The WTO Environmental Goods Agreement (EGA) is an agreement currently under negotiation since July 2014, which works towards removing barriers to trade and achieving global free trade in 'green' goods.

What is the EGA?


Environmental goods are goods that contribute to environmental protection, climate action and sustainable development. These can include such items as:

  • Wind turbines.
  • Water treatment equipment.
  • Solar water heaters.
  • Measuring equipment for controlling air pollution.
  • Recycling machinery


The Environmental Goods Agreement builds on the list of 54 environmental goods on which APEC (Asia Pacific Economic Cooperation) members have already committed to reduce tariffs to 5% or less by 2015.


The aim of the Environmental Goods Agreement is to create “win-win-win” situations for trade, the environment and development. It will boost trade in green goods, provide cheaper access to green technologies worldwide and support global green industries.


Currently, global trade in environmental goods is set to skyrocket: it was estimated to be worth over $1 trillion in 2013, but is expected to grow to around $3 trillion by 2020. It is important for New Zealand to be part of this growth to both boost our exports and contribute to our efforts toward addressing environmental challenges, including climate change.


The EGA is currently being negotiated in the WTO by 17 negotiating parties, representing 44 WTO members. Collectively, these parties currently account for over 85% of global trade in environmental goods. The EGA will come into effect once the EGA participants constitute a critical mass in trade. The benefits of the EGA will also be extended to all other WTO members under the principle of ‘most favoured nation’ status. 

 

Why it’s a priority for NZ

Environmental goods are already an important and growing part of our economy, with exports in 2015 to EGA participants worth an estimated NZ$2 billion, and worldwide imports to New Zealand at NZ$4.8 billion. New Zealand’s major environmental goods exports include:

  • Energy efficiency technologies.
  • Coniferous wood.
  • Measuring equipment


New Zealand sees the Environmental Goods Agreement as fitting well with a range of Government policies and priorities:

  • Supporting New Zealand’s climate change policies and goals.
  • Supporting the Business Growth Agenda through advancing free trade and increasing New Zealand exports to 40% of GDP by 2025.
  • Promoting the diversification of New Zealand’s export profile.
  • Increased high-value manufacturing.
  • Sustaining a robust and viable World Trade Organisation.

 

What are the potential benefits?

  • New Zealand will gain better access to a wide range of rapidly growing international markets for environmental goods, including some markets that we don’t yet have a free trade agreement with.
  • The agreement will promote cheaper imported environmental goods in this country through tariff reductions, and enhanced access to a range of environmental goods.
  • It will also help promote New Zealand innovation as companies take advantage of tariff reductions and increased access to new and existing global markets. The agreement as a whole will promote the creation of a cleaner environment – freeing up trade in environmental goods can make an immediate and concrete contribution to the environment. Increased global trade flows in environmental goods are expected to make clean technologies more cost competitive.
  • It will support efforts to tackle climate change globally: enabling more efficient climate change mitigation through technologies, increase energy access and secure lower cost and dissemination of environmental technologies through globalised supply chains.

A Trade Sustainability Impact Assessment (external link) on the Environmental Goods Agreement was published in March 2016. The assessment, funded by the European Commission, concluded that the agreement will have significant positive environmental and socio-economic impacts.

 

Background to the negotiations

At the APEC Leaders’ Summit in Vladivostok, Russia in December 2012, Leaders (including Prime Minister Rt Hon John Key) reaffirmed their commitment to promote green growth and to seek practical, trade-enhancing solutions to address global environmental challenges. As part of this, APEC Leaders endorsed a list of 54 environmental goods (external link) on which economies would reduce applied tariff rates to 5% or less by the end of 2015. This list included items such as solar water heaters, water filters, waste sorting devices and wind-powered electric generators.


Building on this commitment, in January 2014 14 WTO members – including New Zealand – gathered in the margins of the World Economic Forum in Davos, Switzerland and pledged to launch negotiations on liberalising and achieving global free trade in environmental goods. A Joint Statement regarding Trade in Environmental Goods was issued following this meeting (external link).


These negotiations were formally launched on 8 July 2014 in Geneva, accompanied by a Joint Statement regarding the Launch of the Environmental Goods Negotiations (external link). Original parties to the negotiations were New Zealand, Australia, Canada, China, Costa Rica, the European Union, Hong Kong (China), Japan, Korea, Norway, Singapore, Switzerland, Chinese Taipei and the United States. Since then, Israel, Iceland and Turkey have also become parties to the negotiations.

 

Negotiations Update

Eighteen negotiating rounds have been held from 2014 - 2016. Initial rounds focused on the development of a substantive list of product nominations in various thematic areas (such as environmental monitoring, energy efficiency or wastewater management), before advancing discussions through subsequent negotiating rounds on a more focused list of environmental goods.

At the WTO 10th Ministerial Conference in Nairobi, Kenya in December 2015, the WTO Director-General Roberto Azevêdo welcomed the statement of the Chair of EGA negotiations, noting that there had been considerable progress and a high degree of convergence in many areas of the negotiations. The Chair’s statement is available here (external link).

G20 Leaders and Ministers pledged to aim to conclude a high-quality agreement by the end of 2016 at the G20 Trade Ministers Meeting in Shanghai in July and the G20 Leaders’ Summit in Hangzhou in September. However, EGA negotiations stalled at the EGA Ministerial meeting in Geneva in December 2016 after participants failed to reach a consensus on the final list of products to undergo tariff elimination. A new deadline to conclude has not been set, but in the meantime New Zealand will make best endeavours to work with others to secure a timely conclusion and achieve an outcome that includes New Zealand’s key priorities.

The EGA Ministerial co-Chairs, USTR Ambassador Mike Froman and EU Trade Commissioner Cecilia Malmstrom, issued a joint-statement after negotiations failed to conclude. The statement is available here (external link).

   

How to get involved

The Ministry is keen to hear from businesses and stakeholders about the EGA. We are especially interested to hear from New Zealand exporters, businesses and individuals whose products may be covered under this agreement, or who plan to enter into the environmental goods sector.


In addition, we welcome (and are also happy to arrange) meetings with stakeholders, businesses and members of the community, including Iwi/Māori organisations, to discuss how the EGA may affect them.


MFAT made an initial call for public submissions on EGA negotiations in 2014, and as part of this process, prepared a preliminary list of environmental goods (including the 54 products identified by APEC) for public consultation. Read New Zealand's Preliminary List of Environmental Goods (external link)[PDF, 391 KB]. The opportunity to nominate additional environmental goods as part of EGA negotiations has now closed, however we would welcome any submissions on environmental goods for any potential future review of the EGA.


All submissions are treated on a strictly commercial-in-confidence basis by the New Zealand Government and will not be attributed specifically to you personally or your company.


It would be helpful if your submission included the following information:

  • The Harmonized Commodity Description and Coding System numbers (HS2012) for each product. Descriptions can be found in the New Zealand working tariff document on the NZ Customs website (external link).
  • proposed destination countries; and
  • the environmental uses and benefits.


You can email or post the completed submission document to us, or you can give feedback by phone or in person.


Download submission document in Word (external link) [DOC, 182 KB] or submission document in pdf (external link) [PDF, 130 KB]
Send your submission to:


Email: egnegotiations@mfat.govt.nz


WTO Environmental Goods Negotiations
Trade Negotiations Division
Ministry of Foreign Affairs and Trade
195 Lambton Quay
Wellington 6011


Phone: +64 4 439 7158

 

Additional Resources

• WTO: Eliminating trade barriers on environmental goods and services (external link)