Source: Carnegie

Trade Preferences and Environmental Goods

Trade, Equity, and Development Series
Issue no. 5

Scott Vaughan

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Summary
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 discussion 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 $525 billion spent annually on the environmental sector worldwide. 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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Scott Vaughan is visiting scholar with the Carnegie Endowment. He previously held positions with the North American Commission for Environmental Cooperation, the World Trade Organization, the United Nations Environment Program, the Royal Bank Financial Group (Canada), and the Canadian federal minister of the environment.

The Trade, Equity, and Development (TED) Series is part of an effort by Carnegie's Trade, Equity, and Development Project to broaden the debate surrounding trade liberalization to include perspectives not normally present in the Washington policy community.

Also in the TED series:
Controlling Corruption: A Key to Development-Oriented Trade, Peter Eigen
Environment's New Role in U.S. Trade Policy, John Audley
Reforming Global Trade in Agriculture: A Developing-Country Perspective, Shishir Priyadarshi
Doha: Is It Really a Development Round?, Kamal Malhotra