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Issues on Trade in Environmental Goods and Services
This paper attempts to conceptualise environmental goods and services in the context of negotiations under the auspices of the World Trade Organisation. It lists the items and examines the structure of trade for select countries including India. The analysis shows that while there is no agreement on an acceptable definition of environmental goods, a number of submissions on the list of items that could be categorised as such have been proposed, with an emphasis on greater reduction commitments under the WTO agreements. It is observed that a number of environmental goods that are of export interest to developing countries like India have been left out and at the same time a large number of other items that are not strictly in the realm of environmentally preferable goods are included. Hence, a decision at the WTO would have to be suitably negotiated such that there is a consensus on the conceptual parameters for environmental goods while giving member countries the leverage to decide on the list of environmentally preferred commodities, as per their domestic requirement and export interests.
ARCHANA S MATHUR, PRADEEP KR GUIN
O
Rapid industrialisation has led to an increased demand for natural and environmental resources in a globalised world. Liberalisation of markets in recent years has constrained developing countries as they lack the necessary technological capacity and institutional flexibility to respond to specifications of EGS. They are also forced to take decisive steps in protecting their requirements when trading in these goods. At the same time, there have been attempts to bring forth alternative submissions at various global fora, including the World Trade Organisation (WTO) to facilitate trade in these goods and the wider adoption of improved environmental practices. However, defining an environmental good or service is a complex problem.
This paper will attempt to conceptualise EGS and list the goods and services that may be categorised as such. It will also examine global trade in EGS and the set of EGS that India trades or is likely to trade. The tariffs on export interests to India, particularly environmental goods that are “natural” are compared with duties on “substitute” man-made items in developed countries. The paper also addresses the issue of identification of environmentally preferable goods and services eligible for special treatment in market access under WTO agreements.
Trade and Environment Issues at the WTO
In continuation of the importance given to trade and environmental issues in the General Agreement on Tariffs and Trade (GATT), a decision was taken to incorporate these concerns by the WTO. The WTO members recognised the need for moving towards sustainable development along with economic growth thereby raising the standard of living. While seeking to allow optimum use of world resources, the need to protect and preserve the environment, in a manner consistent with the concerns of various trading countries at different levels of economic development, was found necessary.
It was against this background that the Committee on Trade and Environment (CTE) was established as part of the WTO. The mandate aimed at identifying the relationship between trade measures and environmental measures so as to promote sustainable development and make suitable recommendations to ensure an open, equitable and non-discriminatory trading system. A similar decision on trade in services and environment was adopted to address the issue of sustainable development in specific areas.
Trade obligations in any of the multilateral environmental agreements (MEAs) have had a close means-to-end relationship with WTO obligations and issues pertaining to dispute settlement, in context of the agreement on the sanitary and phytosanitary (SPS) and the Agreement on Technical Barriers to Trade (TBT). Emphasis has been laid on greater cooperation and information exchange between the WTO, MEAs and United Nations Environment Programme (UNEP) by member countries.
At the 2001 Doha ministerial conference, issues regarding sustainable development, trade and environment were discussed
– especially the rights of member countries to adopt nondistorting trade measures towards protection of human, animal or plant life or health. An agreement was reached to clarify the relationship between the WTO rules and MEAs and examine specific trade obligations. However, a solution on conflicts within the MEAs could not be resolved and only the legal relationship between the WTO rules and MEAs were clarified. The Doha ministerial declaration agreed to negotiate “the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services”. This declaration was adopted with a view to enhance the mutual supportiveness of trade and environment without prejudicing their outcome.1 The effort to develop a common understanding of the mandate is under way. Specific trade obligations have not been identified and there is a continued effort to establish conformity of specific trade measures in the MEAs with WTO rules and to develop the principles and parameters to govern this relationship. It is in this context that a number of proposals have been submitted to form an acceptable list of EGS.
There have been attempts to introduce a common definition of EGS. Various suggestions have been made on what the criteria could be for identifying these goods. Most commonly, emphasis has been on an “end-use” or “predominant end-use” criterion that could be applied to equipment which have multiple uses. Other performance based criteria, such as energy efficiency and environmental-friendly goods have also been proposed.
Environment services are those provided by ecosystems such as carbon sequestration or activities that address specific environmental problems like waste water management, air, quality and climate, etc. Environmental goods, as defined by United Nations Conference on Trade and Development (UNCTAD) (2003), include equipment, material or technology used to address environmental problems or those products that are “environmentally preferable” to other similar products due to their relatively benign impact on environment.
Several lists of EGS have been submitted by the Organisation for Economic Cooperation and Development (OECD), Asia Pacific Economic Cooperation (APEC), apart from WTO member countries such as Japan, Korea, Kenya, Qatar and New Zealand. Unfortunately, the lists of EGS submitted by these organisations/ countries have not been able to fully represent the interests of most developing countries. It should be noted that no comprehensive and internationally acceptable definition on EGS exists so far. Since these definitions and classifications differ across countries there is a lack of a consistent view on this: for example, whether energy saving products, sound recorders, reproducers, etc, amongst others, can be categorised as environmental goods or whether the collection of household refuse and supply of drinking water are environmental services, etc [Chaytor nd].
One also needs to look into related problems and long-term gains that the trading countries would supposedly come across. Vikhlyaev (2004) observes that developing countries would have environmental benefits from access to EGS while developed countries would have trade gains from negotiations. Therefore, the issues that should be raised include: what is it that the WTO members intend to achieve with negotiations that would otherwise not be obtained without them, whether liberalisation of trade in environmental goods goes hand in hand with environmental services, how to balance market access with public services and how to ensure the commercial, technical and financial viability of the liberalisation efforts made by the WTO. Due to this, some member countries have favoured the “bottom-up” list based approach, compared to the “top-down” definitional approach while negotiating tariff reduction [Singh 2005].
Discussions at the WTO aiming to promote trade in EGS at reduced tariff rates are based on the argument that international trade in EGS will rebound to a “win-win” situation for economies. This would require greater reduction of tariffs on select environmental goods than other reduction commitments in the area of Non-Agricultural Goods Market Access (NAMA). At the same time, another set of natural commodities that could be included in the proposals for greater reduction, on the ground of being environmentally preferable goods of export interest to developing countries, would fall in the purview of the Agreement on Agriculture (AoA). Similar treatment would be required for such goods under the AoA as has been proposed for items under NAMA.
While it is a fact that the OECD countries have competitive advantage in the EGS sector, it is important that these negotiations also provide scope for economic development in developing countries [Chaytor nd]. Advocates in this area believe that the expansion of trade through liberalisation of EGS could help address acute environmental problems and resource inefficiency, particularly in developing countries, by stimulating economic growth, promoting environmental protection and achieving sustainable development. However, it is essential that governments act consensually and collaboratively to advance environmental standards and that no coercive measures are applied, particularly to developing countries.
