Environmental Goods Talks Lag as Agreement Window Narrows

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By Bryce Baschuk

Oct. 20 — Trade negotiators in Geneva said they're disappointed with the lack of results during this week's Environmental Goods Agreement negotiations and are anxious about their ability to conclude the multibillion-dollar tariff cutting agreement before the end of the year.

In separate discussions with Bloomberg BNA, EGA negotiators acknowledged their concern that much work remains to be done in the six weeks before their “endgame” EGA ministerial meeting scheduled for Dec. 3-4.

Several negotiators admonished China for its muted engagement and unwillingness to offer meaningful tariff concessions for various products that have commercial sensitivities for its domestic industries. The Chinese delegation did not respond to Bloomberg BNA's request for comment.

If EGA negotiators are unable to make significant headway in the coming weeks, it may jeopardize an accord that could boost global exports of environmental goods—like solar panels and water filters—by $119 billion per year.

Positive Developments

The good news, negotiators said, was that many participants took this week's negotiating round seriously, signaled their flexibility in certain areas, narrowed the scope of their sensitivities and offered ideas to bridge their differences.

Negotiators embraced a new modality for working and divided their work into small-group sectoral discussions of products for elimination, such as wood and appliances.

Those discussions led key countries and trading blocs—like the U.S. and the European Union—to offer new tariff concessions for products that China previously signaled as priority areas, participants told Bloomberg BNA.

Bicycles Still in Play

Core disagreements in the negotiations remain unresolved, such as Europe's opposition to the Chinese demand for tariff cuts on more than a dozen bicycle parts, negotiators said.

The EU—which is home to cycling companies Peugeot, and Bianchi—fears that the deal could open the door to a flood of cheap Chinese bicycles and bicycle parts.

China continued to insist on a so-called “snapback” mechanism that would allow participants to withdraw their EGA tariff concessions if at any point in the future the deal no longer covers a “critical mass” of environmental products.

The U.S. previously signaled its opposition to such a provision and has sought to narrow the language to reflect the critical mass provision in last year's information technology expansion agreement.

Weekend Oslo Confab

On Oct. 19, Deputy U.S. Trade Representative Michael Punke held a three-hour meeting with his Chinese and EU counterparts in Geneva to address the bicycle conflict and encourage China to provide greater political support for the deal.

High-ranking trade ministers from Washington, Brussels and China will meet this weekend in Oslo to discuss the state of the EGA negotiations and the next steps for the deal.

Though the Oslo EGA meeting—scheduled to last less than two hours—will not involve any direct negotiations among trade ministers, its ultimate goal is to generate a political push for a final deal in December.

To contact the reporter on this story: Bryce Baschuk in Geneva at correspondents@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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