Environmental Goods Agreement

Dear Friends, 

As you may recall, for the last year, the United States Trade Representative has been actively engaged in negotiating an Environmental Goods Agreement (“EGA”) with sixteen separate customs territories (plus the EU) at the WTO.  Last week, the USTR official with responsibility for these negotiations provided an optimistic briefing on the progress made through the most recent (6th) round of negotiations, and explained that USTR was now looking for further assistance from the private sector.  

The USTR is requesting that businesses with an interest in the outcome of the EGA negotiations provide non-branded 1-page product summaries, which identify the relevant features and environmental benefits of products under consideration for inclusion in the agreement. The USTR will compile these summaries in an internal database, which will be accessible to negotiators from all delegations, for use in the negotiations.  

We believe that this represents a significant opportunity for companies engaged in the global trade of environmental goods.  This is a chance to meaningfully frame the dialogue regarding environmental credibility and which products should be included in the agreement.  The potential long-term benefits of reduced or eliminated duties on a wide range of products in numerous jurisdictions are substantial. 

If you have any questions as to whether your products may be eligible for benefits under this agreement, or if you would like to see a sample 1-page product summary, please let us know. 

Best regards,
Ted

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Environmental Goods — Potential Savings Opportunity

Dear Friends:

Further to the below, we wanted to let you know that the United States will hold its first negotiations today with the thirteen other WTO members who committed to negotiate the Environmental Goods Agreement (EGA). Over the coming months, the WTO members will negotiate product coverage under the EGA, building upon the list of the 54 environmental goods on which the APEC Leaders agreed to either reduce or eliminate tariffs on by the end of 2015.

As you know, the U.S. Trade Representative has solicited written comments from industry in preparation for the negotiations, held a public hearing and meetings with Congress and other interested stakeholders and requested that the U.S. International Trade Commission conduct two studies to help inform the United States’ negotiating strategy on product coverage under the EGA. The U.S. International Trade Commission is expected to release the results of the studies in August and October.

As the negotiations move forward, the U.S. Trade Representative said that it will continue to consult with industry and other stakeholders to ensure that the EGA delivers concrete benefits to the United States. While time is short, if you are interested in participating in the process (e.g., having a product added to the list for consideration for duty free treatment), there are still steps companies can take to try to get considered. If you’d like to discuss this further, please let us know.

We hope that this is helpful. We will continue to keep you apprised of developments with the EGA.

Best regards,

Ted

EPA & Customs

Dear Friends:

I saw an interesting article about a report recently issued by the U.S. Environmental Protection Agency (EPA), Office of Inspector General (OIG) that I thought you should know about.

In the report (accessible here), the OIG recommends that EPA obtain import data from U.S. Customs and Border Protection (CBP), and export data from the U.S. Census Bureau, to identify U.S. companies and facilities that are not in compliance with the Clean Air Act risk management plan (RMP) requirements.

Under EPA regulations, facilities that have more than a threshold quantity of any of 140 regulated substances on site in any one process are required to implement and submit to the EPA an RMP that includes a hazard assessment, prevention program and emergency response program.

The recommendations in the report came after the OIG analyzed vessel manifest data related to imports of hazardous substances.  The OIG cross-referenced that import data with the EPA’s RMP National Database to identify facilities/companies that may not be in compliance with RMP requirements.  The OIG identified four situations that could indicate that facilities need to prepare or revise their RMPs:

  1. Imports of chemicals above the reporting threshold to facilities with no RMP.
  2. Return shipments of large empty containers to facilities with no RMP.
  3. Imports of chemicals in amounts greater than the amount reported in the facility’s RMP.
  4. Large shipments of regulated chemicals for which consignee information was not available.

The OIG recommended further analysis and potential on-site inspections to determine whether facilities falling into one or more of the above categories are in compliance with Clean Air Act requirements.  Specific states of concern are also cited in the report.

We see this as part of a growing trend of enhanced cooperation between CBP and other federal agencies to identify and pursue enforcement actions.  As you know, we generally recommend that all companies request their Importer Trade Activity (ITRAC) data from CBP Headquarters at least once a year and incorporate its review into their import compliance programs.  This is the same data that CBP uses when conducting audits.  Now, the ITRAC data could also serve as an invaluable tool to monitor and identify other compliance gaps such as those identified by the OIG at EPA.

We hope this helps.  If you have any questions related to the OIG report or would like to discuss requesting your ITRAC data from CBP Headquarters, please let us know.

Best regards,

Ted

Extensive List of “Environmental” Goods Being Studied By United States for Elimination of Customs Duties

Dear Friends:

We wanted to provide you with an update on the effort to reduce/eliminate customs duties on “environmental goods” through international agreement.

Every company should review the attached list of “environmental goods”.  The items described on this list are under consideration by the United States for possible elimination of customs duties under an environmental goods agreement (EGA).  As you will see, the list is extensive and includes a number of items that are not traditionally thought of as “environmental goods” (e.g., chemicals, ball bearings, certain electronic equipment, consumer products, etc.).  The economic effect of providing duty-free treatment for these goods in the United States under the EGA is currently being studied by the U.S. International Trade Commission (ITC).  We anticipate that the ITC will request public comment on these goods in the near future.

Companies with an interest in having the items on this list designated (or not designated) as “environmental goods” should act now to submit comments to the U.S. Trade Representative by the May 5, 2014 deadline referenced in our earlier e-mail below.  If your company’s goods are not on the list, it is not too late to have them considered as “environmental goods”, if they have some environmental benefit, however slight.  The attached Client Alert describes the significance of getting your company’s products covered under the EGA and the next steps to take.  Companies whose products are covered under the EGA stand to achieve a significant competitive advantage (particularly as compared to companies whose products are not covered).

Please let us know if you have any questions about the EGA negotiations or would like our assistance with making submissions to USTR.

Best regards,

Ted

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