Alternative Submissions on Environmental Goods and Services
As stated above, APEC and OECD had proposed a list of EGS that formed the basis for discussion of trade policy related to these goods. It would be useful to first look into the rationale for the APEC and OECD’s approach in the categorising select items as environmental goods. According to the committee on trade and environment special session negotiating group on market access [WTO 2003], the APEC list was formed with the intention to serve as the basis for tariff liberalisation or elimination among participating economies. As such, negotiators who drew up the APEC list faced a number of practical realities, viz, questions of customs administration, “dual use” issues, different national nomenclatures below the HS six-digit level and WTO legal issues. It was due to these reasons that some of the products that could otherwise have been worth including in the APEC list, had to be left out.
The OECD list, on the other hand, was prepared as part of an analytical exercise to define the conceptual scope of the sector. The analysts who developed the list were focused on drawing up a set of goods that could be considered as part of the environment industry and focused more on the particular industrial usages of these goods. In doing so, they paid little attention to
Economic and Political Weekly November 11, 2006
practical questions of how the goods that they were defining as “environmental” differ from identical or similar products used in other industries [WTO 2003].
The APEC list of environmental goods consists of 109 items that may be categorised under the following broad heads: air pollution control, water pollution control, solid waste management, remediation/clean-up of soil and water, noise/vibration abatement, monitoring, analysis and assessment, potable water treatment, recycling systems, renewable energy plant and heat and energy management.
The APEC list has been supported by New Zealand, Canada, the US, Australia and Singapore. It may be mentioned that the US is the world’s largest producer and consumer of pollution control equipment and services and is also the second largest net exporter of the same (after Germany and Japan). The US, together with Japan and the European Union makes up 85 per cent of the trade in this industry [TERI 2003]. Observations made by Bijit and Robert (2004) suggest that it is the developed countries that make up 79 per cent of export of the environmental goods, as per the APEC list, while developing and less developed countries contribute about 20 per cent and less than 1 per cent respectively. Further, 60 per cent of imports of environmental goods are by developed countries, 39 per cent by developing countries and rest by the less developed countries.
Another list proposed by the OECD includes chemicals used in pollution control as well as cleaner technologies. The proposed list of environmental goods by Japan covers a few energyefficient consumer products and Qatar stresses the technology behind the energy-efficient products [Vikhlyaev 2004]. While countries like Canada, Japan and the US have adopted the broad definitions of the environment industry, Italy, Germany and Norway have chosen the narrow ones. Although the list provided by the APEC and OECD are a good starting point, there is a need to propose an alternative set of items that would incorporate the interest of the developing countries more effectively.
The subcommittee on trade and environment drew Kenya’s definition [Otieno 2003] on EGS from the definition on services adopted by the OECD on EGS. Accordingly, these are those goods and services which measure, prevent, limit or correct environmental damage to water, air and soil as well as problems related to waste, noise and ecosystems and (may) include clean technologies, processes, products and services which reduce environmental risk and minimise pollution and material use depending on a country’s level of economic development. The subcommittee has proposed a list consisting of goods focused on recycled waste, water products, air pollution, soil, ecosystems and environmental services. UNCTAD has proposed the concept of “environmentally preferable products” (EPPs). It defines EPPs as products which cause significantly less environmental harm at some stage of their life cycle (production/processing, consumption, waste disposal) than alternative products that serve the same purpose, or products the production and sale of which contribute significantly to the preservation of the environment.
Environmental services have been classified into four major heads: environmental infrastructure services, air pollution control services, remediation services and support services. Services related to water and waste management, including engineering design of equipment for delivery and treatment of drinking water, are listed in environmental infrastructure services. Air pollution control services include engineering design, installation and operations management of pollution control and abatement equipment and systems at stationary and mobile pollution sources. Site clean up activities, emergency response to specific accidents and remediation assessment and design are included in remediation services. Support services include analytical services such as environmental laboratory testing or on-site analytical and monitoring services, legal and consulting services and auditing, research and development.
Broadly speaking, it may be suggested that these are goods and services, which tend to have relatively less (negative) impact on the environment, both at the production and consumption stage, and on the other substitute items which cause environmental degradation. Furthermore, the energy-saving equipment is also advocated to be included in the list of environmental goods. According to some experts, goods that are easily biodegradable, such as natural dyes, jute and coir products and other forest products should also find their way into the list of environmental goods.
In this background, it has been felt that India would have limited gains by negotiating the lists by APEC and OECD and as such there is a need to come up with a list that takes into view its trade interests. It is essential to primarily include items in the EGS list that are critical to clean technologies as also the environmental-friendly alternatives, renewable energy systems and products, clear biofuels, etc.
Trade of Environmental Goods
It is interesting to look at the trade of environmental goods (EG) based on the various proposals seen above. There has been an increase in supply of environmental services in developing countries that have export capacity. However, due to the paucity of detailed information on trade in environmental services and the problem of appropriate customs codes, the present study is restricted to trade of EG. The analysis here discusses 373 commodities at the six-digit HS classification and attempts to cover commodities under lists proposed by APEC, OECD and various WTO member countries. Of these, 171 commodities have been classified under different heads by UNCTAD [WTO 2000] based on a combined OECD and APEC list of EG. These goods have been broadly classified by UNCTAD into three categories namely, pollution management, which includes air pollution control, waste water and solid waste management, remediation, noise and vibration abatement and environmental monitoring, analysis and assessment; cleaner technologies and products into cleaner/resource efficient technologies, processes and products; and resource management group that includes indoor air pollution control, water supply, recycled materials, renewable energy plant, heat/energy saving management, sustainable agriculture and fisheries and forestry, natural risk management, ecotourism and others.
The remaining commodities, as per our broader list have been classified under cleaner technologies and products. Bamboos, rattans, vegetable material like ‘kapok’, vegetable hair, etc, and paper and paper products have been classified under cleaner/ resource efficient technology, process and products with plastic and products of plastics under solid waste management. It is relevant to state that although the energy efficient airconditioning machines, freezers, ovens, etc, have been classified under environmental goods, the fact that these equipments have multiple uses should not be overlooked. Similarly, microphones and loudspeakers that are not helpful in “abating” pollution have been included and placed under the “others” category for completion.
Figure 1: Percentage Share in Exports of EnvironmentalGoods in 2003 by Top 15 Countries
Belgium
3 per cent
JOthers 19 per cent Germany 13 per cent10 per centUS12 per centJapanItaly6 per centFrance5 per centChinaUK Mexico 5 per cent4 per centKorea Republic (South)4 per centCanada4 per centSingapore3 per centSweden2 per cent
Netherlands 3 per cent
4 per cent
Source:Based on Table 1.
