US, China, EU and others fail to reach environmental goods deal

Forty-six countries including the US, China and European Union nations failed on Sunday to agree on a list of “environmental goods” like solar-powered air conditioners or LED light bulbs that could see lower tariffs.

The two-day meeting at the World Trade Organisation involved a bid to agree on reducing tariffs on over 200 environment-friendly goods worth around US$1 trillion in trade annually, part of a process that EU trade commissioner Cecilia Malmstrom called important “to show that trade and the environment can go hand in hand”.

She and other officials said China’s presentation of a late list of goods to include threw a wrench into the weekend negotiations.

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The talks amounted to just a step in a broader process on the Environmental Goods Agreement that was already facing uncertainty about how the incoming administration of US president-elect Donald Trump will approach it.

“In the last seconds, China proposed a list that was not studied enough,” Turkish Economy Minister Nihat Zeybekci said on Sunday. “Many countries, they have concerns about the list.”

Zeybekci cited other concerns about sustainable-development lumber between Canada and New Zealand on one side and Japan and Taiwan on another.

The United States and the European Union, who chaired the talks, said in a joint statement that envoys would return home to consider the next steps, but did not provide any timetable.

“We tried really hard,” Malmstrom told reporters, adding that all negotiators were leaving “with clear determination to do this deal … This is important for the environment, for the climate, for our moral obligation to show that trade can deliver after the Paris and Marrakech agreements” to help fight global warming.

The Europe trade negotiator blamed China for scuppering the global environmental trade deal.

“China came in with their list, bringing in totally new elements of perspective, which was very late in the process,” Malmstrom said.

The change of US president also puts a big question mark over the future prospects for a deal.

European resistance to Chinese bicycle imports has also been a stumbling block, although Malmstrom said bicycles had become totemic for China and nobody else, and the agreement went far wider, adding that the EU had “quite cheap bicycles already”.

Another senior negotiator said the last-ditch Chinese effort affected priority items for many other nations. The official, who spoke on condition of anonymity to provide details of the talks, said China’s new list – which was lopsided in favour of its own priorities – came in at 11am on Sunday when others had already agreed upon many other points.

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“All delegations had some of their red lines moved in or moved out in a way that it was impossible to deal with in a couple of hours,” Malmstrom said, referring to China’s proposal.

China’s Ministry of Commerce said in a statement Beijing had made great efforts to show the flexibility needed to effectively solve the participants’ core concerns, but the meeting failed due to “differences on key issues”.

US ambassador to the WTO Michael Punke told reporters: “The United States worked hard to find a creative path to a successful EGA agreement. Unfortunately not all participants were ready to contribute to success.”

Malmstrom said she had no idea what U.S. President-elect Donald Trump thought about environmental matters, but she hoped the United States would be “on board”. Any deal would need the backing of countries responsible for about 90 per cent of the trade in the products, so a US absence would kill the talks.

But the participants, who include Canada, Japan, Israel, South Korea, Taiwan, Australia and New Zealand, have not yet decided which products should be part of the hoped-for Environmental Goods Agreement.

The discussion included products for clean and renewable energy, energy efficiency, controlling air pollution, managing waste, treating waste water, monitoring the quality of the environment, and combatting noise pollution, the WTO said.

Jake Colvin, vice-president for global trade issues at the National Foreign Trade Council, said the failure was a missed opportunity that was “disappointing to the American business community”.

“To paraphrase Dickens, China’s offences carry their own punishment,” he added. “China missed a golden opportunity to address its environmental challenges and to claim a share of leadership on global trade.”

Associated Press and Reuters

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