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Recent national policies of WTO members, such as the European Union`s CBAM and China`s Emissions Trading System (ETS), underscore the growing need for a comprehensive and multilateral approach to tackling climate change. One of the WTO`s core competencies is to facilitate multilateralism and prevent new barriers to trade. The recognition that climate change requires globally coordinated efforts is reflected in the ongoing plurilateral discussions in the WTO. There are currently 18 participants representing 46 WTO members negotiating the abolition of tariffs on environmental goods, but most of the participants come from developed countries. China, Turkey and Costa Rica are the only participating countries from developing countries, and no African countries participate. Another indication that the talks could potentially move forward is that the Structured Discussions on Trade and Environmental Sustainability (TESSD) consist of 53 WTO members working to advance environmental measures at the WTO, including environmental goods, ahead of the 12th Ministerial Conference (MC12) in November 202. Moreover, the success of the agreement within APEC shows that multilateral agreements on trade and environment can be concluded. In 2021, following Indonesia`s admission, 19 APEC members are fully complying with environmental goods regulations. The Director General of the APEC Secretariat hailed the APEC Environmental Goods List as “one of APEC`s most important achievements”.

With regard to the structuring of the negotiations, it was a question of whether a plurilateral or multilateral agreement would be the best approach. A plurilateral agreement would reduce the possibility of parasitism; it would be easier to reach and faster to close; and it would encourage others to join over time. The cost of a plurilateral agreement is that a smaller number of countries would participate; others may join slowly; And the overall impact on climate change mitigation would be lower, as there would be fewer participating Member States at the beginning. Therefore, a plurilateral approach would likely mean more limited progress on climate action than a multilateral agreement. The third round of EGA negotiations took place from 1 to 5 December 2014 and focused on products for wastewater management and water treatment, sanitation and environmental purification, as well as noise and vibration protection. Participants, including Canada, had the opportunity to present their product nominations in these three categories and learn from independent experts in these fields. The 14th round of negotiations took place in Geneva from 20 to 24 June 2016. Participants met both bilaterally and in small groups and intensified their negotiating efforts to agree on a final list of environmental goods. Encouraging progress was made during the week and participants agreed to convene the next round on 25 and 29 July. The European Union presented another approach to defining environmental goods, defining environmental goods in 2016 as follows: “Products that contribute directly to the protection of the environment and climate by helping to purify air and water, eliminate waste, contribute to energy efficiency, control air pollution and generate renewable energy”. An immediate challenge at the beginning of the negotiations was to define an environmental asset. To date, there is no uniform and generally accepted definition.

However, the Organisation for Economic Co-operation and Development`s (OECD) 1999 definition of environmental goods and services is widely regarded as the most comprehensive definition available. Therefore, environmental goods are those that “measure, prevent, limit, minimize or correct environmental damage to water, air and soil as well as problems related to waste, noise and ecosystems. This includes cleaner technologies, products and services that reduce environmental risks and minimize pollution and resource consumption. Another aggravating factor in the negotiations is the mandatory threshold of 80%. This requirement means that a critical mass of the world`s largest economies – and thus countries with some of the world`s most interconnected trade relations – must participate. In other words, China`s participation in the negotiations for a most-favoured-nation agreement is crucial. Without China, negotiating partners cannot reach a critical mass. Similarly, the European Union and the United States are also necessary participants, although the pursuit of a closed plurilateral system makes the need to reach this critical threshold superfluous. However, each country approaches the EGA negotiations from places of self-interest, taking into account domestic policy considerations that can be a major obstacle to flexibility in the negotiations, as the EU bicycle case makes clear. Despite the growing urgency to combat climate change and the recognition by WTO Member States that trade policy can play a key role in achieving positive environmental change, several outstanding issues complicate the resumption of negotiations on the OTT exemption agreement, including problems of definition, the reluctance of the Chinese to engage seriously, the lack of urgency on the part of the United States. and the limited scope of the negotiations of the exemption agreement under international law, all of which have been described above. First, there are still problems in defining environmental goods.

Parties to negotiations with major differences are unlikely to easily resolve these differences in new rounds of negotiations. For example, it`s hard to imagine a scenario in which China and the U.S. agree to abolish tariffs on solar panels, but a European deal that doesn`t cover solar panels would likely face credibility issues. An agreement to abolish normal tariffs, but where countries would still have the right to impose anti-dumping or countervailing duties in the event of unfair trade practices, would solve the problem from a trade policy point of view, but would make solar panels more expensive and thus prevent the growth of their installation. .

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