At the same time certain commodities like silk, wool, cotton, organic soap, jute, rubber, etc, that have not been included, should be appropriately reflected in the list of EG.
Looking at the global trade in EG (Table 1) it can be seen that the total trade across countries is almost US $552 billion for the year 2003-04. The US, Germany and Japan have been major exporters of these items since 2001. Germany had market share of 11.3 per cent in 2001, and while the US has 14.5 per cent and Japan 12 per cent. Germany has since increased its market share and in 2003, its share of 13 per cent was the highest, followed by the US (12 per cent) and Japan (9.6 per cent) in global exports of EG (Figure 1). A number of developing countries are now exporting environmental goods, although their share in total global trade is quite small. Figure 1 shows the total amount of exports of EG and the share of each country.
It is interesting to look at the composition of environmental goods that have been exported over the last few years particularly by the top five exporting countries, viz, Germany, the US, Japan, Italy and France. Together, these countries constitute around 46 per cent of trade in environmental goods in the global market. The major shares of exports are from chapter 48 (paper and paperboard, etc), ch 84 (nuclear reactors, boilers, etc), ch 85 (electrical machinery and other accessories) and ch 90 (optical, photographic, cinematographic, medical or surgical instruments, etc). Looking further at the four-digit level (Figure 2 (a)) it may be observed that Germany had the maximum share in exports of commodities relating to 4,810, 4,802, 4,818 and 4,819. In 2003, it had a market share of around 15 per cent of export in paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances (4,810) and around 16 per cent in cartons, boxes, cases, bags and other packing containers, paper, paperboard, cellulose wadding (4,819). The US, France and Italy are the other important exporters of these commodities.
In chapter 84, it is observed that although the share of items belonging to the group, automatic data processing machines and units thereof (8,471) had the highest amount of trade in 2003, there was a decline of around 13 per cent from 2001. Unlike the other three commodities in chapter 84, trade participation in these (8,471) commodities is not concentrated to some countries but there is diversity, as may be seen Figure 2 (b). Japan, the US, Germany, Italy and France together have an export share of around 70 per cent in machines and mechanical appliances having individual functions and not specified elsewhere in this chapter, and around 64 per cent for parts suitable for use solely or principally with spark-ignition reciprocating or rotary internal combustion piston engines (8,407) or compression-ignition internal combustion piston engines, diesel or semi-diesel engines (8,408). In chapter 85, Japan (Figure 2 (c)) had an export share
Table 1: Exports of Environmental Goods by Country
| Country | Total | Share in World Trade | ||||
|---|---|---|---|---|---|---|
| (US$ million) | (Per Cent) | |||||
| 2001 | 2002 | 2003 | 2001 | 2002 | 2003 | |
| Germany | 62912.2 | 68332.2 | 72158.2 | 11.3 | 12.6 | 13.0 |
| US | 80926.7 | 71925.3 | 65955.8 | 14.5 | 13.3 | 11.9 |
| Japan | 66304.2 | 51443.6 | 52852.3 | 11.9 | 9.5 | 9.6 |
| Italy | 30448.8 | 30315.8 | 32297.4 | 5.5 | 5.6 | 5.8 |
| France | 28289.5 | 27459.2 | 29070.7 | 5.1 | 5.1 | 5.3 |
| China | 18225.8 | 20952.6 | 26762.9 | 3.3 | 3.9 | 4.8 |
| UK | 26089.9 | 25709.7 | 24637.5 | 4.7 | 4.8 | 4.5 |
| Korea Republic | ||||||
| (South) | 20626.4 | 18376.2 | 22247.1 | 3.7 | 3.4 | 4.0 |
| Mexico | 18909.7 | 19230.3 | 20923.4 | 3.4 | 3.6 | 3.8 |
| Canada | 22694.9 | 21647.2 | 20582.5 | 4.1 | 4.0 | 3.7 |
| Singapore | 19941.0 | 17379.8 | 17584.9 | 3.6 | 3.2 | 3.2 |
| Netherlands | 17594.9 | 16731.7 | 16465.8 | 3.2 | 3.1 | 3.0 |
| Spain | 13203.4 | 13055.0 | 14612.2 | 2.4 | 2.4 | 2.6 |
| Belgium | 14141.4 | 14038.1 | 14348.6 | 2.5 | 2.6 | 2.6 |
| Sweden | 12884.4 | 12506.2 | 13422.5 | 2.3 | 2.3 | 2.4 |
| Finland | 10862.6 | 10847.6 | 10787.7 | 1.9 | 2.0 | 2.0 |
| Malaysia | 9658.5 | 9429.1 | 9588.2 | 1.7 | 1.7 | 1.7 |
| Switzerland | 8584.9 | 8222.4 | 8477.0 | 1.5 | 1.5 | 1.5 |
| Austria | 7289.0 | 7649.1 | 8237.9 | 1.3 | 1.4 | 1.5 |
| Denmark | 6058.2 | 6680.4 | 7206.6 | 1.1 | 1.2 | 1.3 |
| Czech Republic 3496.4 | 4415.1 | 6055.0 | 0.6 | 0.8 | 1.1 | |
| Poland | 4055.4 | 4927.9 | 5653.1 | 0.7 | 0.9 | 1.0 |
| Turkey | 2283.9 | 3034.7 | 4176.0 | 0.4 | 0.6 | 0.8 |
| Ireland | 5600.6 | 5572.4 | 3906.5 | 1.0 | 1.0 | 0.7 |
| Hungary | 4249.5 | 3889.5 | 3794.0 | 0.8 | 0.7 | 0.7 |
| Brazil | 3557.8 | 3483.9 | 3489.5 | 0.6 | 0.6 | 0.6 |
| Indonesia | 3772.3 | 3505.6 | 3456.3 | 0.7 | 0.6 | 0.6 |
| Russia | 3126.1 | 3582.9 | 2881.2 | 0.6 | 0.7 | 0.5 |
| Philippines | 675.5 | 2869.5 | 2865.1 | 0.1 | 0.5 | 0.5 |
| Norway | 2293.4 | 2766.2 | 2468.5 | 0.4 | 0.5 | 0.4 |
| South Africa | 1927.0 | 2017.3 | 2097.3 | 0.3 | 0.4 | 0.4 |
| Slovenia | 1948.0 | 1854.8 | 2027.6 | 0.3 | 0.3 | 0.4 |
| Portugal | 1931.6 | 1808.8 | 2024.9 | 0.3 | 0.3 | 0.4 |
| Israel | 2022.8 | 2137.3 | 2011.6 | 0.4 | 0.4 | 0.4 |
| Australia | 1723.9 | 1697.5 | 1863.8 | 0.3 | 0.3 | 0.3 |
| Slovakia | 1141.5 | 1285.6 | 1455.4 | 0.2 | 0.2 | 0.3 |
| India | 1100.4 | 1180.1 | 1446.4 | 0.2 | 0.2 | 0.3 |
| Ukraine | 0.0 | 1099.9 | 1253.2 | 0.0 | 0.2 | 0.2 |
| Saudi Arabia | 655.6 | 904.1 | 971.2 | 0.1 | 0.2 | 0.2 |
| Hong Kong | 1523.3 | 1051.3 | 769.0 | 0.3 | 0.2 | 0.1 |
| Chile | 673.4 | 815.7 | 708.1 | 0.1 | 0.2 | 0.1 |
| Argentina | 749.3 | 875.1 | 703.9 | 0.1 | 0.2 | 0.1 |
| New Zealand | 611.6 | 670.9 | 692.1 | 0.1 | 0.1 | 0.1 |
| Luxembourg | 525.7 | 669.1 | 676.4 | 0.1 | 0.1 | 0.1 |
| Trinidad and | ||||||
| Tobago | 755.6 | 866.3 | 663.0 | 0.1 | 0.2 | 0.1 |
| Romania | 357.3 | 487.9 | 637.4 | 0.1 | 0.1 | 0.1 |
| Greece | 530.4 | 490.0 | 623.3 | 0.1 | 0.1 | 0.1 |
