Practical Challenges in Negotiation for Environmental Provisions under RTAs

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Practical Challenges in Negotiation for
Environmental Provisions under RTAs

• MIYAKE, Yasujiro
• METI, Japanese Government
• Email miyake-yasujiro_at_meti.go.jp
• 19 June 2007
• Presentation for OECD workshop on Regional Trade
  Agreements and the Environment

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Evolving environmental provisions of Japanese RTAs
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Major environmental elements to discuss

• Strict control over transboundary movement of
  hazardous wastes
• Environmental goods services
• (1) Market access
• (2) Government procurement
• High-level environmental protection as
  improvement of investment conditions
• (1) Not-to-relax clause
• (2) Effective enforcement
• (3) Promotion of public awareness
• (4. Cooperation)
• (5. Working group)
• Challenges?
• (1) Intra-governmental
• (2) With negotiating partners

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Element 1 Strict Control over Transboundary
Movement of Hazardous Wastes

• Typical criticism based on misunderstandings
• RTA aims to promote exportation of hazardous
  wastes.
• Complaints from NPOs in e.g. the Philippines,
  Thailand, India

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Element 1 Strict Control over Transboundary
Movement of Hazardous Wastes
Need for clarification on our position Strict
control under the Basel Convention should address
the concern.

• Tariff reduction is not directly connected with
  this issue.
• - Tariff classification at the customs authority
  does not correspond with the Basel definition of
  wastes.
• - Some tariff classification may be more likely
  to include wastes (e.g. HS382520 Sewage sludge,
  HS382530 Clinical waste), but the WTO Agreement
  provides that tariffs must be eliminated on
  substantially all the trade (GATT Art.24(8)).
  Japanese government never intends to promote
  trade in hazardous wastes by way of tariff
  reduction.

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Element 1 Strict Control over Transboundary
Movement of Hazardous Wastes
Need for clarification on our position Strict
control under the Basel Convention should address
the concern.

• Japanese government implements strict control
  over hazardous wastes under the Basel Convention.
• - No exportation is allowed unless METI
  approves, MOE confirms, and the importing country
  gives a written consent.
• - The government holds explanatory sessions for
  industries on Basel Conventions and relevant
  regulations.
• - The government also holds workshops with Asian
  countries to exchange information in order to
  prevent unlawful trade in hazardous waste.

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Element 1 Strict Control over Transboundary
Movement of Hazardous Wastes
Challenges

• Better internal coordination may be necessary for
  greater accountability.
• - Relevant sections are split and spread
  customs authority, foreign embassies, MOFA, MOE,
  METI (sections for Basel Convention, RTA,
  chemical industry etc.)
• - An occasion at the Asia-Pacific Regional
  Meeting on the Strategic Approach to
  International Chemicals Management (SAICM) in May
  2007

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Element 1 Strict Control over Transboundary
Movement of Hazardous Wastes
Challenges

• RTA negotiating partners may need some time to
  get familiar with the issue.
• - Mandates to negotiate on environmental issues
  are crucial. Some developing countries shut the
  door to discuss environmental issues from the
  beginning.
• - Countries may refuse to negotiate on
  environmental issues from tactical viewpoint.
• Country A
• - Country As Ministry of Environment once
  proposed to negotiate on environment protection
  with a dedicated chapter.
• - Later, its Ministry of Trade took control
  of the whole negotiation process and refused to
  negotiate on environmental issues.
• - Raising environmental issues at the early stage
  for intensive discussion (e.g. at a Joint Study
  Group) is essential.

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Element 1 Strict Control over Transboundary
Movement of Hazardous Wastes
Challenges

• RTA negotiating partners may need some time to
  get familiar with the issue.
• - Having a dedicated chapter on environment
  itself is not the goal, but it may have a
  practical significance in securing slots for
  negotiation.
• - Normally negotiation groups are divided in
  accordance with chapters in the Agreement. (e.g.
  Trade in goods, Trade in services, Investment,
  Intellectual Property Rights)
• - In order to negotiate on environment, it is
  essential to include the issue at least in the
  Terms of Reference.

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Element 2 Environmental Goods Services

• RTA may be an appropriate vehicle for better
  market access to environmental goods services
• - Discussions on environmental goods services
  are going on at the Doha Development Agenda at
  the WTO, but stuck on definition of
  environmental goods.
• - RTA bilateral relationship may provide better
  chance to agree on the definition of
  environmental goods.
• - Better market access to environmental services
  may also be discussed. Some developing countries
  may be competitive in providing environmental
  consultations.
• - Government procurement giving preference to
  environmental goods services may be another
  item to consider.

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Element 2 Environmental Goods Services

• Challenges
• Governments are often reluctant to do something
  unprecedented.
• Possible counterargument
• - Why only environmental goods? What about
  electronics, chemicals, automotives? (Cf.
  Sectoral initiative at NAMA/DDA at WTO, ITA,
  Chemical Tariff Harmonisation Agreement at the
  UR)
• - Why only environmental services?
• - If negative-list approach is adopted,
  environmental services argument may only work as
  a principle or guideline in the course of
  negotiation.
• - Request on environmental services may be made
  in case of positive-list approach.
• Some negotiating partners find government
  procurement sensitive to discuss.

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Element 3 High-level Environmental Protection as
Improvement of Investment Conditions

• Not to Relax as an encouragement for trade
  investment clause is often added.
• High-level environmental protection will serve
  for improving investment conditions. Promoting
  public awareness may also count.
• - Effective enforcement may be important.
• - METI pays more attention to investment
  condition improvement in RTA partner countries.
• - Cf. NAFTA side agreement on environment
  appears to aim at prevention of race to the
  bottom in lowering environmental regulations so
  as to become more trade competitive.
• Challenges
• Some countries may need some time to see the
  benefit of investment condition improvement.
  Trade competition aspect may play more roles.

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Some implications

• Better exchange of views between the negotiating
  partners may bring about fruitful results
  especially in case of strict control over
  transboundary movement of hazardous wastes
  high-level environmental protection as
  improvement of investment conditions.
• Discussions at an early stage e.g. at a joint
  study group are important. This will also lead to
  mandates to negotiate.
• Greater accountability toward the public,
  including NGOs, will help in smooth
  negotiation/implementation. Better coordination
  within a government may be useful.