate customs duties on “environmental goods” through an environmental goods agreement (EGA).  The EGA negotiations have been underway at the World Trade Organization (WTO) for several years.  Fourteen WTO Members, including the United States, the EU, China, Japan, Korea, and Singapore, recently reached consensus on a list of 54 environmental goods that they are prepared to eliminate tariffs on under the EGA.  These WTO Members account for 86% of the estimated $1 trillion global trade in environmental goods.  The list of 54 environmental goods, which was endorsed by the Asia-Pacific Economic Cooperation (APEC), includes products typically thought of as “environmental goods”, such as solar panels, solar water heaters, wind turbines, etc., but it also includes articles such as gas turbines and laboratory instruments and equipment used in environmental technologies (e.g., air quality monitors, furnaces used to destroy hazardous and solid waste, etc.).  The 14 WTO Members are seeking to expand the coverage of the current list to include new goods and, at the same time, seek the participation of other willing WTO Members (the negotiations are expected to produce a plurilateral agreement among willing WTO Members – similar to the Information Technology Agreement).

In furtherance of that effort, the United States is seeking to expand the list of goods for which tariffs are planned to be reduced/eliminated.  Companies with an interest in having their products designated as “environmental goods” under the EGA should participate in this process, so as not to be left behind.  Specifically, the United States Trade Representative is seeking written comment on:  (1) products that the United States should seek to include under the EGA; (2) the products’ environmental uses and benefits; (3) U.S. trading partners that are significant producers or consumers of environmental goods; and (4) how to ensure that the EGA remains relevant in the future.  A copy of the Federal Register notice with more specific may be accessed here.

Companies involved in the manufacture and/or trade of articles with an environmental benefit should take this opportunity to make their interests known to U.S. trade officials, as the elimination of tariffs on such goods on a multi-jurisdictional basis could provide significant savings and result in increased sales opportunities.  Written submissions from interested parties are due to the United States Trade Representative on May 5, 2014.  A public hearing will be held June 5, 2014.

If you have any questions concerning whether your products may be considered an “environmental good”, or if you would like to discuss obtaining coverage of your Company’s products under the EGA, please let us know.

Best regards,

Ted

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