| Belarus | 506.0 | 540.9 | 605.4 | 0.1 | 0.1 | 0.1 |
| Croatia | 433.0 | 545.7 | 578.5 | 0.1 | 0.1 | 0.1 |
| Colombia | 402.0 | 569.4 | 494.6 | 0.1 | 0.1 | 0.1 |
| Others * | 6861.2 | 7092.3 | 2254.3 | 1.2 | 1.3 | 0.4 |
| Total | 555136.6 | 538639.0 | 551521.5 | 99.7 | 99.7 | 99.7 |
Note: * Includes trading countries such as Venezuela, Tunisia, Costa Rica, El Salvador, Thailand, Iran, Jordan, Gautemala, Morocco, Guinea, Sri Lanka, Peru, Zimbabwe, Ecuador, Uruguay, Kenya, Switzerland, Panama, Mauritius, Honduras, Bolivia, Nicaragua, Senegal, Barbados, Sudan, Algeria, Benin, Botswana and Tanzania.
Source: CMIE database.
Economic and Political Weekly November 11, 2006
Figure 2: Percentage Share in the Export of Top Four Environmental Goods at Four-Digit Globally, by the Top Five Countries
| (a) | (b) | ||
|---|---|---|---|
| 12 14 16 18 | 20 25 |
15
4810 4802 4818 4819
8471* 8479 8409 8414
Per Cent Per Cent
10 8
6 4
Per Cent Per Cent
10
52 0 0
(c) (d) 25
40 35
20 30
8528 8518 8543 8516
9032 9027 9031 9030
25 20
15
5
10 5
0 0
Notes: 4,810 – Paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances.
4,802 – Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, etc.
4,818 – Toilet paper and similar paper, cellulose wadding or webs of cellulose fibres, of a kind used for household or sanitary purposes, in rolls of a
width not exceeding 36 cm, or cut to size or shape, etc.
4,819 – Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or webs of cellulose fibres, etc.
8,471 – Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded
form and machines for processing such data, not elsewhere specified or included.
8,479 – Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter.
8,409 – Parts suitable for use solely or principally with the engines of heading 8,407 or 8,408.
8,414 – Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters.
8,525 – Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing
apparatus; video monitors and video projectors.
8,518 – Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not
combined with microphone, and sets consisting of a microphone and one or more loudspeakers, etc.
8,543 – Electrical machines and apparatus having individual functions, not specified or included elsewhere in this chapter.
8,516 – Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electro
thermic hairdressing apparatus, etc, other than those of heading 8,545.
9,032 – Automatic regulating or controlling instruments and apparatus.
9,027 – Instruments and apparatus for physical or chemical analysis, for measuring or checking viscosity, porosity, expansion, surface tension heat,
sound or light; micrometers.
9,031 – Measuring or checking instruments, appliances and machines not specified or included elsewhere in this chapter; profile projectors.
9,030 – Oscilloscopes, spectrum analysers and other instruments and apparatus for measuring or checking electrical quantities, excluding meters of
heading 9,028; instruments and apparatus for measuring or detecting alpha, beta, gamma, X-ray, cosmic or other ionising radiations.
* Computers are subject to additional duty under computers (additional duty) rules, 2004. Source:CMIE database.
of around 30 per cent in electrical machines and apparatus having reproducing apparatus; video monitors and video projectors individual functions not specified elsewhere (8,543). The US was categorised under 8,528. During the same period, India exported the market leader in chapter 90 with shares of around 35, 25 around 65 per cent of carpets and other floor coverings (5,702), and 20 per cent for commodities belonging to the class 9,030,2 17 per cent of commodities belonging to twine, cordage, ropes 9,0273 and 9,0324 respectively. and cables, etc (5,607) and 15 per cent of kind of vegetable
It is important to note that apart from these five countries, materials used primarily in brooms or brushes (1,403). Canada, Mexico and India played a crucial role in trade of certain Further, examination of the status of export of these commodicommodities in 2003. Canada exported slightly more than one-ties at the more disaggregated six-digit HS level, suggests that half of newsprint, in rolls or sheets to the world market (4,801), Germany has a share of 61 per cent in the global export market while Mexico had an export share of around one-quarter in for paper and paperboard of a kind used as a base for photoreception apparatus for television, whether or not incorporating sensitive, heat-sensitive or electro-sensitive paper or paperboard radio-broadcast receivers or sound or video recording or (4,80,220) in 2003. Similarly, the US captured around 85 per
Figure 3: Imports and Tariff Range of Environmental Goodsin India of Top Six Commodities at Two-Digit HS Level
50
45
40
35
30
25
20
15
10
5
0
37.9 35.7 37.4 33.4 26.9 22.9 20.1 18.1
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Per Cent
28 39 48 84 85 90 Others Average tariff on EG Source: Based on Table 3.
cent of the total export for kraft paper and paperboard, other than that of a kind used for writing, printing or other graphic purposes bleached uniformly (4,81,032) during the same period. Japan had a share of 68 per cent in the global export of duplicator stencils (4,81,630), while Canada had one-half of export share in newsprints, during 2003. Most countries have specialised in particular commodities and concentrated on trade accordingly.
It is important to note that most of the global trade in EG is concentrated in items that are not strictly in the realm of environmentally preferable products. Even the UNCTAD categorisation of environmental goods includes items that invariably have multiple uses. Items that are purely environment friendly comprise around 11 per cent of the entire list of 373 environmental goods and contributed to less than 5 per cent of global trade in 2003. The remaining set of environmental goods, it is suggested, may serve to ameliorate the environment only if used for the purpose.
