APEC Continuing Environmental Goods Tariff Reductions Push

August 25, 2014 Posted by ASEAN Briefing Reading Time: 3 minutes

Members of the Asia-Pacific Economic Cooperation (APEC) moved closer towards realizing their commitment towards free trade in environmental goods, after recent meetings this month.

Since 2012, APEC members have been working to reduce all import tariffs on an agreed list of 54 environmental goods to five percent or below by 2015. During the 3^rd Senior Officials’ meeting in Beijing earlier this month, discussion focused on building the technical capacity among member economies in preparation for the approaching deadline.

“Implementation requirements between economies vary in nature and scope,” said John Larkin, Chair of the APEC Committee on Trade and Investment. “We are stepping up our technical discussions to enhance transparency and consistency in how member economies implement the commitments in their tariff schedules.”

The global momentum for free trade in environmental goods is gaining traction. In January, 14 World Trade Organization members, accounting for 86 percent of global trade in green goods, launched negotiations on an Environmental Goods Agreement to eliminate tariffs worldwide on these products.

Nevertheless, there remains some distance before trade liberalization can be reached. Although global trade in green goods clocks in almost US$1 trillion annually, tariffs in some areas continue to be as high as 35 percent, slowing down the spread of environmental technologies.

Non-tariff barriers, such as inconsistent intellectual property standards and strict technical regulations, are also challenges to free trade.

For the solar industry, trade remedies, which are retaliatory duties that countries impose on trade partners to counter supposedly unfair subsidies or policies, are also a problem. Last month, the U.S. announced anti-dumping duties on Chinese solar products and China is reportedly planning to temporarily ban import of solar-grade polysilicon in response.

These challenges aside, the action is happening in the right place, as APEC is home to many of the global leaders in environmental goods, including 12 of the top 30 global exporters.

With climate change constantly on the horizon, the market in green goods and services will only become increasingly important. By 2020, it is expected to double in size to US$2 trillion, according to Environmental Business International.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com.

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