Sustainable Development and Liberalization of Trade in Environmental Goods: An analysis of the APEC and WTO initiatives

Abstract

The Asia-Pacific Economic Cooperation (APEC) and members of the World TradeOrganization (WTO) have recently launched initiatives for reducing trade barriers onenvironmental goods. The initiatives are claimed by their participants to contribute positively to sustainable development (European Commission 2014, APEC 2012). The aim of this study is to investigate this claim by looking closer at the design of the two initiatives. First, the study defines ten criteria for how an environmental goods trade initiative could be designed to best contribute to sustainable development. Then, it evaluates whether the APEC and WTO initiatives are in compliance with the identified criteria. The data necessary to define the criteria was collected through semi-structured interviews with experts from the International Centre for Trade and Sustainable Development (ICTSD), the United Nations Environmental Programme (UNEP) and the United Nations Conference on Trade and Development(UNCTAD).The results of the analysis show that the initiatives have great room for improvementwhen it comes to both structure and product coverage. Substantial sustainable development gains can for instance be made by deepening the liberalization to include non-tariff barriers,including provisions that enhance technology transfer, and by broadening the product coverage, particularly by including more products in the sustainable energy category. Despite of their shortcomings, the initiatives should be welcomed as positive first steps to achieve free trade in environmental goods.