At the same time, it is important that the development of “cleaner” technology is a relative concept that is subject to constant improvements. Hence, items of multiple use that are included under EG would need to have a dynamic definition to take into account evolving changes. However, since discussions at the WTO are time-sliced and based on the status at a specific historical date, it is difficult to unambiguously indicate a set of (multiple use) environmental products that can be considered “superior” to all member countries at different stages of development and income levels. It may be appropriate to arrive at a consensus on an environmentally preferable conceptual framework with the list of so-called environmental products and systems to the discretion of member countries.
Import and Tariffs of Environmental Goods in India
Import of environmental goods by India has increased substantially from around Rs 13 billion in 1999-2000 to Rs 273 billion in 2004-05. Looking at the pattern of import of environmental goods in India, it may be seen (Table 2) that a wide spectrum of goods spread across 27 categories at the two-digit HS level have been imported. Except for a fall in imports (in absolute terms) during 2000-01 there has been a steady increase in the amount of India’s import of environmental goods from 19992000 to 2004-05. It is relevant to state that not all commodities imported should strictly be categorised as environmental goods. In fact some do not emerge as being environment friendly.
The commodities that are imported primarily belong to sectors under inorganic chemicals (ch 28), plastic (ch 39) and paper products (ch 48), machinery including nuclear reactors, boilers (ch 84), electrical equipment (ch 85) and medical and surgical instruments (ch 90). Of this, most of the imports (at four-digit
Table 2: Import of Environmental Goods to India under Two-Digit HS Classification from 1999-2000 to 2004-05
(Rs Million)
| Chapter | 1999-2000 | 2000-01 | 2001-02 | 2002-03 | 2003-04 | 2004-05 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Imports | Share | Imports | Share | Imports | Share | Imports | Share | Imports | Share | Imports | Share | |
| Total | 12608.24 | 9849.91 | 11434.63 | 17235.37 | 226530.05 | 272528.25 | ||||||
| 14 | 12.90 | 0.10 | 0.87 | 0.01 | 0.45 | 0.00 | 4.77 | 0.03 | 64.95 | 0.03 | 70.48 | 0.03 |
| 22 | 0.15 | 0.00 | 0.26 | 0.00 | 3.07 | 0.03 | 4.45 | 0.03 | 0.97 | 0.00 | 244.36 | 0.09 |
| 23 | 0.10 | 0.00 | 0.00 | 0.00 | 1.01 | 0.01 | 3.69 | 0.02 | 13.31 | 0.01 | 0.29 | 0.00 |
| 25 | 103.25 | 0.82 | 102.17 | 1.04 | 89.22 | 0.78 | 92.27 | 0.54 | 1170.48 | 0.52 | 1389.88 | 0.51 |
| 28 | 879.58 | 6.98 | 1214.47 | 12.33 | 998.91 | 8.74 | 1096.88 | 6.36 | 12498.64 | 5.52 | 18439.65 | 6.77 |
| 29 | 84.70 | 0.67 | 129.01 | 1.31 | 256.80 | 2.25 | 281.03 | 1.63 | 4884.13 | 2.16 | 4207.75 | 1.54 |
| 32 | 12.36 | 0.10 | 16.05 | 0.16 | 25.13 | 0.22 | 30.08 | 0.17 | 464.04 | 0.20 | 1006.04 | 0.37 |
| 38 | 8.22 | 0.07 | 9.71 | 0.10 | 10.11 | 0.09 | 16.17 | 0.09 | 316.77 | 0.14 | 365.33 | 0.13 |
| 39 | 1903.89 | 15.10 | 653.02 | 6.63 | 1545.78 | 13.52 | 1949.09 | 11.31 | 25076.23 | 11.07 | 31142.23 | 11.43 |
| 46 | 0.00 | 0.00 | 0.84 | 0.01 | 0.44 | 0.00 | 0.13 | 0.00 | 4.95 | 0.00 | 13.22 | 0.00 |
| 48 | 1906.93 | 15.12 | 43.27 | 0.44 | 50.78 | 0.44 | 2126.24 | 12.34 | 22935.27 | 10.12 | 24356.15 | 8.94 |
| 56 | 21.83 | 0.17 | 6.43 | 0.07 | 22.82 | 0.20 | 30.23 | 0.18 | 441.90 | 0.20 | 462.33 | 0.17 |
| 57 | 0.42 | 0.00 | 0.13 | 0.00 | 0.11 | 0.00 | 2.06 | 0.01 | 19.55 | 0.01 | 33.61 | 0.01 |
| 58 | 1.36 | 0.01 | 0.73 | 0.01 | 0.39 | 0.00 | 1.55 | 0.01 | 2.95 | 0.00 | 4.72 | 0.00 |
| 59 | 27.66 | 0.22 | 30.90 | 0.31 | 37.89 | 0.33 | 43.99 | 0.26 | 474.34 | 0.21 | 593.93 | 0.22 |
| 63 | 137.77 | 1.09 | 32.24 | 0.33 | 70.66 | 0.62 | 200.96 | 1.17 | 4132.23 | 1.82 | 2585.50 | 0.95 |
| 68 | 0.07 | 0.00 | 0.74 | 0.01 | 1.24 | 0.01 | 0.24 | 0.00 | 2.63 | 0.00 | 15.62 | 0.01 |
| 69 | 141.12 | 1.12 | 154.39 | 1.57 | 160.23 | 1.40 | 200.30 | 1.16 | 2597.77 | 1.15 | 4281.07 | 1.57 |
| 70 | 35.33 | 0.28 | 38.77 | 0.39 | 39.26 | 0.34 | 47.28 | 0.27 | 819.61 | 0.36 | 851.12 | 0.31 |
| 73 | 20.09 | 0.16 | 23.98 | 0.24 | 37.14 | 0.32 | 50.39 | 0.29 | 692.62 | 0.31 | 697.03 | 0.26 |
| 78 | 0.93 | 0.01 | 4.55 | 0.05 | 1.24 | 0.01 | 2.74 | 0.02 | 45.95 | 0.02 | 67.80 | 0.02 |
| 84 | 4519.52 | 35.85 | 4623.92 | 46.94 | 4986.70 | 43.61 | 6462.32 | 37.49 | 78137.84 | 34.49 | 101655.86 | 37.30 |
| 85 | 694.91 | 5.51 | 640.57 | 6.50 | 607.51 | 5.31 | 1199.46 | 6.96 | 16293.26 | 7.19 | 22256.49 | 8.17 |
| 87 | 38.44 | 0.30 | 40.66 | 0.41 | 40.87 | 0.36 | 69.54 | 0.40 | 590.16 | 0.26 | 750.18 | 0.28 |
| 89 | 10.24 | 0.08 | 59.20 | 0.60 | 3.28 | 0.03 | 3.81 | 0.02 | 17365.59 | 7.67 | 9407.27 | 3.45 |
| 90 | 2037.53 | 16.16 | 2015.75 | 20.46 | 2435.44 | 21.30 | 3305.23 | 19.18 | 37365.71 | 16.49 | 47481.07 | 17.42 |
| 96 | 8.94 | 0.07 | 7.27 | 0.07 | 8.15 | 0.07 | 10.47 | 0.06 | 118.16 | 0.05 | 149.27 | 0.05 |
| Source: DGCI&S database. | ||||||||||||
| 4680 | Economic and Political Weekly | November 11, 2006 |
level) in 2004-05 comprised 6 per cent of goods under 8,471, 4,802, 2,814 and 8,479; 5 per cent of 8,414; around 4 per cent of 9,027, 3,901 and 9,031 and around 3 per cent of 8,481 and 8,409. These aggregated to 47 per cent of total imports. Other commodities such as ammonia, anhydrous or in aqueous solution (2,814) and air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods (8,414) also had a high import share in 2004-05 compared to the previous year.
