APEC Moves On Cuts To Environmental Goods Tariffs

by Mary Swire, Tax-News.com, Hong Kong

18 May 2015

Senior trade officials from the 21 Asia-Pacific Economic Cooperation (APEC) member economies have been ramping up efforts to meet their commitment to cut tariffs on environmental goods by the end of this year, according to the organization's Committee on Trade and Investment.

Prior to a meeting of APEC Trade Ministers on May 23-24, APEC officials met in Boracay to brief each other on their progress on reducing tariffs on a list of 54 environmental goods, such as waste-water purifying equipment, solar panels, and wind turbines. The list of goods was agreed by all APEC members in 2012, when a three-year deadline was set.

While global trade in so-called "green goods" totals nearly USD1 trillion annually, some countries have applied tariffs as high as 35 percent. In Boracay, APEC officials were working out technical issues to reduce import tariffs to five percent or less.

It was stated that the commitment represents "the first multilateral tariff-cutting arrangement in 18 years. Its completion would help to lower the cost of goods on the APEC list, improving access to them as markets grapple with the effects of development, demand for stronger environmental protection rises, and new targets in areas like carbon emissions and renewable energy are considered."

It could also facilitate tariff-lowering negotiations on environmental goods that began under the auspices of the World Trade Organization (WTO) in January last year. Building on APEC's work, a group of WTO members also pledged to launch negotiations on an Environmental Goods Agreement to liberalize trade in green goods.

"Officials are putting forward their plans for implementing tariff reductions on the APEC list of environmental goods," said John Larkin, Chair of the Committee on Trade and Investment. "Having a clear and consistent interpretation of the commitments in the APEC list and how tariff cuts will be put into effect is key to the success of the initiative."

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