CIAO DATE: 04/03

Trade Preferences and Environmental Goods

Abstract

For the World Trade Organization (WTO), the most important development in a decade related to trade-environment linkages is the agreement to liberalize commerce in environmental goods and services. If properly executed, the agreement will increase the availability of “green” goods in global markets and break the North-South deadlock that has paralyzed discussions on the trade regime governing such goods.

However, WTO members appear to be limiting negotiations to capital-intensive environmental technologies and engineering services, for which developed countries enjoy a comparative advantage. These goods account for the largest part of the US$525 billion spent annually on the environmental sector world-wide. However, they are neither the sole nor most visible part of environmental markets. Green consumer goods—from energy-efficient lighting to recycled products—together with resource-based products, including organic produce and sustainable forest and fisheries products, need to come within the purview of WTO negotiations.

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