Looking at the six-digit level for further details, we see that the commodities imported most were storage units (8,47,170) covering floppy and hard disc drives, CD-ROM drives, etc, and other units of automatic data processing machines (6.5 per cent). Although these commodities were traded the most, there has been a fall in its share of total imports over the years. This may be attributed to the development of a domestic information technology industry in India. Commodities belonging to the class of newsprints, in rolls or sheets (4,80,100) and anhydrous ammonia (2,81,410) also had an import share of around 6 per cent during 2004-05. Tankers of cargo ships (8,90,120), had the highest import share (around 8 per cent) in 2003-04, although it fell to 3 per cent in 2004-05.
The trend in imports and tariffs in some of the major traded EG indicates that there has been a marked decline in the average tariff rates of EG between 1999-2000 and 2004-05 (Table 3). While the overall tariff for these EG during 1999-2000 was around 38 per cent, it fell to 20.3 per cent during 2005-06 and further to 18 per cent in 2006-07 (Figure 3). This is related to a part of the reforms process when overall total tariff for all commodities were reduced from 39.3 per cent in 1999-2000 to 16.5 per cent during the 2006-07. At the same time, import of EG increased by 85 per cent during the period 1999-2000 to 2004-05. For the set of commodities imported most, as listed in Table 3 and a large number of others, we see that the upper limit of the basic tariff range during 2004-05 is 20 per cent, which is much below tariff ranges that prevailed in previous years. Except for commodities that belong to chapter 48, import of these goods saw a marginal rise in 2004-05 compared to previous year. However, it is important to mention that some of the items have multiple uses and may not be only for improvement of the environment.
Table 4 shows the comparative tariff structure of EGS in the US, Japan, South Korea, Singapore, the EU, Canada and India. Singapore being a trading hub has almost zero duty for most of the commodities. It may be observed (Table 4) that out of the 25 listed commodity groups (two-digit HS level), most of the major trading economies have tariffs ranging well beyond the average applied customs tariff rates for all commodities. Eighteen of the 25 commodity groups in Canada, 16 in EU and15 in Japan and the US have tariff rates that are higher than the average rates.
The average tariff for all commodities in developed countries is usually found to be less than the duty being applied on commodities belonging to the EGS category. Apart from other commodities, those belonging to the category of nuclear reactors, electrical and mechanical appliances, and optical instruments that are traded most, attract tariffs more than the average duty applied. For example, the US, the EU and Canada imposes tariffs up to 5.6, 4.5 and 9.5 per cent on items in the class of nuclear reactors, boilers, etc, respectively, compared to their average tariffs on all commodities at 3.4 per cent for the US, 4.2 per cent for the EU and
4.1 per cent for Canada. Similar is the case for electrical machinery and also optical photographic medical and other apparatus under chapter 80 that have high import duties in these countries. It may thus be seen that top exporting countries like Germany, the US and Japan promote the export of nuclear reactors, boilers, select machinery and mechanical appliances, automobiles, electrical equipments on the ground that they are energy efficient.
Export of Environmental Goods from India
Unlike the large import of EG in India, the export of EG has been quite limited, as may be seen in Table 5. There has been some increase in the export of these goods from Rs 3.3 billion
Table 4: Tariff Range of Different Countries for the Environmental Goods at Two-Digit HS Level
Chapter India US EU Japan Canada S Korea Singapore 2005-06 2005 2005 2005 2004 2005 2005
14 30.0 0-3.8 0 0-10.0 0 8 0 22 30-150.0 0.2-18.9 9.6 0-32.0 12.28 8-270.0 0 25 15.0 00-1.7 0 0 3.0 0 28 5-15.0 0-4.7 0-5.5 3-6.6 0-5.5 2-8.0 0 29 15.0 2.8 5.5 0 5.5 3.0 0 32 15.0 5.1-5.9 6.5 4.8 6.5 6.5-8.0 0 38 15.0 4.8 3.2 2.9 0 6.5 0 39 15.0 2-6.5 6.5 0-6.0 0-6.5 6.5-8.0 0 46 15.0 0-8.0 2.2-3.7 3.9-4.6 0-3.0 8.0 0 48 15.0 0 00-9.6 0 00 56 15.0 0-14.1 4.3-8.0 0-9.1 0-14.0 8-10.0 0 57 15.0 0 3.5-8.0 5.2-9.6 0-12.5 10.0 0 58 15.0 2.7-3.2 8.0 4.2-8.0 0-12.0 13.0 0 59 15.0 3.8 6.0 4.2-5.8 0-12.0 8.0 0 63 15.00-5.5 0 0 0 8.0 0 69 15.0 0-2.7 2-5.0 0-5.2 0-4.5 3-8.0 0 70 15.0 0-6.7 3-7.0 0 0-15.5 8.0 0 73 15.0 0 1.7-2.7 0-3.9 0-6.5 8.0 0 78 10.0 3.0 0-5.0 4.6 3.0 8.0 0 84 0-15.0 0-5.6 0-4.5 0 0-9.5 0-8.0 0 85 0-15.0 0-8.5 0-14.0 0 0-8.0 0-8.0 0 87 15.3-100.0 0-2.5 3-10.0 0 0-6.1 8.0 0 89 15.0 0 0-2.7 0 0-25.0 0-5.0 0 90 0-15.0 0-6.6 0-4.7 0 0-6.5 0-8.0 0 96 15.0 0-32.0 2.7-3.7 0-8 0-15.5 8.0 0 Average for
all 18.3 3.4 4.2 3.2 4.1 11.2
Source:Table compiled from official websites of individual countries.
