Issues and Considerations for Negotiating a Sustainable Energy Trade Agreement1 This sheet is a Q&A based summary of the issues paper ‘Issues and Considerations for Negotiating a Sustainable Energy Trade Agreement (2012) by Gary Hufbauer and Jisun Kim, produced by ICTSD in collaboration with the Peterson Institute for International Economics and the Global Green Growth Institute. The paper finds that the key issues to be addressed by a Sustainable Energy Trade Agreement (SETA) are: the type of products to which the agreement would apply, the identification of the key players that have a stake in participating in SETA, the list of non-tariff barriers to be included in the agreement and the institutional framework in which the SETA would be negotiated. How Many Environmental Goods Could be Contained in a SETA? There is no internationally agreed definition of an environmental good. The proposed list for a SETA could begin with a short list that would then serve as a launching pad for negotiations. It would initially comprise of the 32 environmental goods listed under the category “renewable energy” in the WTO compilation of environmental goods proposed by Members, as well as the six environmental goods categorized under “renewable energy” and “environmental technologies.” The list would also include ethanol (widely used for fuel). Which are the ‘Core’ and ‘Candidate’ Countries for a SETA? NAFTA, EU, Chile, Colombia, Peru, Australia, New-Zealand, Singapore, Japan and Korea have been identified as core countries highly likely to join SETA negotiations because of their interest in opening markets in sustainable energy goods and services. Six candidate countries – China, Brazil, India, Turkey, Indonesia and South-Africa – hold great commercial and environmental interest for the core countries. Should Tariff Barriers be Addressed First? Although tariffs do not represent the highest barrier to trade in environmental goods, they have to be eliminated first and are most likely to be addressed first in negotiations. The advantage to this is that as many tariffs are already low, the negotiations are likely to be relatively free of contention. However, the disadvantage is that the gains in increased trade from eliminating residual tariffs are limited.
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Hufbauer, Gary; Jisun Kim; (2012); Issues and Considerations for Negotiating a Sustainable Energy Trade Agreement; ICTSD Global Platform on Climate Change, Trade and Sustainable Energy; International Centre for Trade and Sustainable Development, Geneva, Switzerland. The full paper is accessible at: http://ictsd.org/i/publications/133314/.