The critical mass approach to achieve a deal on green goods and services: what is on the table? How much should we expect?

Abstract

AbstractIn July 2014 a group of 14 countries (the ‘Davos Group’) launched negotiations on liberalizing trade in ‘green goods’ (also known as environmental goods – EGs), focusing on the elimination of tariffs for a list of 54 products. With an average tariff of 1.8 per cent, this group has little to offer even if the list were extended to the 411 products on the ‘WTO list’. Taking into account tariff dispersion, their tariff structure on EGs would be equivalent to a uniform tariff of 3.4 per cent, about half the uniform tariff-equivalent for non EGs products. Enlarging the number of participants to low-income countries might be possible as, on average, their imports would not increase by more than 8 per cent. Because of the strong complementarities between trade in EGs and trade in environmental services, these should also be brought into the negotiation in spite of the likely difficulties in reaching agreement on their scope.