Table 3: Import Share and Respective Tariff Range of Environmental Goods in India of Top Six Commodities at Two-Digit HS Level
Chapter 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 Import Basic Tariff Import Basic Tariff Import Basic Tariff Import Basic Tariff Import Basic Tariff Import Basic Tariff Share Range Share Range Share Range Share Range Share Range Share Range
Notes:* Average tariffs on EG for 2005-06 and 2006-07 are 20.1 and 18.1 respectively. Figures in brackets represent their position. Source: DGCI&S database.
Economic and Political Weekly November 11, 2006 in 1999-2000 to Rs 158 billion in 2004-05. Until 2002-03, the top three set of commodities exported from India included paper and paperboards, etc (part of ch 48), nuclear reactors, boilers, machinery, etc (ch 84) and electrical machinery and equipment, etc (ch 85). Exports in 2003-04 saw a slight change with plastic goods and articles also finding an important export market.
The top 10 commodities at the four-digit level that were exported by India during 2004-05 included 3,902 (13 per cent), 3,901 (12 per cent), 8,409 (around 8 per cent), 8,479 (around 6 per cent), 8,481 (around 5 per cent), 8,419 and 3,903 (around 3 per cent) and 8,541, 8,414 and 3,926 (around 2 per cent). Information at six-digit HS level shows that polypropylene and other polymers of propylene or of other olefins, in primary form, were exported the most, followed by valves, inlet and exhausts, pistons, piston rings and assemblies, fuel nozzles, fuel injecting equipments excluding injection pumps and other parts of diesel engines. Items of export interest to India under chapters 14, 22, 23, 29 and others, have met with limited global demand and in fact face tariff as well as non-tariff barriers. Apart from these commodities there are several other organic goods such as natural dyes, soaps and other surface active agents, casein glues, gum, wood tar, resin acids and natural products like rubber, cork, silk, wool and cotton, etc, that need to be included in this list of EG.
However, if we look at the tariff structure of these commodities of developed countries5 vis-à-vis their man-made substitutes, it is found that the former set of goods have higher duty than the latter for a large set of commodities. This particularly holds for items like wood and articles of wood (ch 44); cork (ch 45); straw, basketware and wickerwork (ch 45); apart from textile and textile articles like silk, wool, cotton and other vegetable textile fibres (ch 50-53); special yarns, twine, cordage, ropes and cables, floor coverings, special woven fabrics; tufted textile fabrics; lace, tapestries; trimmings; embroidery (ch 56-58).
For a number of other items of export interest to developing countries such as gum, wood tar, resin acids, etc, the duties in the developed countries are similar to their man-made counterparts but higher than their overall average duties. For instance, the US, EU and Japan imposes a duty of up to 3.1, 6.5 and 3 per cent on natural dyes compared to 5.9, 6.5 and 4.8 per cent on chemical dyes respectively in 2005. The average duties in these countries were 3.4 in the US, 4.2 in EU and 3.2 in Japan. Further, it may be noted that environment friendly commodities, viz, bamboos, rattans, brooms, paper made products, etc, attract high tariff rates in some of the developed countries. The average duty imposed on items belonging to chapter 14 (vegetable plaiting materials, etc), in the US, EU, Japan and others is higher than the average tariff on all commodities. The US imposes a tariff of up to 8 per cent on the commodities made of vegetable plaiting materials and goods manufactured from straw, viz, mats, basketware and wickerwork, which is considerably higher than the average tariff rate, while Japan, in the same class, maintains a tariff of around 5 per cent. In South Korea, commodities of water, natural or artificial and undenatured or denatured ethyl alcohol attracted tariffs as high as 270 per cent.
Commodities belonging to chapter 56 (wadding, felt and nonwovens, special yarns, etc), chapter 57 (carpet and other textile floor coverings) and chapter 58 (special woven fabrics, tufted textile fabrics, etc), also attracted tariffs higher than the average tariffs on all commodities. While the EU imposed tariffs of around 8 per cent in the class of commodities belonging to wadding, felt and non-wovens, special yarns, etc, some commodities in the same group attracted tariffs up to 14 per cent in the US and Canada and 9 per cent in Japan. India on the other hand has very few commodity groups (primarily in ch 22 and 87) where the
Table 5: Export of Environmental Goods from India under Two-Digit HS Classification from 1999-2000 to 2004-05
(Rs million)
| 1999-2000 | 2000-01 | 2001-02 | 2002-03 | 2003-04 | 2004-05 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Chapter | Total | Share | Total | Share | Total | Share | Total | Share | Total | Share | Total | Share |
| Total | 3251.73 | 5020.76 | 5622.03 | 6990.75 | 115605.49 | 158061.88 | ||||||
| 14 | 14.89 | 0.46 | 15.72 | 0.31 | 12.83 | 0.23 | 18.20 | 0.26 | 131.52 | 0.11 | 171.86 | 0.11 |
| 22 | 0.33 | 0.01 | 0.50 | 0.01 | 1.53 | 0.03 | 7.94 | 0.11 | 32.92 | 0.03 | 59.93 | 0.04 |
| 23 | 0.20 | 0.01 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 10.60 | 0.01 | 34.46 | 0.02 |
| 25 | 24.35 | 0.75 | 10.23 | 0.20 | 12.02 | 0.21 | 11.86 | 0.17 | 162.67 | 0.14 | 213.96 | 0.14 |
| 28 | 107.63 | 3.31 | 172.73 | 3.44 | 192.63 | 3.43 | 198.27 | 2.84 | 1453.83 | 1.26 | 1695.97 | 1.07 |
| 29 | 1.78 | 0.05 | 1.37 | 0.03 | 1.34 | 0.02 | 0.58 | 0.01 | 29.82 | 0.03 | 46.04 | 0.03 |
| 32 | 9.53 | 0.29 | 18.36 | 0.37 | 18.36 | 0.33 | 26.18 | 0.37 | 314.90 | 0.27 | 245.62 | 0.16 |
| 38 | 5.11 | 0.16 | 7.49 | 0.15 | 12.92 | 0.23 | 25.65 | 0.37 | 272.25 | 0.24 | 369.02 | 0.23 |
| 39 | 274.13 | 8.43 | 336.60 | 6.70 | 386.69 | 6.88 | 404.39 | 5.78 | 31632.74 | 27.36 | 49445.83 | 31.28 |
| 46 | 4.36 | 0.13 | 4.29 | 0.09 | 6.63 | 0.12 | 15.92 | 0.23 | 93.40 | 0.08 | 88.49 | 0.06 |
| 48 | 475.82 | 14.63 | 829.39 | 16.52 | 932.95 | 16.59 | 1209.34 | 17.30 | 7966.60 | 6.89 | 9270.62 | 5.87 |
| 56 | 7.41 | 0.23 | 17.09 | 0.34 | 26.42 | 0.47 | 32.09 | 0.46 | 479.81 | 0.42 | 360.42 | 0.23 |
| 57 | 196.64 | 6.05 | 215.72 | 4.30 | 240.08 | 4.27 | 297.34 | 4.25 | 3534.99 | 3.06 | 4990.97 | 3.16 |
