BEIJING, CHINA – Representatives from green industries and business associations from around the world met yesterday at an international business seminar in Beijing to highlight their strong support of an ambitious Environmental Goods Agreement (EGA).
Economic benefits of an EGA
The seminar emphasized the significant role of Chinese industries in manufacturing and deploying environmentally-friendly technologies and the economic benefits Chinese industry would see from an agreement.
“Those countries that are highly competitive often have low levels of tariffs and protection,” said Professor Tu Xinquan, Dean of China Institute of WTO studies at the University of International Business and Economics (UIBE), a national public research university based in Beijing that specializes in economics, business management and law
Professor Wang Yuming, Vice Director of Department of Mechanical and Carrier Engineering, Chinese Academy of Engineering, added, “it is not necessary for China to have protection…since China has begun to reform and open up, no product or industry has been negatively affected. Chinese competitiveness has been improved by opening up. The EGA will be conducive to its reform and opening up.”
Participants discussed the critical environmental benefits of an EGA, which will encourage more efficient climate change mitigation and adaption through environmental technologies and products.
Ms. Wang Zhuo, Vice Secretary-General of the China Association of Lighting Industry (CALI), highlighted the role of LED lighting in reducing energy consumption and new innovative commercial design applications. She emphasized that her industry is “quite aggressive in encouraging all countries to include LED lighting products in environmental goods” and noted the need for a rapid conclusion to the negotiations.
Professor Wang of the Chinese Academy of Engineering noted the importance of mechanical seals, and the critical role they play in preventing leaks and emissions in process industries helping to protect the environment.
Max Chen, an executive of government affairs and policy for GE China, observed that, an “EGA will not only help China increase its export and help China reach its goal of ‘one belt, one road,’ but by working with the international community and leveraging the latest and most advanced technologies, it will help China achieve its climate goals it inscribed in the Paris Agreement.” He also highlighted the role of global technologies in areas such as gas power generation in helping countries like China to transition from more polluting technologies such as coal.
Yi Ming, Deputy Chief Engineer of Sinomatech and Deputy Secretary General of China Fiberglass and Composites Industry Development Alliance, suggested that composite materials can be an environmental good and play a role in reducing pollution and improving energy efficiency.
Professor Tu of UIBE added, “Beyond trade, we will have very great environmental benefits. That is quite critical. In China, environmental protection calls for lots of efforts. The weather today is not good. That will challenge the Chinese government to make great progress in the EGA negotiations.”
The role of global value chains
The seminar also focussed on the evolution of global value chains in the environmental industry and the many shared benefits for China and other countries’ consumers and manufacturers. A specific focus during the seminar was on Chinese industry players’ integration and participation in global environmental trade and value chains. It is clear that China in a very short time has become a major exporter of environmental products in various sectors – and a global market leader in both solar, wind and many efficiency technologies.
“China has a significant impact on global value chains,” observed William Lim, APAC Head of Strategy for Vestas. “With the ‘one belt, one road’ initiative, there is a strong push for China’s industries to become more globally competitive.” He added that, “eliminating tariffs on wind turbine components in the EGA will make wind power equipment more cost competitive…[and] will encourage technology transfer as the supply chain moves to the next stage of development.”
Presentations from experts and industry representatives referenced a variety of studies that revealed how trade liberalization plays a crucial role in encouraging exports of environmental products for Chinese and other global industry players. The seminar also focussed on the interest of the agreement for developing countries to facilitate more affordable access to energy, clean water and sanitation – as highlighted in a report from the government of Norway.1
Emphasis on concluding an EGA in 2016
Business participants applauded recommendations of the recent G.20 Summit in Hangzhou for a speedy ratification of the Paris climate agreement and G.20 ministers’ endorsement of a fast finalization of the EGA negotiations before the end of 2016 so trade can play its role in effective climate change mitigation.
The Beijing EGA business seminar took note of the current state of play in the negotiations after more than 17th technical EGA negotiation-rounds on the basis of a report from the EGA chairman, and participants strongly urged governments to make the last movement towards consensus and final political resolution at minister’s level before the end of 2016.
The EGA in its current scope is estimated to increase global exports of environmental goods by $119 billion per year. The EGA would thus significantly help increase the dissemination of environmental technologies through global value chains, increase energy access and make such technologies more affordable and cost-competitive.
Andrew Martin, an Australian diplomat and Chair of the EGA negotiations, summarized that, “The EGA is ready to be concluded. There’s no question about that.” He added, “There’s a very clear understanding of what everybody’s priorities are and sensitivities are,” and now it’s a matter of finding the right landing.
Partial list of participants
The negotiations for an Environmental Goods Agreement (EGA) were launched in July 2014. The countries behind this negotiation consist of 17 members of the WTO (including EU’s 28 member states under the EU’s negotiating umbrella). The objective of the negotiations is to eliminate tariffs on a broad range of environmental goods, building on a list of 54 environmental goods agreed by APEC in 2012. The purpose of an EGA is to enhance and facilitate environmental protection and climate change mitigation through easier access and extended trade of environmental technologies and products.
Seventeen EGA negotiation rounds have been held since July 2014. A broad range of technologies have been discussed and considered in the view of their environmental credibility within in the areas of i) air pollution control, ii) cleaner and renewable energy, iii) environmental monitoring analysis and assessment, iv) environmental remediation and clean-up, v) environmental preferable, vi) noise and vibration abatement, vii) resource efficiency, iix) solid and hazardous waste management and ix) wastewater management and water treatment.
The purpose of the Beijing EGA Business Seminar is to discuss the shared economic and environmental benefits for China and other globally-engaged industries in an ambitious result and conclusion of the EGA before the end of 2016, following the speedy ratification of the Paris Climate agreement, which will enter into force 4. November 2016. The seminar helped to shed light on the leading role of Chinese manufactures and suppliers are playing for environmental solutions and how trade liberalization can enhance exports of environmental products and technologies. During the seminar, a variety of participants emphasized their hope that EGA negotiators will adopt in Geneva the first international, biding environmental trade agreement in the WTO during the first week of December 2016.
1 An Evaluation of Environmental Goods (EGs) for the WTO EGA: EGs for Developing Countries by Haley Knudson, Dina Margrethe Aspen and John Eilif Hermansen, Trondheim, 16 January, 2015