| 58 | 0.28 | 0.01 | 0.55 | 0.01 | 0.29 | 0.01 | 0.34 | 0.00 | 8.77 | 0.01 | 47.30 | 0.03 |
| 59 | 3.38 | 0.10 | 2.92 | 0.06 | 3.10 | 0.06 | 2.66 | 0.04 | 37.19 | 0.03 | 85.01 | 0.05 |
| 63 | 3.00 | 0.09 | 26.27 | 0.52 | 24.04 | 0.43 | 34.99 | 0.50 | 542.00 | 0.47 | 592.89 | 0.38 |
| 68 | 0.15 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 87.91 | 0.08 | 18.54 | 0.01 |
| 69 | 56.13 | 1.73 | 83.42 | 1.66 | 84.70 | 1.51 | 126.26 | 1.81 | 1785.64 | 1.54 | 1575.03 | 1.00 |
| 70 | 120.70 | 3.71 | 138.01 | 2.75 | 90.42 | 1.61 | 129.46 | 1.85 | 1721.45 | 1.49 | 1990.95 | 1.26 |
| 73 | 82.08 | 2.52 | 173.46 | 3.45 | 178.94 | 3.18 | 262.11 | 3.75 | 2891.35 | 2.50 | 3579.85 | 2.26 |
| 78 | 1.83 | 0.06 | 3.52 | 0.07 | 3.48 | 0.06 | 2.56 | 0.04 | 45.97 | 0.04 | 36.58 | 0.02 |
| 84 | 1278.19 | 39.31 | 1968.98 | 39.22 | 2329.04 | 41.43 | 2740.90 | 39.21 | 37869.09 | 32.76 | 49054.38 | 31.03 |
| 85 | 317.26 | 9.76 | 552.91 | 11.01 | 570.44 | 10.15 | 818.02 | 11.70 | 10464.15 | 9.05 | 11633.40 | 7.36 |
| 87 | 20.04 | 0.62 | 97.67 | 1.95 | 100.39 | 1.79 | 126.12 | 1.80 | 7486.25 | 6.48 | 12908.48 | 8.17 |
| 89 | 0.76 | 0.02 | 2.56 | 0.05 | 0.52 | 0.01 | 0.68 | 0.01 | 14.47 | 0.01 | 23.91 | 0.02 |
| 90 | 242.13 | 7.45 | 330.20 | 6.58 | 381.87 | 6.79 | 486.47 | 6.96 | 6405.38 | 5.54 | 9428.64 | 5.97 |
| 96 | 3.63 | 0.11 | 10.78 | 0.21 | 10.40 | 0.18 | 12.44 | 0.18 | 129.85 | 0.11 | 93.73 | 0.06 |
| Source: DGCI&S database. | ||||||||||||
| 4682 | Economic and Political Weekly | November 11, 2006 |
tariff range is more than the average tariff rate of 18.3 per cent. Apart from these, other organic items for which duties are considerably higher than overall average include soap, organic surface-active products and preparations for use as soap, casein, etc. It is important that such items of export interest to developing countries are given special treatment in tariff negotiations.
Conclusion
From the above analysis it can be seen that with increasing realisation of environmental concerns, there has been a considerable rise in the trade of EG, although agreement on a universally acceptable definition of EG is still in the process of being arrived at. This has implications for global trade and tariff policy pertaining to these goods.
Most of the commodities that appear in the APEC and OECD lists are also the most traded, although having multiple-end uses. Imports of these goods into India have also increased manifold. Further emphasis on the liberalisation of trade in such goods needs to be carefully considered since a large number of items, though technologically superior may have limited impact on improvement in the environment as such. Moreover, technological development is an evolving process and items categorised as EG may require appropriate revision from time to time. With the timesliced decisions at the WTO, there may be a need to arrive at a consensus on the conceptual parameters for EG while giving member countries the leverage to decide on the exact list of environmentally preferred commodities, as per their domestic requirements and export interests.
It has been felt that some economies that are greater contributors to global pollution and are reluctant participants to the Kyoto protocol need to take a more proactive steps. At the same time, trade of environment-friendly products such as renewable energy systems and products, biofuels recyclable products, organic chemicals, dyes, biodegradable products from natural fibres like jute, coir, sisal and bamboos, etc, that are available in abundance in developing countries, also need greater focus. Reducing tariff and non-tariff barriers to trade affecting some of these products is of key importance.
It is essential that CTE discussions at the WTO give due cognisance to the interests of developing countries like India. The objective of these negotiations is to promote trade and reduce or eliminate tariffs on EGS. This requires a mutually acceptable carve out of the total set of goods under the NAMA that would be subject to greater reduction commitments. Since a number of EG that are of interest to developing counties fall within the purview of the AoA, similar treatment would be required for such goods included in the latter agreement. The sixth WTO ministerial conference held in Hong Kong in December 2005 looked at different approaches to enhance synergies and mutual support for trade and environment keeping in view the interest of developing countries to help shape a final agreement on trade in EGS. There is a continued need for promoting avenues for information exchange amongst member countries in consultation with UNEP and other international bodies.
Developed countries need to take the lead by reducing trade barriers. Developing countries would require special and differential treatment to address their concerns. This is particularly relevant while considering items of export interest that continue to face higher duties than substitute man-made goods. At the same time, it is relevant to mention that making these negotiations operational could in itself be difficult, as countries will have to cope with problems associated with the establishment of conforming systems to be used at customs, their administrative costs, apart from identification of EG amongst similar products traded. Hence an appropriate funding mechanism may need to be developed for promoting trade of EG.
l:iEmail: archana.mathur@nic.in
Notes
[The views expressed are those of the authors and not necessarily those of the Planning Commission or the government of India. The authors are extremely grateful to Pronab Sen, principal adviser (Perspective Planning Division), Planning Commission for his very useful suggestions and encouragement in bringing out this paper. Assistance in compilation and analysis of data by Shyamla and Jyoti is also acknowledged.]
1 Doha ministerial declaration, paragraph 31 (iii).
2 Oscilloscopes, spectrum analysers and other instruments and apparatus for measuring or checking electrical quantities; detecting alpha, beta, gamma, X-ray, cosmic or other ionising radiations.
3 Instruments or physical or chemical analysis viscosity, porosity, surface
tension, quantities of heat, sound or light, etc. 4 Automatic regulating or controlling instruments and apparatus. 5 Countries included here are the US, EU, Japan and Canada.
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